6 steps to grow a sustainable independent career
Have you caught the entrepreneurial bug? Driven in part by an employment culture upended by the pandemic, an entrepreneurial fever is sweeping the United States. In 2021, 5.4 million new business applications were filed — the highest ever recorded. Only one-third were for start-ups expected to hire employees. That means roughly 3.5 million were for one-person ventures, signaling a spectacular rise in the ranks of the independent professional.1
Plan before you leap into self-employment
If you’re thinking about striking out on your own, the rewards can be significant, including higher income, lifestyle flexibility and greater control over your future. But independence is not without its risks, so here are six steps to help you build an optimal foundation for the long-term success of your new venture:
1. Define your brand
How will your new business stand out from the competition? If all professionals in your category offer a fairly standard set of services and/or products, why should buyers come to you instead of someone else? That unique aspect of doing business with you is your brand, and identifying it is key to your sales and marketing efforts. It’s not what you do; it’s how you do it.
2. Calculate cash flow
Identify your projected expenses — what you will need to spend each month on basics like rent and utilities, equipment and supplies, telecommunications, taxes and insurance. Determine your pricing structure and set a monthly income goal that will generate enough positive cash flow to cover your business expenses, pay yourself and make some profit you can save or reinvest in the business.
3. Create a simple business plan
Write everything down: your unique brand promise, your ideal customer, your pricing structure, your monthly cash flow projections and your goals for the business. Add in milestones for the coming 12–18 months to keep yourself on track. It’s a good idea to share your roadmap with a financial professional for feedback that will help you avoid pitfalls.
4. Have a transition plan
You don’t have to go from employee to business owner overnight. Ease into the change, cultivating potential clients and taking side gigs (if legal and ethical) before leaving your employer. That will help you build a client base and bring in extra money to finance your venture. Some experts recommend creating a rainy-day fund with enough cash to cover 12 months of living expenses and three months of business expenses before leaping.
5.Find your village
Self-employment doesn’t mean you have to go it alone. Reach out to your existing contacts with news of your venture. Cultivate likely candidates as collaborators or partners to offload aspects of your services and explore new avenues for growth. Network as much as possible to help drive referrals and expand your business reach. Look for professional and governmental resources to help your small business thrive.
6. Protect yourself and your loved ones
The risk side of entrepreneurship is real. With no full-time job or guaranteed income to count on, it’s wise to put some protections in place. In addition to the rainy-day fund, consider adding disability insurance for income protection. In the event of a sudden health emergency, you’ll be more secure and confident knowing the income can help your business, and your personal life, stay afloat.
There are many paths to an independent career. One to consider if you’re entrepreneurial-minded and love helping others: financial professional. Embedded in the everyday challenges and long-term goals of their clients, financial professionals serve as coaches, problem solvers and confidence builders — while enjoying the flexibility and rewards of running their own business.
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2022-146430 Exp. 11/2024