Financial Strategies for Transitioning from Salaried to Solo

7 Financial Strategies for Transitioning from Salaried to Solo

A 40's something woman was talking to me the other day about her growing sense of frustration with "working for someone else" and her longing to "do my own thing, drive my own wagon". But, she said with consternation, "I have family counting on me and a standard of living I don't want to sacrifice."

Everyone has to decide for themselves what level of sacrifice and risk they're willing to undertake in order to enjoy the satisfactions of working independently. Knowing some strategies for managing the risk will allow you to make a well-informed decision.

Of the seven strategies included below, the first two suggest ways to gradually transition from salaried to solo, instead of diving off the edge. The second two are ways to stretch the dollar; and the final three are ideas for getting started without stopping.

1. Continue to draw a (reduced) salary Leaving your current employment in order to develop your new business may look like the only option, based on an assumption that you won't get approval for reducing your hours. While this may prove to be the case, asking yourself why and how your company will profit from retaining your skills and experience for a transitional period can provide the basis for approaching your employer. Be sure to do your homework first, however, and be able to back up your request with a solid rationale. Also consider the issue of timing. You want to weigh informing your employer of your wish to leave with being prepared to leave if the answer to your request is no.

2. Develop another income stream If you need to leave your present employment, is there a skill in your toolbag that you can resuscitate and put to work without a significant expenditure of time or energy? Is moonlighting or freelance work an option? Virtual e-lancing websites (such as eWork.com, Guru.com, and e-lance.com) may be worth looking into for short-term professional services opportunities. Examples: A community mental health worker transitioning to private practice used his conflict resolution experience to sell a training package to public schools. A woman transitioning out of an insurance brokerage created and sold seminars on long term care financing at local retirement centers.

3. Reduce expenses Apart from fixed expenses - mortgage, taxes, insurance, etc. ?are discretionary expenses that make up the larger part of budgets. Doing a careful analysis of these expenses and choosing what you can forego for awhile can often save thousands per year. Carefully analyzing hidden expenses ? credit card interest rates, bank charges, late fees, auto debits, phone plans ? or "lost money" from low interest rates on savings may generate several thousand more per year.

4. Borrow It isn't necessary to wait to borrow for start-up costs until you have a well- documented idea to submit for a business loan. Refinancing a home or taking a line of credit are relatively low-cost ways of generating capital. Depending on your credit rating, you can also get time-limited low-interest loans from credit card companies. If you choose this option, applying for loans or refinancing packages while you're still employed is strongly advised. Your rating as a borrower declines quickly once the regular paychecks stop.

You don't have to wait! Get started on your new business idea while you're still employed. Several of the all-important first steps (below) can be started while standing in the grocery line or running on the treadmill. They involve asking yourself some questions and doing some informal research to get crystal clear about your idea. This can take weeks off your actual start-up time.

5. Identify your niche. Think about the services you're uniquely qualified to provide, as well as the ones you most enjoy providing. Be specific! Write them down! Then think about what group of people would get benefit from those services and have the ability to pay for them. Again, be specific: age, where they congregate, habits and values, how they define the problem your services are going to solve. If you don't know, ask. Find someone who fits your "ideal client" profile (s/he may be on the treadmill next to yours at the gym) and get permission to ask some questions. People generally love to be helpful.

6. Create your marketing plan. Don't be intimidated by the term "marketing plan". While what you need from a marketing plan will get more sophisticated as your business develops, for now it simply means answering the question, How is my business going to make money? What is the product or service you're going to sell? How will you describe it so people quickly recognize the value? How will you package it? (fee for service? by the project? on retainer?) How will you price it? (What's being charged for comparable services? What "feels right" to you?)

7. Manage fear! For most people, anything involving money involves some level of fear. It's important to acknowledge to yourself and to others that you are taking a risk, and you've decided it's a risk you want to take. So consider the fear natural, and find ways to manage it. Getting support from people who believe in you and in what you're embarking on is #1 in fear-management tactics. Don't assume that you'll get it from the people closest to you, or that if you don't have it you shouldn't proceed. They're probably the ones most impacted by your decision and so may be least ready to offer support. Their consent ? a willingness to go along with your plan ? is helpful, but support may have to come later. It's also helpful to set a goal (and a date for completion) that's key to your new venture ? arrange financing by a particular date, or sign a lease ? and announce it to at least one person. You'll find that making that commitment, saying it out loud, and following through will in turn generate more confidence and more forward momentum.

To all of you who are tired of marching to someone else's drum and are eager to go solo, these strategies should help you take prudent but positive steps toward realizing your goal. Good luck!

Nina Ham is an internationally certified women's business coach and a licensed psychotherapist. Her company, Success from the Inside Out, provides programs and services essential for anyone making the salaried-to-solo transition, including niche identification, marketing fundamentals, and self management for solo professionals. Go to her site, http://www.SuccessfromtheInsideOut.com and take her free quiz, Is Going Solo for You?

____________________

Advertisement: Honest Riches - Click Here!

Advertisement: Lost AdWords - Click Here!

