Millions of people dream about becoming self-employed and quitting their full-time jobs. However, their entrepreneurial dreams can get derailed if they do not plan their transition to self-employment and prepare well.
Quitting your 9-to-5 job can be scary. It’s hard to give up a steady paycheck and benefits… even for people who absolutely hate their jobs.
What’s the solution?
It’s extremely important to create a personal escape plan from the rat race. You can control the timing of your switch to self-employment and prepare a lower-risk transition.
You need to put a self-employment transition plan together while you still have resources available from your job.
Do not wait to be terminated, laid off or have your hours reduced before putting your transition plan in place. If you’re unprepared, it’s going to be a lot harder to start your self-employment journey if you have no savings, no source of income and no resources.
Regardless of your situation, it’s going to take a lot of courage to begin your entrepreneurial journey.
So, you need to show up for yourself. You need to be willing to commit to your self-employment success. Re-commit regularly to showing up for yourself and your dream of creating work that you love… especially during challenging times in your journey.
The sacrifices you’re going to make are all investments in your future and in your family’s future.
Transitioning from your full-time job to self-employment is not going to be easy, but the payoff can be huge. It’s worth giving it everything you’ve got to start making a living doing what you love.
10 Tips for Transitioning From a 9-to-5 Full-Time Job to Self-Employment
1. Change your mindset about work.
Ditch the 40-40-40 plan. It’s the idea that you should work 40 hours a week for 40 years of your life then you can retire on 40% of your pay and finally start enjoying your life. Instead, you can transition from your full-time job and start making a living doing work that you love. You can start enjoying your life sooner.
2. Figure out your self-employment motivation.
It’s important to understand the reason(s) why you want to become self-employed. There will be many challenges that you have to face in your entrepreneurial journey — and your motivation will be the driving force that can help you persist, persevere and succeed.
- Do you want to support your family as a work-at-home parent?
- Do you want to boost your income to have an earlier and more secure retirement?
- Do you want to be able to afford your kids’ college education and provide a better future for them?
- Do you want to be able to afford a better home and move your family to a safer neighborhood?
- Do you need to work online to have more flexibility to take care of your aging parents or sick loved ones?
- Do you want to make more money to pay off your debt and decrease your financial stress?
3. Decrease the psychological distance from your current job to making your self-employment dream a reality.
Think of your current job as one of multiple income streams you plan on creating instead of your only source of income. When you start thinking of your job as part of a larger strategic plan you’re implementing to create work you love, your perception of your situation can change dramatically.
You have created a way to mentally escape your day job before you actually quit. It can strengthen your resolve to persevere and achieve your goals.
4. Cover your health insurance needs.
You can get medical insurance coverage through COBRA (which allows you to retain your company insurance for a period of time after you leave). You can purchase your own health insurance or get it through your spouse or domestic partner.
If you can’t afford to get your own health insurance as a new entrepreneur, you can work part-time to continue your health insurance and other benefits from your job.
Once you’re successfully self-employed full-time, you can get your own health insurance as well as your own retirement plans and other benefits.
5. Use your employee perks and benefits to support your self-employment.
Do you have paid time off or vacation time that you can use to have more time for your self-employment? Some companies will allow you to convert your vacation or paid time off into cash, if you want more money instead of time.
6. Use your free time wisely.
You need to put in the time to develop your self-employment projects. This means working in the evenings, nights, on weekends and whatever free moments you can find.
You need to cut back on excessive television watching. You need to cut back on excessive tweeting and posting on social media.
Show up for yourself and invest your time on achieving your goals.
7. You need to create more time for your self-employment.
If you can afford to do it, reduce your work hours from your day job. You can switch to a part-time position (this allows you to keep your benefits). If necessary, you can switch to another job that offers more flexibility.
8. Live below your means.
Prepare yourself for financial challenges as an entrepreneur while you’re still working full-time in your job. For example:
- You can eliminate your debt.
- You can get your credit in order.
- You can downgrade and move into a smaller home or cheaper apartment.
- You can move to another town with lower cost of living.
- You need to cut out money wasters.
9. You can overcome fear of failure by testing all your entrepreneurial ideas and minimizing your risk.
Instead of assuming or hoping that all your ideas will work, test drive them. Test them if they’re going to work or not. Test your expectations:
- Did you enjoy doing the work or not?
- Did you earn enough profit or income?
- Was the work a good fit for your lifestyle?
You can overcome fear of failure by becoming a testing expert.
By testing all of your ideas, you can quickly find those that do not work and ditch them. By doing quick tests, you can minimize your risks. You can avoid wasting a lot of your time, money and resources on any idea that ends up not working for you.
Most ideas don’t work for a number of different reasons. When something doesn’t work for you, it doesn’t really mean that you failed.
When some of your entrepreneurial ideas fail, it doesn’t mean that your self-employment dream has failed. You will have many other ideas to test.
Everything that you do as an entrepreneur is just a test. Some ideas will work for you, but many will not. It’s not about you. So, don’t take it personally. Do not let it discourage you. Do not let it stop you from continuing to pursue your dream.
10. Keep building your financial reserve until you’re ready to quit your job.
It’s hard to know when you can make the jump and leave the safety net of your 9-to-5 job.
- If you leave too early, you risk running out of money. Even if you have a good chance of becoming successful, you can end up going broke instead of going big.
- If you take too long to leave, you risk not giving your self-employment the necessary attention required to catapult it to success.
While you’re still working in your current job, you can keep building your financial reserve to cover your expenses for as long as it takes for you to generate enough income.
Keep testing your entrepreneurial ideas until you are satisfied with the income streams that you’re earning.
Even if you’re making a lot of money, do not rely on one income source. Instead, diversify your income streams. You do not want to end up just one income source away from a financial disaster.
Having multiple income streams can offer you some financial security. When you are consistently generating sustainable income streams to support yourself and your family, you can decide that it’s time to quit your 9-to-5 job.
You can finally take the leap and focus on your self-employment full-time.