If you’re an aspiring entrepreneur and want to build a successful small business, then you’ll need to be prepared for everything from finding business opportunities to managing your finances so you can save for retirement.
Getting started with being self-employed
Before starting your latest business venture, you’ll need to first establish whether you’re ready for self-employment. It does often require more hours than a typical 9-5 job, along with an entrepreneurial spirit, passion and the willingness to work by yourself.
Being self-employed isn’t the same as starting a small business, as you’ll work as a sole proprietor or an independent contractor without other employees working under you. A small business owner, however, likely has several employees or uses contractors to handle some of the work.
Once you’ve decided that the entrepreneur life is for you, you’ll be able to settle on what business you want to run. For some, a hobby may turn into a money-making business, but knowing the difference between a hobby and a business is key when figuring out your finances. Some business ideas may include running a consulting firm, service business, or freelancing.
Transitioning from a full-time employee to a full-time contractor requires careful planning. Starting with saving enough money to cover several months of expenses to help pay bills while your business income is being established. Another option is to start a side business before finishing your full-time job, this will ensure you can earn a dual income and grow your business without surrendering a steady income.
Today’s gig economy has made it easier to make extra money on the side, and thanks to the growing free market system, you’ll be able to take on short-term gigs and temp positions as an independent contractor. Increased mobility and tech solutions have made it easier to work online too, meaning you can work for different companies doing various tasks while working from anywhere.
Having a clear business idea and financial strategy is a great place to start, but you’ll need a plan for how you’ll put your thoughts into action. Developing a business plan will also help guide your decisions as you make the change to being self-employed.
Sole proprietor jobs
With the gig economy growing in popularity, self-employment is no longer limited to certain industries. It’s easier than ever to find opportunities that fit into your schedule, skills and interests, from being a freelance photographer to running a baking business.
Your interests will often guide you towards a business idea. For example, if you’re a foodie, opening a restaurant isn’t your only option, you could become a personal chef or create a cupcake business. When deciding on a business idea, make sure you consider your interests and how they make work.
Use your creativity
If you’re a creative person, you may want to use that to drive your business ideas. Whether you’re a musician, an artist or a designer, working for yourself can give you more creative freedom. You can also use your network of professional and personal contacts when you’re establishing your business and looking for your first gigs.
Utilise your professional skills
If you’ve got professional skills in a specific industry, like physiotherapy or project management, then you can use those to find your next business opportunity. Instead of working for someone else, you may want to start your own practice or firm. Chartered accountants have been able to grow their clientele with robust accounting software to help them manage and streamline their workload.
Nowadays even nurses are able to move away from traditional employment and take on travelling nurse jobs that offer short-term assignments in a variety of locations, that way you can see the country and still earn a steady income. If you have professional experience in law or politics, you may be able to combine that knowledge with your passion for certain issues as a self-employed lobbyist or get more freedom to work on the cases you enjoy by becoming an independent paralegal.
Construction is another industry that supports self-employment, so you could start your own general contracting business that focuses on a specific part of the construction process.
Fulfil the needs of potential clients
Heading online is a great place to start if you’re interested in the gig economy. There are numerous options for those wanting to start self-employed work. You could start a freelance writing business that lets you support other entrepreneurs who want to outsource writing for their blogs, websites, or newsletters. Or if you’re savvy with social media, you’ll be able to build a business as a self-employed social media consultant, providing your services to multiple businesses.
Working with the sharing economy
The sharing economy has opened up new opportunities and possibilities for those wanting to be self-employed. Whether you’re delivering someone’s groceries or restaurant orders, or you’re driving them around, there are many apps and companies available where you can work as an independent contractor within the sharing economy and manage your gigs as you go.
Providing on-demand labour
Another popular set of opportunities in the gig economy is providing on-demand labour. Whether that be pet sitting, babysitting, running errands, moving, cleaning, or performing maintenance tasks, you can do all these jobs and get paid to do so.
Growing your self-employed business
As you grow your business, you’ll also be developing the skills needed to be a smart and successful business owner. This comes from getting first-hand experience, but you can fast-track this growth with tools, training, and business strategies. But you’ll also want to take care of yourself and prioritise a healthy work-life balance to avoid burnout.
