Be Your Own Boss: The Guide to Self-Employed Work
Are you feeling stifled in your office cubicle? Sick of receiving orders from your boss and having no room to think for yourself? Feeling over the hour-long commute to and from work, stuck in grid lock traffic?
The idea of being your own boss is likely to sound highly appealing to you. Self-employed work allows much more room for flexibility and creative than the ordinary desk job, and allows you to capitalise on what you’re best at.
Maybe your true calling is to be a freelance writer, personal trainer or tradesman: self-employed work is your gateway to pursue what you love on a full-time basis, on your own terms.
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However, being self-employed isn’t as simple as quitting from your day job and starting to conduct business from your laptop at home.
There are some practical steps to follow to ensure that you get the most out of your own talents, with minimal stress and worry. If you’re ready to control your own schedule and reap all the benefits of your hard work, make sure to read over the following tips to begin with a good foundation:
Test the Waters:
It’s smartest to test out your self-employment idea on a part-time basis first, before you quit your full-time job in dramatic fashion. Before work, after work and on the weekends, begin working on your side job that you are intending to turn into your new full-time job.
Keep track of how much you’re able to earn, and estimate whether this will be enough to live on if you were to take it on full-time. If the numbers look good, go for it.
Have an Emergency Fund:
Self-employment will never guarantee regular income. As the income will likely take months or even years to stabilise, ensure that you have several months of living expenses set aside in case your self-employment takes off slower than you expected.
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At a minimum, you should have enough to last you 3 months, but if you have a family, consider building up enough of an emergency fund to live off for 6-12 months. In fact, you should always have a comfortable cushion of emergency funds, as you never know when you might have a bad month with your business.
Work Perks:
Consider whether you’ll be happy without your current work perks. Sick leave, maternity or paternity leave, retirement contributions and health insurance are all things you may currently enjoy at your full-time job.
Will you be able to provide alternatives for yourself in regard to superannuation and health insurance? Will you be okay with no guaranteed annual leave or sick leave?
Start Up Finances:
Now that you have an idea of how much you’ll be able to make if you become self-employed, you should also consider how much it can cost to establish your business.
Do you need a physical building to base your business out of, or just need to update your home office? If you’re expecting any big costs with the establishment of your own business, such as buying property or equipment, consider a low doc commercial loan.
Keep it Legal:
To be self-employed, you need an ABN (unless you want to be taxed huge amounts). The self-employed also need to pay tax, but registering for an ABN ensures you pay the minimum tax possible, so take care of that and make sure you’re doing everything by the book.
Remember your Super:
Without an employer regularly contributing to your super, it may be easy to overlook this important preparation for the future. Make sure to stay on top of your super, making regular personal contributions to ensure a comfortable retirement. Read more about super for the self-employed on the ATO’s website.
Don’t Underestimate the Work
When you’re working for yourself, you’re taking on more than just the job title. You’re in charge of your own marketing, finances and more.
Enlist the help of professionals like a financial advisor or a marketing coordinator, or make sure you’re confident in these different departments to handle it on your own.
Make the Leap
Once you’ve thoroughly considered all of the above and conducted extra research, begin transitioning from your full-time day job. Some people may benefit from taking the plunge and diving headfirst into self-employment.
For most, however, it is smart to gradually transition away from your full-time job and into self-employment. This can be done by asking your employer if you can work remotely or on a part-time basis. This allows you to enjoy the best of both worlds for a while, and then quit the full-time job when you are completely ready. For more advice on managing yourself, read this advice from Money Smart.
Category: Business
