Tens of millions of individuals have tried their hand at freelancing in the last few years. Some have gotten a great side hustle out of the deal. Others have gone full-time and replaced their day jobs. And then there are the ambitious few who have not only succeeded but made the absolute most out of their freelancing career.
For those who find that their freelancing success is quickly growing beyond their capabilities, there’s one step that often makes the most sense: starting your own business. If you’re thinking of creating a small business from your freelance career, here are a few thoughts to keep in mind along with some suggestions to help you get started.
Don’t Take the Small Business Step Lightly
Freelancing and small business are very similar in many ways. However, truly becoming a small business owner can involve many more things than working as a solopreneur. As such, it’s important to ask the right questions before you make the shift. Make sure to consider things like:
- Who it will impact: Will your change in employment take you away from family or close friends? Are you okay with that potential situation? Will it endanger the financial security of your loved ones? How will a new business impact those around you?
- Your entrepreneurial temperament: Are you able to make pivots, stay flexible, and otherwise adapt to situations when they’re out of your control? Do you have the tenacity to keep trying, even when things don’t go as planned?
- Your career goals: Will launching your own business help further your long-term aspirations? Or will it cubby-hole you into a specific area of business that you never intended to be in?
Mulling over these tough questions and concepts is important. It can help you go into your new business with a rational, realistic mindset.
Clearly Define Your Goals
Along with reviewing existing career goals, also consider what new goals you should set as they pertain to your business. For instance:
- Do you want to create a solopreneur business, like building a blog or creating an online course?
- Are you looking to hire employees and grow beyond your individual capabilities? If you’ve never recruited before, there are strategies you can employ to help you do it well.
- Whatever direction you go in, do you have a clear idea of what you consider to be “successful?”
That last question is particularly important. If you launch a business without even a vague idea of what you want to accomplish, you can become consumed by perpetual success. Your goals don’t have to be set in stone, but you should always have something in mind that you’re aiming for.
Review Your Finances and Consider Legal Concerns
Assessing your costs is ground zero for launching a new business. You may know what it costs to operate your freelance activities, but where will those expenses change if you create your own enterprise? Additionally, before you launch:
- Make sure that you have an emergency fund available to help with unexpected expenses.
- Plan on continuing your freelancing to keep income flowing in while you’re building your business.
- Consider how much money you should set aside to pay your business taxes.
Legally, there are countless things to keep in mind. Creating a legal entity, navigating employment laws, setting up payroll, getting insurance, the list of legalities goes on and on. Every situation is different. It’s always important to find a good lawyer that you can trust to help guide you through the necessary steps.
Break Down the Logistics
After you’ve addressed finances and taxes, start to break down the nitty-gritty concerns that come with launching your particular kind of business. Here are a few questions to help you get started:
- Do you have a niche? Consider what unique selling point (USP) or one-of-a-kind products or services set you apart. As is the case when you’re freelancing, you want to position your company as an expert in its field. This will attract higher-value clients whom you can charge more for your services.
- How will you get business? What methods will you use to grow your business? Will you lean on existing clients, referrals, community networking, or marketing to get the word out about your new company?
- Where can you improve? Are there any skill gaps that you need to address to run your own business? Should you do something more drastic, like get an MBA, to jumpstart your leap into small business ownership? It can provide you with both hard and soft skills that are crucial to successfully running a business.
The goal here isn’t to predict every aspect of the future. Nor can you truly prepare for every single step ahead of time. However, if you can launch your new business in an organized and thoughtful manner, you can maximize your chances of transitioning from freelancing to small business ownership successfully.
Shifting from a successful freelancing career to a small business is a very natural step. However, it doesn’t happen without a little effort. Nor does it take place overnight.
If you’re considering the shift from freelancing to small business ownership, make sure to take each step thoughtfully. Lay the foundation, ask the right questions, and think things through. If you can do that, you’ll be able to give yourself the best possible chance at success in your future entrepreneurial efforts.