How To Turn Your Freelancing Career Into A Startup
How to turn your freelancing career into a startup
Most people dream of one day starting their own business and walking away from the typical 9 to 5. According to Business News Daily, research shows that nearly half of Americans dream of starting their own business. Many people start by freelancing on the side, creating products or services, and selling them during evenings and weekends.
When you’re ready to make the leap from part-time freelancing career to full-time startup, there are some specific steps you’ll want to take to ensure success.
Start with a plan
Your first step should be to sit down and hash out a detailed business plan. A good business plan should cover everything: where and how you will conduct business, expected income and costs, and a growth plan for the next five years.
Uses for a business plan include the following:
A proposal to show banks and lenders
A way to keep you organised and on track
A clear idea of the pitfalls before you start
A avenue to help with troubleshooting those pitfalls
A way to ensure you don’t skip any vital steps
BPlans offers some free sample templates for writing your own business plan. Even better, they’re industry specific, such as:
Starting a restaurant or bakery
Opening a retail store
Becoming an accountant
Starting your own cleaning service
…and there are hundreds more plans listed on the site!
Get the legalities out of the way
Once you have your plan in place, get any legalities out of the way.
The last thing you want to do is spend years developing a product only to have someone else steal the design out from under you. You also want to avoid spending a lot of time and money promoting a brand, only to have the same thing happen. Protect your intellectual property and consult with a patent lawyer.
Once you’ve protected your idea, be sure to protect your operations. Make sure you’re sticking to all government regulations and are maintaining OSHA compliance. Hire some help, if you need it, but at the very least make a detailed checklist and check back on it regularly.
File corporation papers or business licenses
Whether you plan to form an S-Corp, become an LLC or work as a sole proprietor, you must file the necessary paperwork.
LLC and S-Corp paperwork is typically filed with your Secretary of State. Depending on the type of business you’re starting, licensing can vary from state to state.
For example, in Indiana you can run a home bakery and sell cakes on the side, but if you plan to grow your business and start selling online or en masse, you’ll need to use a commercial kitchen and get permits from the health department.
It’s important to understand the laws in your state that pertain to your industry. You don’t want to find yourself in legal trouble or at the receiving end of fines you can’t afford as a startup!
Figure out the finances
If you’ve completed your business plan, figure out how much you’ll need to run your business at least for the first year. You should also determine your living expenses for a year. Don’t count on earning any money from the business that first year; in fact, you may lose money.
You should know where the funding is coming from for the following areas:
Self-funding
Small Business Administration loans
Investors
Personal loans
Figure out what you’ll do if there is a cash flow problem. Have a backup plan. Estimate how long you expect it to take before the business starts to run a profit.
Inform those around you
Once you’ve decided to make the leap from hobby status to self-employed entrepreneur, inform everyone you know. They can help you spread the word, and many of them will support your new endeavor.
Consider the following ideas to inform people of your plans:
Make an announcement on social media
Send a postcard to extended family and friends
Pick up your new business phone and call those closest to you to share the news and ask them to help spread the word
Have a grand opening event- invite everyone you know and ask them to bring people too
Word of mouth is one of the most powerful and cheapest forms of advertising, so ask those who already like what you do to tell others about it. Reward them with a referral program for even more leverage.
Have faith in yourself
Starting a new business is rough. There are unexpected expenses, ups and downs and days when you’ll wonder if you’ve lost your mind. However, the rewards are immeasurable: more time with your family, the ability to call the shots, and the knowledge that you’re building something for yourself rather than someone else.
When things grow difficult that first year, remember why you started the business in the first place. Be proud of the steps you’ve taken to make it this far, and have faith that it will all be worth it in the end.