It’s something that more and more people seem to be doing every year, but taking that giant leap towards the category of being self-employed is far easier said than done.

Some would suggest that there is never a “right time”; there will always be something holding you back. Today, we’ll take a look at some of the decisions and circumstances that should go through your head as you mull over this topic.

How much money do you need to save up?

One of the first things you need to consider before making the jump to self-employment is how much money you’ll need to have saved up. 

There are a few different things you need to account for: your living expenses, your business expenses, and your cushion for the inevitable lean months.

You’ll also want to make sure you have a good sense of how long it will take you to break even on your business expenses. This can vary greatly depending on your business, but it’s a good estimate to start with.

Of course, some of you will be more risk-averse than others. It’s, for this reason, there is no right answer, it all depends on your individual circumstances.

What does the industry currently look like?

The industry you’re in is also a big consideration when making the jump to self-employment. 

Are things in a healthy state, or are they on the decline? 

This is important to consider because it will help you determine how much risk you’re taking on by making the jump. 

This point also covers your knowledge of the industry. Understanding trends is crucial, but are you aware of the latest accreditations you might need? Or the type of indemnity insurance that is required? Again, these are points that can shape your decision.

Where are you starting from?

Your starting point is also a big consideration when making the jump.

Are you starting from scratch, or do you have some clients or a customer base you can lean on?

This is an important question to ask because it will help you determine how much time and money you’ll need to get your business up and running. 

If you’re starting from scratch, you’ll need to allocate more time and money to get your business off the ground. On the other hand, if you have a customer base, you’ll need to focus on ramping up your production to meet their needs.

Unfortunately, it again links to the first point we spoke about.

Have you considered the immediate sacrifices?

Making the jump to self-employment means making immediate sacrifices. 

You’ll need to be prepared to work long hours, forgo some luxuries, and maybe even live a more frugal lifestyle. 

This isn’t to say that you can’t enjoy some of the benefits of being self-employed, but you’ll need to be mindful of the fact that your income is directly tied to your own efforts. Furthermore, these efforts will be testing during the initial months as you bid to get going.

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