Tips for Transitioning from Employee to Business Owner

Whether you’ve perfected your drop ship methods and are ready to run your business full-time or have finally come up with the perfect idea for a startup and want to go full steam ahead, transitioning from an employee to a business owner and entrepreneur is an equally exciting and scary leap. According to a survey, 62 percent of Americans want to be their own bosses and own their own businesses but are deterred by certain aspects of business ownership including finances, marketing and advertising, and sales. Still, about a half of would-be entrepreneurs responding to another survey reported taking steps toward starting their own business within 12 months of the original survey question asking whether or not they would start their own business.

If you feel like you’re ready to take the steps towards becoming a business owner and acting as your own boss, but are feeling a little hesitant, the following tips can help you better make that transition and start fulfilling your business ownership dreams.

1.  Get Out of the Flexible Hours Mindset

A lot of people think that when they break free of their 9-to-5 and become their own boss that they’ll have more flexibility and freedom than they could imagine. Although it’s true that you’ll be calling the shots and may have some flexibility where you didn’t before, running a business takes a lot of work and often involves long hours and more time than your original day job did. Getting out of the flexible hours mindset and planning on working late nights and early mornings is a good idea if you’re planning to make the transition.

2.  Plan on Things Being Tight

Many people know that starting a business costs money and doesn’t always yield profits right away, but not all entrepreneurs are prepared for just how tight things can be when transitioning from employee to business owner. Planning on being on a strict budget when it comes to both your personal and business expenses is a good idea if you’re planning on making the transition to being your own boss.

3.  Create and Stick to a Schedule Every Day

As an employee, you have a regular schedule that you stick to, but when you become your own boss, things may not be quite as structured as they were. If you want to get done everything that you need to, though, setting a daily schedule and sticking to it is important. Routines offer a lot of benefits, and if you create one for yourself as a business owner, you’ll likely do better and feel better about what you’re able to get done.

4.  Plan on Doing Things Yourself

As an employee, there’s a whole team of people available to support you and take on different projects and tasks so that you can better fulfill your role. As a business owner, though, you have to create that team of people yourself, and you may not always have the time or the funds to do so, especially early on. That means that a lot of the different responsibilities that would normally be handled by other professionals will fall to you and you’ll be doing a lot of the work yourself. It’s not necessarily a bad thing, but it’s not something all new business owners think about, so planning on it can help you get a step ahead and make a smoother transition.

5.  Build Up Your Network

Your network is extremely important. The people in it can act as mentors, can be a means for an in, or can connect you with suppliers or other vendors. Building up your network and maintaining good relationships with the people in it will make the transition from employee to business owner a lot smoother and easier than it might otherwise be.

6.  Save as Much as You Can Beforehand

Cashflow is one of the biggest issues that new businesses have to deal with and is one of the leading causes of startup failure—about 29 percent of startups run out of cash. Whether due to poor spending habits or not having enough capital, running out of cash is something that can bring your business ownership to an end. By saving up as much as possible beforehand and putting it away, you can help yourself avoid running out of cash, especially early on, and give your business the fighting chance it deserves.

7.  Have a Backup Plan for Getting Cash

If you haven’t been able to save up enough cash or are running out of the funding that you do have, then it’s important to have a backup plan to get the cash that you need. Whether that be to apply for a loan, bring on an investor, or use business credit cards, really looking into all your options and deciding what you’ll do in case you need money beforehand is a good idea if you want to make the transition to business owner smoother.

8.  Add “No” Back into Your Vocabulary

As an employee, your job is to say yes. Your job is to do what you can to get things done and make your boss happy. As a boss, your job is to keep things in check and manage and balance everything as best you can. Whether you are talking to employees or yourself, learning that it’s okay and appropriate to say no when necessary will make the transition to being your own boss much easier.

9.  Work on Self-Improvement

As a business owner, you are a major part of your business, and it will be limited by the limits that you have. By working on self-improvement—whether that be attending seminars, reading books, taking classes, or all of the above—you’ll be able to give your business a leg up and keep it moving forward, even before it gets started.

10.  Transition Slowly

The transition from employee to a business owner is not always easy and can be scary for some. If you’re not sure you’re ready for a full transition, transitioning slowly by doing it part-time or just in the evenings to get it running beforehand is a good idea. You don’t have to take that leap all the way if you’re not ready.

When do you plan to transition from employee to business owner?