Over the past 22 years, the number of small- and medium-sized enterprises (or SMEs) in the United Kingdom has increased by 60%. More than 810,000 new businesses launched in 2021 alone –– a record high for the country. And though traditional 9-to-5 working models remain popular, these numbers also speak to the fact that British workers today have become keen on exploring other options for generating income –– namely, business ownership.
That said, becoming an entrepreneur is far from easy. Without employers, entrepreneurs need to rely on their own initiative and know-how to thrive. And without a guaranteed salary every month, the consequences of failing can be high. To succeed, meanwhile, requires sufficient preparation across a number of areas, including finance, business strategy, skill development and networking.
Below, we’ll cover a few specific things you need to do before transitioning from employee to entrepreneur.
Build Savings
As mentioned, one thing entrepreneurs have to sacrifice when starting a business is the comfort of a stable monthly salary. As a business owner, you might see your revenue change from one month to the next; finances might be especially rocky when you’re just starting out, in particular if you haven’t yet acquired a steady customer base.
If you plan on quitting your job to become an entrepreneur, you should first make sure to accumulate and set aside enough savings to support a comfortable lifestyle. To gauge how big your cash reserves need to be, track your current living expenses. Then, make a budget based on how much money you spend each month. Ideally, you should save about three to six months' worth of living expenses. If you want additional security, push for 12-24 months’ worth.
Come Up With A Business Plan
It’s important not to go into business without first assessing whether your ideas are feasible. To give yourself a clearer picture of how your business will operate, write up a business plan. This should be a written document that describes your business’s goals, strategies, and financial forecasts. Clarifying your business idea through a business plan may also help you secure better finance options, such as investments or bank loans (given that any lenders will want to see a concrete plan and projections).
Some of the most important parts of your business plan include your product description, market analysis, marketing and sales strategies, and financial forecasts. Your product description explains what your product or service is. Your market analysis will assess the current market for your product, asking and answering questions about current demand and competition. The marketing and sales portion covers the strategies you will use to sell your product, and your financial forecast should predict as accurately as possible how much money the business will make.
Develop Necessary Skills
When you’re just starting out as an entrepreneur, you might have to wear a lot of different hats: You’re the visionary, the employee manager, and the chief salesperson all at once. To ensure success as an entrepreneur then, you need to develop essential skills such as leadership, creativity, communication, and time management.
Creativity and leadership in particular are some of the most important skills in entrepreneurship. By honing your creative leadership skills, you will become more adept at conceptualising new business ideas. Incorporating creativity in your leadership will also help you create work environments within which the creativity of others flourishes. Notably, this sets your business up such that some of your core skills will continue to have a wide-ranging impact even when you reach the point at which things like sales and employee management aren’t your direct responsibilities; you’ll have established a creative tone that will help managers and employees alike to thrive as the company grows.
Network
For any business to succeed, it needs loyal customers. You might struggle in this department when you’re just starting out (particularly if you’re more “visionary” and less “businessperson”). Fortunately, it is easier than ever to build a decent customer base with help from online tools. Use social media sites like LinkedIn to connect with like-minded professionals; create content for Instagram and TikTok to put your product on the radar of modern audiences. There are countless ways to expand reach and attract consumers online, even if you’re not inherently proficient in networking or building connections.
Abandoning the 9-to-5 to start your own business is a huge challenge, and can be a daunting proposition. But by staying prepared and approaching entrepreneurism with care, you can protect yourself financially and ensure that your new venture gets off to a good start.
