Self Employment: Preparations

It is easy to say I'm going to leave my job and become self employed because I have a good idea. We all have commitments and bills to pay every month. So, the question is, what preparation do I need to do to get me in good shape to pursue that self-employment idea? While trying to come up with a suitable self employment idea, you might want to think about the preparation required for this big step.

1) Save, save, save
It is all a matter of discipline. People who say they have no money left a week before their paycheck is due will need to rethink their choices with money (and lifestyle). Going it alone in self employment will require a lot of drive and discipline and if you will not engage in the most basic of personal financial planning, I doubt you would ever be successful in self-employment. Self employment is not a good idea for you. As a rough guide, I think you need to save up at least 3 month's of your usual monthly expenditure before you dive into you self employment idea.

2)Simplify your life
Do you have overdrafts with 2 bank accounts and 4 credit cards with growing unpaid balances? College degrees you still haven't quite completed? Home improvements you left halfway through the project? You will probably have no time to complete these things once you start out in self employment. You will run short on time so finish things while you can and try to organise your life so it is more manageable. Consolidate bank accounts, file all your paperwork, make things easy for you when you are self employed and running the show alone.

3)Prepare your family and friends
Let your close and loved ones know that they might see less of you when you are self employed. At least for the first year. Your family needs to know that you will be working very hard and let them know why you are doing this. Try to make them understand this is something you really want for yourself and it will work out better for the family as well further down the line. It will also come as less of a shock to friends when you start cancelling on birthday parties and other social commitments.