Thinking of quitting your day job and becoming self-employed? From registering your business to honing an effective marketing plan, there are several things you should keep in mind in order to launch a successful business. Here are our top five tips to help smooth the transition when going from employed to self-employed.
What steps should you take before going self-employed?
1. Create an emergency fund
Whether you're looking to offer skilled services or sell a product of your own creation, as a self-employed person, you won't have the financial security you once had as an employee. The first thing you should do is plan your exit strategy by saving a certain amount of money to float you through slower business months. If you can, aim to save at least three to six months' worth of expenses. This will ensure you have enough money to cover rent, bills, and food while you're getting started. It will also provide you with a financial cushion to ensure you don't have to take another in-house job if the business doesn't take off as fast as you had hoped. In addition, certain clients may not pay you right away. Your emergency fund will help you stay grounded in the event of delayed payments. It will also help you manage your cash flow better.
2. Test the waters before you dive in
If possible, don't wait until you quit your job to start your business. Start offering your services in your spare time. Work during the evenings and on weekends as you cultivate a client base. This strategy will help you figure out if you like working for yourself. It will also help you create a suitable emergency fund that much quicker.
Thought of an original name for your business? Register it with the CRA as soon as possible! You can do this online through Business Registration Online. Registering your business name will provide you with a business number. You will need this number to register for accounts such as GST/HST, payroll deductions, and corporate income tax. If you plan on using your own name as a sole proprietor, you do not need to register your business name. But, if you plan on using a name other than your own, registering your business name is mandatory. This is true for all Canadians, except residents of Newfoundland-Labrador. Residents of Quebec can register a business name with the Registre des entreprises.
4. Make sure prospective clients can find you
Before you launch your business, make sure your marketing materials are in check. The basics include creating a website, having business cards made, and establishing a social media presence. You might also consider joining a professional association or your local chamber of commerce. For more ideas on how to develop your business, check out our previous article on the topic.
5. Organize your work space
As a self-employed individual, you will be responsible for providing your own tools, equipment, and workspace. You'll want to make sure you have all these things organized before you start working. Creating an inspiring environment that's free of distractions will allow you to do your best work. Accordingly, doing good work will encourage repeat business, which will ensure greater success in the long run. In the end, long-term success is the goal we should all be aiming for. If you've always dreamed of being self-employed, planning ahead can help guarantee your efforts will be fruitful. So put these tips into action and get to work!
