Self-employed workers are in business for themselves. To make it work, you have to find clients, manage your workload, learn how to market yourself, and balance your books (or find tools and pros to do it for you).
The benefits of self-employment are many, including:
For all its virtues, however, self-employment isn’t for everyone. Before you embark on your new #bosslife journey, ask yourself whether you:
You don’t have to be an industry veteran to succeed at self-employment. But it helps to realistically assess your strengths.
Your first few months—even your first couple of years—of working for yourself can be tough financially. There’s a learning curve to self-employment, and unless you’ve got a full client roster before you start, you’ll need time to start bringing in steady income.
It’s a good idea to have a few months’ worth of expenses saved to cover any gaps while you get your solo career off the ground. Here’s how to build up that cash cushion:
Track your expenses for a month.
Include everything from rent and utilities to groceries and streaming.
Tally your one-month expenses.
Multiply that total by at least three (though six is ideal).
Put whatever you can into a savings account.
Once you hit that magic number, you’re ready for self-employment!
If you’re struggling to save, consider a hybrid approach. Start freelancing on the side, taking on a client or two to build income and name recognition. When you’ve got some momentum, you may feel more comfortable diving in. Plus, the extra income can pad your savings fund that much faster.
Building a self-employment fund can help you cover your expenses during a career transition. But keep it separate from your emergency fund, which should also include six months of expenses. Your emergency fund is there in case you can’t work or your roof suddenly needs to be replaced. Your self-employment fund is there to help you while you switch professional gears.