How To Transition To Working For Yourself [Ultimate Guide]

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If you have found yourself here, you’re likely trying to transition from working a traditional job to being self-employed. You can forge a path and transition to working for yourself easily. Everyone’s journey to being their own boss looks a little different, but there are steps you can take that will ensure your success in working for yourself. 

Here’s the ultimate guide to transition to working for yourself:

  1. Figure out why you want to work for yourself.
  2. Get real about your skillset.
  3. Formulate an escape plan.
  4. Build an emergency fund.
  5. Set up passive income.
  6. Give it a trial run.
  7. Quit working for the man.

To learn how others have made this transition, read more about each of these steps and make a plan of action to implement them in your own life!

1. Figure Out Why You Want To Work for Yourself

Have you ever gotten burned out working for someone else?

Before you even think about walking into your boss’s office and performing the monologue of all the reasons you’re never coming back, you have to figure out for yourself what those reasons are. 

If you want to succeed at working for yourself, you’ll need to get good at introspection. Take a look inwards and figure out why you want to walk away from the stability of your job into the wild west of self-employment. 

There are many good reasons, but there are about a hundred bad ones for every good reason. It’s okay to go through this process of introspection and realize that some of your reasons aren’t good ones, but at least one reason needs to be. 

how to transition from full time to self employed

Make this an active process and put some pen to paper. Write out what you are figuring out about yourself. Writing things down isn’t just a way of recording your thoughts. It’s also a beneficial tool for figuring out your thoughts.

Powerful Reasons To Quit Working for Someone Else

I won’t be able to write out all of the good reasons that could exist for transitioning to working for yourself, but here are some indications that yours are the good kind. 

A good reason will say something about your potential. They might include:

  • Not wanting to be limited to the opportunities available to you by a regular 9-5 job. 
  • You feel as though you have something of value that you want to share with the world. 

These are more than just good reasons; they’re great ones. 

You can learn how to effectively manage a team remotely if you are worried about stepping into working for yourself. In my own experience as a writer, my “real” job included a lot of writing. I was a research assistant in academia, which meant that I was expected to produce original work. It should’ve been a dream come true!

However, I felt like I had my wings clipped. The feedback I received from colleagues and journal referees was that my creativity was admirable, but I would need to tone down the personality to be taken seriously.

I knew that if I wanted to write in a way that felt right and fulfilling, I needed to strike out on my own. One option I considered was a contract-to-hire job as it offered a mix of both worlds; self-employment yet steady paychecks. I believed in my potential, but I was never going to reach it by dulling the edges of my creativity and squashing down my personality into a tidy, little box. 

Your own story may not look exactly like this, but hopefully, you feel it’s akin to the overall feeling I had. Whether you’re a writer, designer, illustrator, or a birthday party clown, if you know that your job is holding you back, it’s time to start making a plan to reach your full potential.

Powerless Reasons To Quit

I had a friend in college that dropped out of school and quit his job at a local sandwich shop to “be an entrepreneur.” He had no plan, no clear idea of what he was even going to be selling, and grand dreams of Lamborghinis and a Rolex collection. 

He ended up living out of his Honda Civic and selling weed to freshmen. 

Now, I’m not saying this is what happens to everyone who doesn’t do things the way I did or for the reasons I did, but I can say it would be a lot less likely. 

Are your reasons for wanting this about the cars you wish you could drive or the clothing you wish you could buy? It isn’t wrong to desire nice things, but these things won’t consistently motivate you to get up before the sun and get to work.

Is it because you just don’t like your boss or want to be able to party all night and sleep all day? Some Instagram influencers might appear to have made it big for these reasons, but that’s just the fiction they’re telling through social media. 

Doing well while working for yourself isn’t less work. You might work less, but the times you’re working are spent putting your heart and soul into the things you’re selling. The only value your work has is the value you put into it. 

2. Get Real About Your Skill Set

You’ll need to fight the temptation to throw all of the spaghetti at the wall and see what sticks. Success comes easier if you aren’t trying to be a jack of all trades. While there are general skills you need to be a freelancer, being specialized in one area will help you in the long run.

There’s a lot of talk in the freelance community about “finding your niche” and then throwing yourself into it, which can be good advice. This means to find the environment where you function at your best and flourish more than the competition. 

