After you’ve been employed for a few years, you probably have job security, a regular income, benefits, and a bright future. Even so, you may want more out of life, and starting your own business may be the way to get it. However, moving from employee to entrepreneur requires planning, a clear understanding of your career objectives, and confidence that you can do the job as an independent business owner.

Here are some suggestions for creating a smooth transition from employee to entrepreneur, increasing your chances for the success of your new company.

1. Think like a business owner. As an employee, chances are it was your job to accept management’s decisions without questioning the reasoning behind them. When you become a small business owner, it’s up to you to set the goals, create the plans to help you achieve them, and then do the necessary work. This includes learning to say “no” when you feel a suggestion or business course will deflect you off the path toward your goal.

2. Get used to more work and longer hours. Employees have a work schedule. They enjoy weekends, vacations, sick days, holidays and three-day weekends from time to time. You don’t. As an entrepreneur building a business, prepare yourself to work longer hours to add value to your company. You may find yourself working for less than the hourly minimum wage, but as your company grows, it should become more valuable – value that can translate into a very nice pay day in the future.

3. Decide how to most effectively position yourself. Let’s say you’ve spent the past 10 years as an IT professional working in the insurance industry. You know IT and you know insurance. Do you position yourself as an IT professional, an insurance company IT professional, an insurance industry consultant, or some other variation on past work activity? Focus on your strongest assets. Chances are, this is what you enjoy doing the most, which, in turn, may point you in the direction your new business should follow.

4. Determine your target market. Business executives, consumers under 18, hobbyists, retirees – just which market segment will your new business target? Conduct Internet research to determine how crowded the field is, how many competitors you’ll face, and what these competitors are doing to promote their services or products. Remember, these competitors have a head start on you, and you’ll have to play catch up quickly.

Also, define your service area. You can grow a successful business locally, regionally, or globally. If you’re starting a home plumbing business, you want customers close to your business headquarters, but if you’re selling consumer goods, you may want to reach a global market.

5. Expect to do it yourself. As an employee, you could depend on others to handle shipping, prep a report for a client, or answer correspondence. As the owner of a start-up, you may not have the financial resources to hire an assistant.

As the CEO, President, and only employee of ABC Global Enterprises, you’re the one who boxes up orders and runs to the post office by the end of the day. Start-up entrepreneurs wear a lot of hats – from top management to office custodian. Chances are you’ll undertake a lot of different business activities, so learn to shift gears quickly during each work day.

6. Schedule each day. Time is always in short supply for entrepreneurs. It seems there are never enough hours in the day to get it all done. Create a weekly schedule and build in “miscellaneous” time to catch up. And don’t just focus on day-to-day activities. Spend part of each day developing a longer-term business strategy to reach profitability quickly.

7. Bank some living expenses. It can take months for a new company to gain traction and start generating revenues. Put aside enough money to pay personal expenses for a while – at least six months. You can shorten the time it takes for your company to reach profitability by developing a business plan with reasonable expectations and projections for the months ahead. It’s a good idea to develop a business plan before you quit your day job.

Many of us dream of business ownership, and while some start-ups grow into successful businesses, many do not. As an employee, you enjoy a certain security in knowing you’ll get paid, but as a business owner, you may not get paid for all those extra hours you work to build your business.

Do as much prep work before you give notice to your employer. Then, change your mindset from worker to owner. You think differently, you act differently, you plan ahead, and look to the past for what worked and what didn’t.

Jumping from employee to entrepreneur may be a leap of faith, but it’s faith in your ability to achieve business success. Follow your dreams and have faith in your ability to do the job right.

 


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC