When you’re going out on your own, there is a lot of prep work you’ll need to have in place—another reason to not go flying out of employment, guns a-blazing. You need backup, you need a plan, and you need a formal structure.
[In case you’ve missed previous posts in this series, we’re talking about how to quit your job and go it alone. Part one is here; part two is here.]
In terms of backup: I hear often that a business owner should always have six months’ cost of living funds stashed in an account somewhere, in case of a rainy day (or, hello: recession) comes along. I personally would advise keeping ten to twelve months of costs in reserve; because you never know how long it’ll be before things pick up.
In the current recession, our smaller clients can’t get credit. That means invoices suddenly go from being paid net-30 to net-90. Last year, some clients couldn’t pay us for up to four months after the work was done.
Before you quit, you need to know essentially what you’re going to do. It’s not going to serve your future well if you quit in a huff, then go straight from that emotional turmoil to a place where you should be calmly looking into your talent set. Know what field of design you’re going to want to focus on. Don’t use this as an opportunity to try something entirely new, unless you’re completely okay with failing and working with that failure. It’s entirely possible.
Protect yourself by creating the simplest of formal separations between your work and life. Start a checking account as a sole proprietorship so you can keep your business expenses separate from your personal ones. Once you’re a little more stable, I would advise incorporating to solidify your formal structure and further separate your personal expenses. Incorporation, if you do it by yourself, is a huge pain, and byzantine. Find a local accountant or lawyer who who’ll do it for you. The cost is usually about a $1000, and well worth it.
Invest in your initial advertising and branding with a very simple structure. You need to make an impression, clearly and quickly. Thus, focus on things you can do easily and quickly. If you’re good at identities, make a Facebook ad focused on small business owners. If you want to do day-to-day typesetting on a retainer basis, focus your efforts on people who have lots of paperwork to send to viewers. Spend the money to get a decent set of business cards and a basic identity system. Consistency is a key message, and conceptually matching communication items will emphasize that you can be trusted to make decisions which make sense in concert.
For those who have already done all this, what’s your best planning advice? Tell me in the comments.