3 Tips for Wannabe Self-Employers

Philosophie BelieveSo you want to leave your comfy corporate job—give up your regular paycheck and run the risk of going months without income.

Can you handle that?

Mina G. is a DailyWorth reader with a 9-to-5 gig who thinks she can. She dreams of flying solo as a consultant for her company, which would also give her time for freelance work.

She asked for my advice, so here it is:

Figure out how much income you need. Then double it. When you’ve been working full-time for years, you’ll need a refresher on how much work it takes to generate $X amount of
 income. You need to cover your salary—plus taxes, health insurance, company expenses and retirement savings. Don’t shortchange yourself in the name of bootstrapping it.
Focus on cash flow. It’s harder than you think. You may not get paid up-front or even on time. You might think you’re making $4,000 one month, but if one client doesn’t cut a check when you’re expecting it, you could be stuck. Whatever amount you need to generate, you’ll probably need more to provide a buffer. Mina’s consulting plan is smart—so is finding a part-time job for steady income.
Prepare to sell—and sell some more. Do you have the connections to generate enough work? You need a lot of contacts—and you have to research potential clients, cold-call or ask for introductions, and follow up on leads. It’s 100% on you to keep the momentum going, as Deb DiSandro learned last fall in the DailyWorth Money Fix series.

Running your own game is great, but half your job description is deal generation and cash management. It takes a strong stomach and a lot of energy.

Be enterprising. Share your advice about switching to self-employment.

photo source: philoSophie’s by Joanna Alberti