If you’ve decided to make the switch into the entrepreneurial ranks – congratulations and welcome aboard! As incredible and rewarding this journey can be, it also comes with its setbacks, the most immediate one being the adjustments needed for your new career to thrive. Since there are many potential difficulties you might encounter, the following steps can help you prevent and deal with the majority of these obstacles successfully.

5 financial tips to know before starting your business

1 | Put a price tag on your lifestyle

In case you haven’t already started monitoring your expenses, remember that a major change such as career switch can make it difficult for you to maintain your desired lifestyle. Your current position may offer some perks that you won’t have as an entrepreneur, such as a free gym membership or regular educational conferences, so you need to consider how or if you’ll accommodate those needs in the future.

There are various applications you can use to help you evaluate your financial situation, such as Dollarbird or Mint. These apps can help you get a better grip on your expenses and help you see how you can change your spending habits to suit your new life. With this information in mind, you can carve a unique budget for your future business endeavors and stay in control of your finances throughout the transition.

2 | Plan for the unexpected

Once you start collecting your spending and earning information, you should also consider introducing a few contingency plans. After all, your new job, especially if you start your own business, won’t come with the same insurances and perks as your current one. That said, you’ll need to look for the best insurance plans for yourself (and your family, if applicable), and still set aside some money for unplanned mishaps.

Whether you encounter a security issue on your new website or you need an unexpected laptop repair, your emergency fund is sure to come in handy at some point! It’s wise not to keep it a strict amount but continue pouring in extra cash whenever you have the chance and let it grow over time.

3 | Work for additional income

Until your own business starts delivering enough regular income to replace your current paycheck, you’ll need to find more work – project-based or otherwise – to supplement your income. Anything you can do in your free time such as taking paid surveys online, tutoring online or in your community, or pet-sitting can make a significant difference during this transition period.

What you should do is create a schedule that will allow you enough time to devote to these temporary gigs without harming your own business venture. Many people get sidetracked by their freelancing opportunities, so stay consistent with building your own business while you do your best to take on extra work to support your career change.

4 | Start networking

Since you’ve probably met many people in your previous jobs, this is the time to knock on as many doors as possible and let them know you’re looking for freelance work. Perhaps they can give you a reference, share a few contacts with you, or point you towards the best networking events in town.

Both online and offline, you’ll come across a wide variety of conferences, seminars, workshops, or fairs, where you can get in touch with experts in your niche. Anything from potential collaboration to seeking out potential clients is possible, so stay active and attend these events whenever you can. Social networks such as LinkedIn can be a great source of professional connections as well, so don’t hesitate to send a few messages to the right people!

5 | Keep your health in check

How well do you understand your current health insurance and its benefits? Every health plan is different, and perhaps you can make the most of your company’s medical and dental insurance to do one final detailed checkup before you move on to your own business adventure. In case you have a family to care for and they have been dependent on your existing medical coverage, make sure to take the necessary precautions and obtain the needed insurance after you hand in your notice. If you’re in the United States, remember that health insurance is currently mandatory and there are penalties for not carrying what the government deems adequate health insurance.

Since many companies offer benefits such as free fitness memberships, discounts, and similar prepaid health services, find out which of those you can afford after you make the switch. Perhaps you can find less pricey, but equally healthy solutions that fit your new budget. If you’re in the USA, consider looking at alternative insurance options such as health share organizations or wraparound insurance combined with a direct primary care practice. If you get creative with your solution, you’ll be able to make it work for you!

 

Since every business is different and you can expect many ups and downs on the road to success, it’s best to plan ahead and do as much as possible to prevent potential difficulties that are otherwise all too common. With a money-savvy mindset and some imagination, you’ll be well on your way to building your own business!

About the Author:

Claire is a personal and professional development expert who believes that positive attitude is one of the keys to success. You can find her online writing and giving tips about lifestyle and development as a regular contributor to highstylife.com.

You can find her online at:
Twitter: https://twitter.com/adamsnclaire
Facebook: https://www.facebook.com/clairenadams

If you're ready to quit your day job, your finances may take a hit! It's okay, though: you can prepare yourself and hit the ground running with these five tips to help you get started. / #budget #selfemployed #freelancing #entrepreneur / money management, entrepreneurship, make a plan, budgeting, side hustle, networking
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