How to Transition into Self Employment

Once you have made the big decision to become self-employed and be your own boss using your own business idea there are financial and time considerations to be analyzed. Most people can't simply quit their current jobs and start right off making enough money on their own to live on. The transition period prior to leaving your current position and moving into self employment will require extra hard work and some thoughtful planning.Here are some tips that may help you.

Things You'll Need

• A business plan that you can start up part time and can grow into full time.

Instructions

1. Consider what your fixed and flexible current living expenses are and determine how much extra money you already have, will be paid on a regular basis from your job or may borrow to get your business going, and don't forget about any new loan payments you may incur. Health insurance that costs should also be considered. Determine how much time you will be able to put forth on a regular basis to start up your business venture, allowing yourself rest and leisure time. However, be prepared to work harder than you ever have.

2. Calculate how much income you believe you can generate on a regular basis working part time on your new business in relation to the time and capital you will put forth, and be realistic, considering possible slow periods or slumps where your projected income may be reduced.

3. It's a good idea to let friends and family to know what you are going to be doing and that during this transition period you may be less available since you will be working more than usual and to forgive you in advance for your lack of precense.

4. Based on how much money you will need each month to live on which will be obtained by your new business income alone you must set up a deadline when you will be able to quit your job and rely solely on your business income. Mark that special day on your calendar and look forward to it. Running a successful business is based heavily on projections and goals you set.

5. If your business requires any special licensing, get that in order and you may even decide to seek out a CPA to help you get started, especially if you plan to incorporate. .

6. Now get started working on your new business, using the time and capital you have designated towards it and stick with your time schedule. A daily planner will be a helpful tool.

7. It is a good idea to open up a personal business checking account so that you will be able to keep your business funds separate from your personal account. If you will be taking a certain amount each pay period from your regular job this new account is a good place to put it.

8. Work very hard, have a burning desire to succeed no matter what and expect some setbacks. During your transition period, you should be earning more money by getting paid from your regular job and earning income earned from your new business. Don't be tempted to spend more than you normally do. You are going into business to secure your future and you should not start spending more than you need to if you want to be successful in the long run.

Tips & Warnings

• Consider a business that will allow you to work at it part time at first to get it going

• Be realistic about how much time you can spend working your new business during your transition

• Best not to let your employer find out what you are doing. Most managers would not appreciate the competition.

• Don't neglect keeping good records for tax time. You will need to set up a special tax savings account since you will be paying taxes either quarterly or at the end of the year..