How To Go From Employee To Self-Employed In 6 Simple Steps
Do you dream of leaving your 9-5 or part-time jobs? Discover how to go from employee to self-employed in six simple steps!
Are you tired of office politics and the employee handbook?
Would you love to set your own hours, choose your clients, and build a business that excites you?
Transitioning from employee to self-employed is one of the most rewarding and challenging things you can do.
I met someone at a networking who was an independent business owner for Amway. He gave me Robert Kiyosaki's book Rich Dad, Poor Dad to read. I decided to start my own business in college. Since then, it has been an exciting and worthwhile journey as a solopreneur.
Problem: Why The Employee Life Is A Trap
1. Limited Control Over Your Time And Income
Your industry caps your earning potential as an employee. Your employer controls your income.
No matter how hard you work, your paycheck stays the same. You have little or no say over your schedule, workload, or work environment.
You have to obey your boss and employer. Your employer can fire you at any time.
2. Your Success Depends on Someone Else’s Decisions
Promotions, raises, and job security often depend on office politics, company budgets, or a manager’s opinion of you.
Your performance and skills only matter so much that you do the work that your employer hires you to do.
You may not get along with people in the office. You may not come across the right way to your colleagues, managers, and employer. In that case, you may never receive a promotion.
I know someone who works for an engineering company. He's a great engineer and has been with the company for a long time. The problem is that he lacks verbal and nonverbal communication skills. His colleagues dislike him, so HR has received complaints about him. He was worried that he would lose his job. Not because he wasn't good at his job, but because of office politics.
3. You Fear Taking the Leap
You stay stuck because of:
Financial fear – "What if I can’t pay my bills?"
Skill doubt – "Am I really good enough to charge for this?"
Uncertainty – "How do I even find clients?"
Key Point: The security of a paycheck is an illusion. You can have financial stability by working for yourself.
Solution: A Detailed, Step-by-Step Plan to Self-Employment
Step 1: Identify a Profitable Skill
Focus on a profitable skill that you have. Start by providing a service to your audience and customers. A profitable skill is more important than your passion or obsession. Although, the two can overlap.
Rule #1: Your business must solve a problem people will pay for.
How To Discover A Money-Making Skill
Look at your current job. What are the skills and tasks that you excel at? Work on developing that skill and the associated skills that go with it.
Ask your friends, family, and colleagues, "What’s something you’d pay me to do or you? "What do you think I'm best at?" and "What is the skill that I am best at?"
Check the freelance marketplaces on Fiverr to see what’s in demand that you can make money doing online.
Pro Tip: Skills like accounting and bookkeeping, consulting, copywriting, digital marketing, and sales are always in demand.
Step 2: Build Your Financial Safety Net
Make it a priority to save six months to a year emergency fund to cover your living expenses before you leave your job. Make sure that you're generating income from your business before quitting your job.
How You Can Save Faster
Cut out unnecessary costs. Stop going out to eat, order delivery, eliminate unnecessary subscriptions, and cut out impulse purchases.
Sell any unused items. Sell your electronics, clothes, furniture, and other unwanted items. Sell them at a garage sale, on Facebook Marketplace, eBay, or Poshmark.
Take on a side hustle to boost your savings and get your business going.
Key Point: A financial cushion reduces financial stress and gives you time to grow your business.
Step 3: Validate Your Business Idea
Make sure that your business idea is viable. Check to see if successful businesses are doing what you want to do. Competition is good. It means there is demand.
Identify your target audience and customers. You can have multiple customer avatars. A customer avatar is a picture of the different people who will buy from you. A customer avatar typically includes their age, income, demographics, location, and interests.
Test Market Demand For The Business
Offer your service to five to ten paying clients. Start by offering at a discounted rate. A standard discount is 20% to 30%.
Create a simple portfolio to show your work to clients. Create sample work to show your skills and work.
Use tools like Canva or Carrd. Start with the free option, then upgrade to the premium version when you need the additional tools.
Track your results. Do you receive comments, feedback, and interest from people? Are they willing to pay? Do you have return customers, clients, or users?
Key Point: If you can’t find your first clients, refine your offer and concept to make it more attractive before quitting. It can take time for you to be seen, especially on larger platforms.
Step 4: Set Up Your Business Basics
You want to make sure that your business is set up correctly before launching.
Choose The Right Business Structure
There are five primary business structures. They are:
Solo-proprietorship
Limited Liability Corporation (LLC)
Partnership
S-Corporation
Corporation
An LLC is the most common business structure. An LLC can be combined with a sole proprietorship, partnership, s-corporation, or corporation.
You'll want to consult with a legal and tax professional. They can help you choose the best option for your business.