Starting and scaling
If you’re self-employed it means you’ll have to start somewhere, whether building from the ground up, or maybe even buying an existing business. As you grow your business into a successful and thriving venture, you may even consider opening another location, or if you’ve scaled beyond freelancing, you may want to expand operations in other ways. Regardless of how you started your business, it’s important to maintain a strong work ethic so you can keep things running smoothly and stay on track.
Putting existing tools to work
You don’t need to start from scratch or reinvent anything, there are many tech solutions available for those who are self-employed. These software and app solutions can automate many processes, from everyday tasks to collaboration, payment processing, bookkeeping and communications.
Using the cloud for your business can also simplify your business operations as you’ll have information accessible from any internet-capable device. The time saved using cloud-based and tech solutions can free up time to spend on customer service, product development and other activities to help generate revenue.
Learn and adapt
As your self-employed journey continues, it’s important to still set aside the time to learn and adapt. Learning new tools can help you run your business more efficiently, leadership seminars can strengthen your managerial skills, and going back to school may even be an option if you have a specific goal in mind. Other entrepreneurs may go straight to the source and seek advice from a business coach on topics like sales strategies, management techniques or marketing methods. And once you’ve got a few years of experience under your belt, you may also want to share what you’ve learned with others as a mentor.
Your finances
A key part of running any business is the finances. Whether you have enough revenue, whether you’re spending and investing wisely or whether profit margins are high enough, by understanding your finances you can give your business a stronger foundation to succeed.
Starting with a budget can give you a solid framework for your business decisions. It’ll help you calculate the amount of revenue you need, which will guide how you set your rates or salary. And if you need funding, you may be seeking a bank loan, looking for investors, or applying for government programs. Some financial situations are harder than others, so sometimes guidance is needed as you navigate the world of self-employment. So, getting personalised advice from an accountant or a financial advisor may be the best avenue to take.
After you’ve figured out your funding, budgeting and salaries, you’ll then need to consider how you’ll go about filing taxes, which is where accountants, financial advisors or accounting software can come in handy.
Saving for retirement
Whether you work for yourself or a wider company, one day you’ll want to retire into a comfortable financial situation. But retirement can look different when you’re self-employed, as you’re responsible for your own savings without employed contributions. But there are some options for how you can save, like a tax-free savings account (TFSA) or retirement annuity (RA).
Another key part of saving for retirement is about creating a plan to keep your business running without you. This involves considering who you’ll want to pass your business on to, whether you’ll sell your shares to a partner, or sell the whole company to a third party. Strategies, like an estate freeze, can help that move towards the future, whether you’re ready to walk away entirely or if you want to retain some sway in the business.
The decisions you’ll make when you’re self-employed
Even with the best plans and efforts, running a small business comes with big decisions to make and, from time to time, conflict. These decisions can range from choosing charities for philanthropic ventures to improving operation strategies. Or maybe you’re ready to step away from certain business operations as you transition particular duties to other staff members.
Fine-tuning your decision-making skills can ensure you’re making these decisions with confidence, and these methods and models can come in handy when you’re not sure what decision to make. You’ll even have to make decisions on seemingly small things one day, like what printer paper to buy, to larger decisions the next, like how to invest your capital.
Preparing for possible conflicts is also a good approach to take, as your staff and customers will be looking to you to handle issues when they arise. Learning how to tactfully handle challenging situations and clients can help you navigate the situation while preserving your company’s reputation. And depending on the nature of your small business, there may be other sources of conflict, like a conflict of interest. But by being able to recognise potential conflicts, you’ll be able to stay ahead of and resolve issues when they arise.
Advice and inspiration
Running your own business takes a lot of work, and taking a little inspiration from other businesses can help. South Africa’s self-employment economy is constantly growing, which is great for aspiring entrepreneurs as you’ll have access to plenty of advice from others who have been where you are.
Hearing from other entrepreneurs can also give you techniques that work, like making the most of the first 20 minutes of your day to boost your productivity, and provide the inspiration you need to keep going. Whether you’re just starting out, or already running a thriving and successful business, you should always be looking to learn and get advice from fellow entrepreneurs.
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