Another reader request today, Jenn wants to know how to go from full-time outside employment to full-time work from home. This is a huge life change. It requires a lot of planning, especially if your family depends upon your current income. How do you get there?
Starting out part-time is often advisable. Granted, some of us do jump headfirst from full-time employment to working full-time from home. However, this too is often done with a lot of foresight and planning. In most cases, we didn’t just wake up one morning with no plan and no money in the bank and quit our jobs. There are several aspects that need covered to get you started on the right foot:
Finances are likely your biggest concern. You need to be able to replace your current income. Working your new business part-time will allow you to start saving for your big move. Experts recommend having six months’ worth of income in savings before making the transition. This will allow you plenty of time to fill your schedule without taking crappy clients out of desperation. The standard recommendation for when it is safe to quit your day job seems to be when your new business is making 30% of your current income.
Business Plans are a drag. I will be the first to admit that. However, they can also give you a darn good wake-up call in the event you really are not ready to make the transition to full-time income from home. Take the time to fill one out. The Small Business Association has a free business plan template available.
Protecting Yourself and your family is imperative. There may be local regulations and licensing requirements that apply to your new business. Depending upon the type of business, you may need special insurance. It is often advisable to form a legal business entity to protect your personal assets from possible lawsuits, financial problems, etc. Speaking of lawsuits, make sure you have a contract ready for that first client. If you are the family member carrying the health insurance at this point, this is another thing to plan for in order to protect your family’s financial future.
Start your part-time business as you plan to run your full-time business – I.e. charge a full rate. Many part-timers start out willing to accept a far lower wage because they don’t necessarily need it at this point. That is a mistake. You want your transition into full-time to be as smooth as possible. You don’t want to spend it trying to break a huge rate increase to existing clients or starting over from Day One. This income should be stashed into that Six Month Savings Plan mentioned before. Do not become reliant on this income if you want to eventually break into full-time work from home. You will never get there if you do.
When you start your part-time home business, seek out long-term clients/customers from the get-go. It is much easier to make it full-time if your business does not experience a lot of client turnover. Find your “bread and butter” before you start looking for “fillers.”
Starting out part-time will also give your family and friends the opportunity to see that you are serious about your business venture. It may allow you the opportunity to find that out as well. This will give everyone involved the chance to get comfortable with how working at home will impact your daily lifestyles.
Have you transitioned from full-time employment to full-time income from home? Was it an easy switch? Do you have any words of advice for Jenn?