4 Steps To Take Before You Decide To Be Your Own Boss
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This article is by staff writer Holly Johnson.  Holly is a wife, mother of two, and frugal lifestyle enthusiast. She is the co-founder of Club Thrifty and a staff writer at Get Rich Slowly and Frugal Travel Guy. Check out more of her super awesome skills at clubthrifty.com If you’re interested in writing for Vosa contact us here.

If you ask most people about their career goals, they’ll tell you that they dream of working for themselves. 

They want to set their own hours, decide which direction to take, and forge their own path, without having to answer to a boss or management.  And, for many self-motivated people, striking out on their own can truly be a reasonable option. 

After all, all you really need is an idea, a business, or a freelance opportunity to make it happen.  But, before you take the plunge, it’s important to consider what you’re getting into and settle a few issues ahead of time. 

The following list can help:

Start a Self-Employment Emergency Fund

Before you walk away from your stable job and reliable paycheck, it’s important to have a reasonable emergency fund in case things don’t go as planned.  Start by figuring out your share of the monthly expenses and how much money it would take to support yourself for several months while you get your business or freelance career off the ground.  Then start saving and don’t stop until you hit your magic number.  Quitting your job is stressful enough without having to worry about paying the bills and putting food on the table.  When it comes to taking the plunge into self-employment, you can never be too prepared.

Create a Bare Bones Budget

Income might be slim during the first few months of your new career, so it’s important to see if there are any expenses that can be reduced or eliminated.  For example, see if you can sign up for a cheaper cable television plan ahead of time, or if you can cancel it altogether.  Same thing with your cell phone plan and other negotiable bills.  Consider shopping around for car insurance and homeowner’s insurance as well, just in case you’re able to find a better deal.  When you’re self-employed and just starting out, all of those small savings can add up.

Plan for Retirement

Walking away from your 9-5 typically means giving up your employer-sponsored retirement plan and the company match they offer, if any.  That means that you’re on your own when it comes to figuring out how much you need to save, and what kind of investments to pursue.  The good news is that there are several retirement plans set up for self-employed individuals, with the most popular plans being the Solo 401K and SEP IRA.  Both plans allow self-employed individuals to sock away a large percentage of their earnings for retirement and can be set up online through low-cost online investment brokers like Scottrade or e-Trade.

Set a Schedule and Stick with It

One of the hardest parts about self-employment is staying motivated, and it can be extremely difficult to do so when you’re no longer accountable to anyone else.  This is especially true when it’s nice outdoors, or when you have other issues in your life that are hanging over your head.  Regardless, it’s important to stay on task if you truly want to succeed.  Start by figuring out which hours work best for your family members and other responsibilities.  For example, it might be easiest to work 9-5 if you have kids in school.  Or, if you’re a night owl with few responsibilities, it might work best to work second shift.

Starting your own business or embarking on a freelance career can be scary, but the risks become much more manageable if you do some planning ahead of time.  So create a list of things you want to accomplish before you strike out on your own, and find ways to make them happen.  Save up several months of expenses and figure out ways to cut your budget down to the bare essentials if you need to.  Chances are, you’ll be glad you did.

What would it take for you to feel comfortable quitting your job?  Have you ever considered self-employment?

See The List of 15 Things I’ve Sold To Make Money. #12 Had A 600% Return on Investment.
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