People get into self-employment for various reasons. On the one hand the allure of having the freedom to set your own goals and schedules is quite attractive while on the other hand the inability to find a job or the feeling of being underemployed forces others to get into private practice. Some people decide to start a small business while others prefer doing freelance professional work. Since you are venturing into uncharted waters, there are mistakes to avoid when going into self-employment.
Quitting your job before figuring out what you want to do
Any person who has been in self-employment will tell you how fulfilling it is to run your own schedule and set your own goals. They will also advise you not to quit your job first before you figure out what you want to do and how to go about it. Otherwise you will end up swelling the percentage in the unemployed pie. However much annoying your job feels, do not quit just yet, but start planning to do it. Put your finances in order, start researching and experimenting with side gigs with an intention of making a regular income. Create contacts if you are going freelance, and learn the game first. It still remains true that 30 percent of businesses fail in the first two years, 50 percent in the first five and 66 percent in the first 10 years.
Wading into unfamiliar territories
It is unwise to suddenly decide you want to change your ‘career’ when getting into self-employment. If you do not understand anything about the business you are going into, not even the gods will help. Do not shift from the manufacturing industry into farming without prerequisite knowledge of the latter, you are not a magician.
Learning new skills in your first year of self-employment
You are a very good writer or editor, but then in your first year you decide that you want to learn coding, and illustrating. Three things are bound to happen here:
- You will waste a lot of time trying to learn the new skills
- You will reduce your chances of promoting your brand and earning
- You will be broke and frustrated at the end
If there is a skill you need to learn, it should be how to brand yourself and market your business or freelance service. In-depth studying of a new skill is best done before launching into self-employment.
Relying on your savings as capital
Do not mix your savings with business capital unless you have saved specifically for it. The money might look much, but remember you have expenses especially if you have a family. Then you have a business that has just been incubated and the chances of successful hatching are still unverified. That is why it is prudent to start your side gig while still on your annoying job to cushion against any shocks that might come along the way.
Giving yourself too much freedom in the beginning
It is no secret that while self-employment promises much freedom, the opposite is true. Running your own agency or freelancing means you have to put in more time for the business to be stable. If you cannot put in more time in the first year, then do not be surprised if your business collapses in the next one. There are times when business will be low, other times when it will overwhelm you. Learn to plan, but keep the vacations out of your plans. Do not be surprised when you have to work 15-hour-days. You are building what you ever wanted, right?