When you find your niche, you’ll have a lot more success than if you just try to put your hands in as many pots as possible. If you’re into game design and are an expert on calligraphy, find a way to take those two things and make something unique. 

While it’s true that this game would only be attractive to a particular group of people, you would have a good chance of getting the entire group to spend money on the thing that you’ve made.

People aren’t likely to bite if you just try to make yet another pixel-art farm simulator because you think that is what will sell. Why? Because Stardew Valley exists, created by Concerned Ape. That is his niche, not yours. 

Find your niche, get super specific, and be the best at it. The value of what you are making will ensure that success will follow. 

3. Formulate an Escape Plan

Alright, you have many great reasons to work for yourself, and you know exactly what you’re going to do. It’s time to clear your desk and get started, right? Wrong. Quitting your job is Step 7, and you have only made it to Step 3. 

It takes a lot of planning to be successful, especially if you are wondering can you survive as a freelancer on your own. There’s still a lot of work to be done before you’re ready. 

Instead, it’s time to lay out the plans for how you’ll prepare to quit your job. This means knowing your finances and expenses inside and out.

  • How much is the minimum amount of money you need to survive each day? Each week? Each month? Year?

Get out the spreadsheet and list every expense you have, from monthly rent to your favorite newspaper subscription. Every dollar needs to be accounted for.

Figure out which expenses are bi-weekly and which are monthly. Some might not have an exact schedule, like getting oil changes in your car. Others might be “just in case” expenses, such as a trip to the emergency room. 

You can use an online budgeting tool to help you. While the interface is simple, this calculator is thorough and can save time when adding up your budget items for your transition to working for yourself.

Also, you’ll need to plan for the benefits you’ll lose once you leave your job. For example, If health benefits are something that you’re provided through work, figure out when those will end. It’s often a few months after your last month of employment, but it might be your last day. 

Plan for how long you’ll have health insurance once you’re no longer covered through work benefits.

Do you have to give a minimum amount of notice? I had signed a contract to provide at least a month’s notice in my last job, so that was something I took into account in my escape plan. While they can’t force you to come into work, more benefits are available if you honor your contracts. 

4. Build an Emergency Fund

This has been hinted at, but you’ll want to have at least three months of your base income saved before you venture out on your own. There are no guarantees once you work for yourself, so make sure that you’re safe from having to live in your car. 

In my case, I didn’t feel comfortable just going off of memory alone. I printed off my bank statements from the past year and spent a long time color-coding types of purchases, dividing them into the frequency of payments, and ranked their importance. 

I wanted to know how much I needed per month to survive, how much to be comfortable, and how much I wanted to continue living as I had been while still at my job. How much you save will depend on the sort of emergency fund you want to have prepared. 

how to work for yourself

I also recommend the ranking of importance. It’s good to know the first things that would be cut out if you needed to save some money. For me, it was streaming services and takeout. I cut those things out quickly once I realized they were an unnecessary drain and often a distraction to being productive. 

Another reason this is an excellent practice is that it’ll also inform you how much you want to be making once you’re no longer at your job. 

If you were making way more than you need, it’s going to be a pleasant surprise that you can happily make less. This is an excellent opportunity to determine how much income will make your life more comfortable if you were barely scraping by. 

Keep in mind this isn’t money that you want to spend. Hopefully, once you leave your job and start working for yourself, the income will already be coming in steadily. The only time you spend it is if you find yourself in a tough spot. 

5. Set-Up Passive Income

One of the best things you can do for yourself is to find a way to make passive income. 

In a nutshell, creating passive income is making the sorts of choices with your time and money that will continue to make you more money, even when you’ve finished with the initial project. 

Ways to make passive income include things where you put in the time and effort once, and then that product continues to make you more money. Things that you can sell over and over, like e-books or online courses on the things you’re an expert on, are great ideas. 

I had always wondered if writing a book is a good way to make money passively, so I researched it out. I wrote an online course on the subjects that I earned my MA in. It doesn’t generate enough for me to live off, but it is a consistent income that I no longer have to put time into. I made the initial time investment, and now it covers my rent most months with no extra work. 

The best platform for creating online coursework, in my opinion, is Skillshare. If you have a teachable skill, I highly recommend publishing a course on it here. 

