After working for someone else, self-employment can be an exhilarating change. But it’s also fraught with potential pitfalls, including the possibility of running out of money before your new venture even gets off the ground.
"The more planning you can do beforehand, the more you’ll increase your chances of growth and success," says Raj Tumber, a Las Vegas–based small-business advisor with SCORE, a nonprofit organization that provides guidance to entrepreneurs.
Tumber, who has plenty of experience watching business owners meet the challenges of getting a venture started, offers four steps all entrepreneurs should consider to help prepare financially for self-employment.
4 steps all entrepreneurs should consider to help financially prepare for self-employment
- Create a thorough business plan. Perhaps you’ve figured out where you add value in your core profession for a specific clientele, and you’re ready to begin offering that service. Before you start seeing clients, write out a detailed business plan. That way you can get a firm handle on startup expenses such as legal fees and a marketing budget, as well as ongoing costs such as office space and supplies.