Making the transition to self-employment is typically full of excitement and anticipation. You’re starting on a new path to navigating a career, finances and future on your own terms. It can also be a daunting task – not knowing the ins and outs of what your day to day will look like or even how to manage your finances. If you are considering taking this next step, or even in the process of it, consider the following five essential tips for maximizing your self-employment opportunity and success.
1. Optimize Your Routine
It’s often suggested that freelance or self-employed individuals maintain a consistent 9 AM – 5 PM work schedule in order to foster long-term productivity and keep up with the rest of the world. While consistency is key, matching your routine to personal preferences will help improve both the quality and the quantity of your work.
For example, if mornings are difficult for you to focus but late nights produce creative ideas, consider shifting your hours to a consistent 4 PM – 10 PM schedule to improve your day-to-day experience and output. You know what works for you and now you get to make that decision. However, it is important that you realize not everyone will be on your new schedule. You should still be flexible with your communication and follow up even if the majority of your ‘productive hours’ are at this new time.
2. Know Your Health Insurance Options
It’s important that self-employed individuals provide health resources and insurance to both themselves and their employees (if they have them). Understanding what self-employed insurance options exist based on your situation will help you find a solution, whether in the form of group insurance, health care tax credits or individual health insurance. In order to fill out applications for access to these resources, be sure to come prepared with the required documentation from your business and accurate income estimations.
To calculate this, you will need to estimate the maximum number of sales against local demand and product cost to create a revenue estimate. Subtract your projected operating expenses from this number to determine a final amount.
3. Become An Accountant
Now that you’ve become solely responsible for your income, revenue and budget, having a strong background in accounting and finance will help you navigate your business’ cash flow. If you don’t feel confident in taking on these responsibilities, hiring an outside consultant from the very beginning is important to maintaining organization and developing revenue projections in the future.
Make sure you have a clear understanding of the tax filings required for your business, along with the appropriate deductions and tax breaks that could impact your bottom line. Over time, you may also qualify for grants or funding through private and government entities; researching and finding the options that best fit with your financial strategy can also impact business growth.
4, Plan For Retirement
Based on your level of income and number of employees, there are multiple options for establishing a retirement plan. For example, if you project revenue under $6,000 and have no additional employees, a Traditional or Roth IRA is the simplest way to begin saving a portion of your income. Based on how each of these factors change over time, you may become eligible for other options like a personal 401(K), SEP IRA, Simple IRA or defined benefit plan.
5. Know Your Worth
Learning how to negotiate with clients is not only important to paying the bills, but establishing your business’ credibility and worth. Analyze your current or potential offering and research it against competitors to help define the true value of your product or service.
Maintaining that value, despite potential negotiations from clients, friends or family sets a precedence for the quality and standard of your work. It also sets you up for long-term success. While unique situations may arise, resolving to maintain this mindset will be vital to your overall stability and allow you to truly prosper.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.