Open a Business Bank Account
You want your business and personal money to be separate. You separate your business bank account for business, tax, and legal purposes. Once you start earning money from your business, you can pay yourself for it. That is known as pass-through income.
Set Your Pricing
Research your competitors. See what they charge. Decide if you want to establish yourself as a budget, mid-range, or premium brand. You can charge more as a premium option compared to a budget option. Be sure not to undercharge.
You'll need to cover your business expenses. That includes any software or tools you use, as well as the time and other costs associated with doing business, such as taxes.
Pro Tip: Use tools like Wave (free accounting software) or HoneyBook (client management software) to stay organized.
Step 5: Get Your First Paying Clients
No clients equal no business. It's that simple.
Here are three ways to find your first clients.
Method 1: Leverage Your Network
Tell friends, family, and former coworkers what you’re doing. This is also a great way to see who supports you in doing something different. You may be able to get a few referrals.
Post on your social media, especially Linkedin, which focuses more on professionals. Post something along the lines of, "I'm now offering [service]! I have [x years of experience] providing this [service] and I decided to go into business for myself! DM me if you need help!"
Method 2: Use Free And Low-Cost Marketing Strategies
There are expensive and low-cost marketing strategies. You want to focus on the free and low-cost options when you're just starting out, and even once you've grown, to save on marketing costs.
Cold Calling And Emailing
Cold call and email businesses that would need your services. Sign up for Bark to connect with people and companies that need your professional services.
Create a business email with Google Workspace. End your email with your business name instead of a generic email address. It looks more professional. Once you upgrade to a professional email tool to build an email list, you'll want your email address to end in your domain name.
Social Media
Create one to two social media accounts that you're the most familiar with. Don't do any more than two when it's only you. It becomes too challenging to create content, monitor, and respond to comments and messages by yourself.
Post daily tips and quotes in your niche to build credibility. Share personal stories from your life and talk about your successes and failures to connect with your audience.
Local Networking
Attend Meetups. Look for Chamber of Commerce events. Look for professional networking events in your area.
Method 3: Start On Freelance Platforms
Start out on freelancing sites like Upwork or Fiverr. These freelancing platforms can help you find initial clients. You can start to earn money for your business.
As you grow and make more connections in your area and use platforms like Bark, you can refer people to your website. You have more control over your own website.
You control the terms and conditions of your contracts with your clients with your own website. You remove the middleman of Upwork and Fiverr, so you can earn more from each service you provide.
Step 6: Scale Beyond Freelancing To Build A Real Business
Freelancing and consulting mean that you're trading time for money. You're still self-employed. The goal is to earn money while you're not working.
A business earns when you’re not working. You achieve this by hiring freelancers and employees to work on your behalf. You provide products and services that people can buy from you 24/7/365.
3 Ways To Scale Your Business
Outsource Tasks ASAP
Hire a virtual assistant to respond to email and do basic tasks for you. Hire freelancers to do the work you need. Include the costs of the labor and other input costs in your final price.
Productize Your Services
Offer fixed-price packages instead of charging by the hour. Customers can then purchase a package of services they need at one time. Hire someone to do the work for you, allowing you to focus on growing your business through effective marketing.
Create Digital And Physical Products
Repurpose your products, services, digital marketing posts, and articles to sell templates, e-books, and digital courses. Start small by using an e-commerce site like Gumroad. If you have a website, you can use Shopify. Once you have a large enough audience, sell merch with your brand's logo and slogan.
Key Point: Self-employment starts with freelancing and consulting. You grow a business by hiring people to work for you and selling products to reclaim your time.
Why Does This Matter?
Self-employment is a better option than working for an employer. You can start by working for yourself and then build and scale your business.
1. Unlimited Earning Potential
You have no earning cap when you're self-employed. Your income comes from your effort and skills.
2. True Flexibility
If you work online, you can work from anywhere. You can set your own hours. You can take time off when you want.
3. Work That Excites You
You accept the work and projects you want to work on. You decide who you work with.
Choose projects you love and clients you enjoy working with.
4. No More Office Politics
Your success depends on you. You no longer have to worry about your boss’s mood or company layoffs.
Key Point: Self-employment requires self-responsibility to grow and scale a business.
Summary
There is never a perfect time to start. Start now. Start small. Take action to transition from employee to self-employed.
Your first three actions:
1️⃣ Pick one skill that you can monetize as a service.
2️⃣ Save $1,000 as your starter financial safety net.
3️⃣ Land your first paying client to prove to yourself that you can do it.
Every successful entrepreneur started where you are now.
Disclaimer: This content is for educational, entertainment, and informational purposes only. This is not business, financial, investment, or any advice. I write online about topics that interest me. I make mistakes just like everyone else. Always consult a professional before making health, life, finances, investments, taxes, or legal matters.