One of the things you can do with your money to make more money is to invest in stocks and index funds. Picking safe places to invest your money, like Microsoft or other blue-chip companies, will usually yield returns of 5-8% a year. 

Putting $1,000 in an index fund for 10 years will turn that money into over $2,000, even if you never add another cent for that whole time. The return is passive income. 

Make good choices, and don’t make investment choices based on what you think is cool. Be boring with your money. Pick safe options and let returns grow steadily will help soften the transition to working for yourself financially.

Also, never, ever take any investment advice from Elon Musk. Just don’t. 

Index funds, digital products like e-books, affiliate marketing, start a youtube, build an app, create an online course, 

6. Give It a Trial Run

You’re so close to being able to walk away from your job. However, before you take the plunge, I highly recommend giving yourself a trial run. The trial run can overlap with saving your emergency funds but shouldn’t coincide with your quitting notice. 

That way, you’re still preparing but have your safety net if things don’t take off right away. With all of the benefits of telecommuting for employers and employees, you can get a feel of what working for yourself will be like.

Admittedly, this is a step I didn’t take myself, but I wish I had. I have always been financially conscious, so I had an emergency fund before deciding to work for myself. So, when I quit after my month’s notice, I had to learn a lot on the fly, which meant a lot of really late nights and early mornings. 

I knew how to write well, but all of the logistics of proposing to clients and setting up contracts was new to me. I was easy prey for scams, and I did fall for one. Luckily, it was under 500 words and only took me a few hours, but there’s work out there that I did for free. 

And, if you set up profiles online, you’ll need to watch for scammers looking to steal your identity by offering job offers that are too good to be true. By following the steps on how to make money on Upwork for beginners, you can avoid some pitfalls.

You’ll make it easier on yourself if you give yourself even a short trial run so that you can avoid learning how to format headers correctly while eating Taco Bell at 3 am. Not that I did that. But you don’t want to either. 

7. Quit Working for the Man

You’ve made it. You have reached Step 7. Now, you can march through your boss’s door, muster up all the courage you have, look him dead in the eye, and very nicely tell them that you are putting in your notice. 

Unless you have really and truly suffered abuse at the hands of your employer, it’s always better to leave on good terms and without theatrics. You never know what could happen in the future, as you may want that reference someday. 

going from employee to self employed

Of course, if you know there’s no way you’ll ever ask them for anything, and they have taken every measure to make you miserable during your time there, it’s your call. 

Personally, my boss was the kind of guy who replied to my emails with grammar corrections and made jabs at my upbringing in “farm life” as though he was a prince and I was a peasant. So, I had a little more fun than I should’ve when I let him know I was leaving and where he could shove that attitude of his. 

It was a little messy, but I regret nothing.

Related Questions:

How should I prevent failing to work for myself?

Some things to consider before leaving your job to work for yourself are the costs of living, taxes, and insurance. Consider if you have enough savings? If you don’t think you can take the leap, maybe you should continue to work for the man until your finances are on trac

How much does it cost to transition to self-employment?

For some people, it’s a couple of hundred bucks to transition to self-employment. Others spend thousands of dollars on their transitions. Consider your situation and create your own budget accordingly.

What is the best way to transition into working for yourself?

There are many different ways an individual can transition into working for themselves. It’s important that you do what’s best for you and your situation. Do you need to transition slowly? Maybe transitioning to self-employment is a better route.

How can I make the transition from full-time to working for myself?

Creating an online course, starting an affiliate marketing business, or building an app are just some of the many ways someone can transition into working for themselves. There are different paths one must take, and it’s important that you discover yours.

Are there any pitfalls in transitioning into self-employment?

Yes. Several pitfalls come with transitioning into working for yourself, such as scams and getting scammed yourself. You also want to be careful not to spend too much money before your finances are on track. Be realistic with your work expectations and transition pace.

Final Thoughts

Following these steps in the way that most makes sense to you is a great way to prepare for the transition into living to your fullest potential, with the freedom that only comes from self-employment. You can transition to working for yourself with these steps.

Remember to bring passion and value into the world with your work, keep your ego in check, and keep your goals humble. If you end up with a Lamborghini after setting up modest goals relative to where you are, the sky’s the limit!