Top Tips For Going From Salaried To Self Employed

Salaried To Self Employed

Being self employed is a dream of many people, especially those in certain jobs! However, one of the biggest challenges when jumping that divide is managing going from being salaried to being self employed.

Are we going to give you 10 top tips for managing the jump from salaried to being self employed? No, we will give you 4. Just because we like to be different!

Top Tips For Going Self Employed

1 – Carry on drawing a salary. Do it at a lower level, sorry but you have to. Whether you have savings or are already generating an income from being self employed, give yourself a minimum regular salary.

Most accountants will recommend taking a minimum salary for tax purposes, we recommend you do it to ease the transition. It also provides some early focus and structure to your new life of being self employed.

2 – Reduce expenses. The aim of being self employed is to be happier and richer. Richer does not mean having more money, not yet anyway. Richness is about quality of life and you will get that.

Look at your personal outgoings then remove the real luxuries. Don’t penalise yourself, use it as a motivator. Set yourself a few goals, i.e. If you get 10 new clients by June then reward yourself with your old Sky Sports package. Something like that, you get it…

3 – Borrow before you start. Once you go from salaried to self employed it becomes more difficult to raise personal finance. Most lenders will want a regular income, so when that goes it can be harder to raise finance.

If you are thinking about that interest free credit card, or new sofa from DFS then you may want to do it before you start. Also get the finance for going self employed in place before you start, it is much harder to do afterwards.

4 – Manage your worries and fears. Not having a regular salary creates worry and fear. Pretty natural really.

The key here is to manage that fear. Speak with others who have done a similar thing. Believe that by reducing your costs and planning for being self employed you will succeed. Simple things like taking a small regular salary will help manage your fears.

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By Dave Farmer

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