Advertisement: Get $1 Million A Month In Google Pay-Per-Click Ads Free! - Click Here!

Advertisement: Who Loves Money? - Click Here!

Advertisement: SEO Elite, the GrandDaddy of SEO Software - Click Here!

---

The Power Of Personal Environments

I've got to admit, I'm a big fan of comfort. I like it when things in my world are stable and reliable. For example, my home is... Read More

Lessons Learned from Successful Entrepreneurs

Entrepreneurs are a special breed of high achievers. They create things, get things started: businesses, clubs, churches, associations, even nations. Their motivations vary. Not all want to... Read More

The 7 Major Reasons Businesses Fail and How to Overcome Them

This year, over 800,000 of the approximately 2,000,000 start up businesses will fail!Nearly 1,000,000 of those remaining will fail within 3 years. Why do so many businesses... Read More

Mobile Car Washing Long Term Opportunities in the Market

The long-term outlook for the Mobile Car Washing industry is positive. It is ripe for savvy company to develop regionally or nationally to dominate the market. Currently... Read More

Find Out If You WILL Be Successful As a Franchisee?

Will I be successful as a franchisee?One of the soundest pieces of advice to take when considering becoming a franchisee is to 'Assess Yourself'. Assess whether you... Read More

Face The Fear, Ladies

Okay, I'll begin by telling you that I've been divorced for about 5 years, have an amazing family and by anyone's standards, I have a wonderful life.I... Read More

What is Entrepreneurship?

In discussing entrepreneurship and writing articles on the subject, I have found that it aids understanding when we begin by agreeing on exactly what the word means... Read More

Secret Revealed In The Business Code

? Beginners often rush into business without any planning.? Unless you do your homework, there could be many avoidable pitfalls.? You will minimise these pitfalls with careful... Read More

Starting Your Business: It All Boils Down To Making Money and Saving Money

Bootstrapping in the context of business start-ups refers to the use of creative financing approaches such as leveraging personal savings, credit-card debt, loans from friends and family,... Read More

Business Planning Overview

The successful entrepreneur is generally more inclined, once a business idea is selected, to sharpen the concept by a detailed planning process. The result of this step... Read More

How Much Risk is Necessary to Grow Your Business?

A business owner is thoroughly responsible for their own financial survival and possibly the financial survival of their employees. Business owners, for the most part, seem to... Read More

The Magic of Thinking Small

Hey!Many of you might disagree and I'm prepared for that.Many 'guru's' might say "Mike, you're wrong." and I'm prepared for that.But what I'm about to share with... Read More

Prescription for the Future and Technological Revolutions

The world sure has changed in the last two-decades hasn't it? When I started out in business, there were no cell phones, fax machines, computers, etc. And... Read More

When Your Business Feels Like an Arranged Marriage

Q. I was laid off six months ago. Jobs in my field are scarce so I moved to a new town to start a home business. People... Read More

The Boss is DEAD!

Some of us are born into families with "it", some of us are just driven over the edge to "it", and some of us crave "it", but... Read More

Curb Your Enthusiasm

Isn't enthusiasm a good thing? Aren't we urged to be enthusiastic about what we do? To be committed?We are...but enthusiasm has a dark side too.When the word... Read More

Entrepreneurs - 9 Top Mistakes to Avoid

1. Isolating Yourself When setting up a business, you can get so overwhelmed with the administration that you don't focus on building up your network. Networks can... Read More

Definition of Entrepreneur

EntrepreneurAn entrepreneur is a man who organizes and manages the business. The following are the responsibilities of an entrepreneur that what he has to do?1. PlanningFirst of... Read More

Are You Ready To Be Your Own Boss?

You have this burning desire you want to be on your own. The temptation is so great that you want to quit your job. Enough is enough.... Read More

Top 10 Mistakes Entrepreneurs Make Before They Even Start

So you want to start a business. You have an idea. Lets say you want to be a carpenter. You print some brochures, some business cards, and... Read More

How Good Is Your Big Idea

Q: I want to start my own business. I have tons of business ideas that all sound great to me, but my husband is not so sure.... Read More

CHINESE TAKE-OUT: Oriental Business Principles Demystified For Online Enterprises

"The expectations of life depend upon diligence; the mechanic that would perfect his work must first sharpen his tools." - ConfuciusChinese people are well-renowned for their industriousness... Read More

Veteran Entrepreneurs Are Growing In Ranks

When I'm not running my own business, writing articles about business, speaking to groups and organizations about business, or consulting with companies who want my advice about... Read More

Evaluating an Opportunity

Business opportunities are often based on broad trends, such as:? demographic, such as the "graying" of America (creating opportunities in health services, for example);? sociological developments, like... Read More

Entrepreneurial Business Plan The Down And Dirty Way

Does the idea of running your own business sound exciting? Do you have a business up and running and want to take it to the next level?After... Read More

Judging Entrepreneurial Ideas

Most entrepreneurs constantly come up with new ideas. Whether they are working on another project, driving, or lying in bed, their minds are constantly churning out new... Read More