How do you maintain income when transitioning to self-employment?

If you’ve been working in an organisation all of your life transitioning to self-employment can be a challenging and perhaps stressful time. One of the biggest fears is about whether you’ll make enough money to live on.

Here are three tips to make the transition to self-employment easier.

Get your mindset right for self-employment

This is some advice that I really could have done with when I became self-employed in 2001. I’d been working in organisations (public and private sector) all of my life and was used to getting a paycheque at the end of every month.

When you’re self-employed, particularly at the start, you’re likely to have months that are fairly low income which are balanced by those that are very financially rewarding. Getting in the habit of looking at your income over a year, rather than each month, helps ease the pressure. As long as you’re doing all the other essential activities to run a successful business, you’ll know that over the course of that year you’ll earn enough to support your chosen lifestyle.

Plan ahead when going self-employed

Planning ahead is so important. There’s a whole lot of work to do to check that there is a market for the product or service you intend to offer. You need to identify who your customers are and how you are going to make them aware of your service.

Another key part of your plan should be to have check points where you can objectively review your progress against your goals and targets. This helps you identify what is working (so you can do more of it), what is not working (so you can stop doing it), and what might work with some tweaks (so you can take action on it).

Consider your route into self-employment.

This links somewhat with getting your mindset right and planning ahead.

Consider, do you have to have one big launch date, diving in headfirst?

That may be the right way for you depending on your circumstances, but there are other options. Perhaps you could start in a small way and build whilst you still work in a full-time or part-time role, changing the balance until you are full-time self-employed.

Alternatively, you may need to seek investment so that you can take a wage as you grow your business, or you could make plans to save money ahead of starting which you can then use to support yourself in the initial stages.

And one further thing…

As well as these three, there’s one further snippet I want to share with you that I wish I’d done earlier (ideally at the beginning) of my self-employment journey.

Check out the 90 second video and the top of this blog to find out more.