As the great wave of resignations strikes the US corporate level at full force, more and more Americans are willing to grab themselves by the bootstraps and create their own healthy work atmosphere.
In October of 2019, the Bureau of Labor Statistics reported that around 9.5 million non-corporate self-employed individuals were residing in the states.
However, as the pandemic prolonged for far more than anyone expected, these numbers skyrocketed, increasing by over 2 million in slightly under 5 months, culminating in October 2021’s report, where stats show that Americans have applied for nearly 5 million federal tax ID numbers during last month.
This greatly outnumbers the 2020s 4.3 million applications, and 2019’s 3.5 million, showing a steady growth rate.
However, becoming your own boss is no easy task, as rushing in without proper preparation and insufficient funding can cause many to feel just as exhausted and overworked as they did at their regular 9-5 that they chose to quit for that exact reason.
Founder of Fola Financial in New York, Sheneya Wilson claims that getting informed about the ins and outs of running a private business is one of the most important steps, exclaiming that the only right move is the one that was done the right way.
How to manage your little money machine
One important step is creating a simple and clear business plan, one that would explain who the audience of your service/business is and how much exactly are you willing to charge for your service/product.
With a certain amount of risk coming along with every private business, it is cardinal to set aside some finances, based on how fast you think your business will become profitable, with financial planner Kevin Lao stating that he first saved up 12 months worth of living and 3 months os business expenses, before diving into starting his own company.
A viable strategy to plan out finances is to set an income goal each month and then pace your work accordingly, making sure all expenses are covered so you can at least break even at the start.
With small business owners typically suffering from the highest overall tax rates, it is important to separate private life and business, preferably with a separate bank account, allowing for easier financial management done either by you or a paid accountant.
But, no one is perfect, and outside help should always be welcome, so always keep a couple of professional accountants or tax preparers on speed dial in case filing at the end of the fiscal year becomes too messy.
Finally, announcing your leap into a solo business might help you build a community that shares your interests, which could possibly bring business opportunities in the future.
As the name states, it is a solo business, but this doesn’t and shouldn’t stop anyone from keeping in touch with other freelancers and small business owners in their network, as everyone needs company, and quitting a boring 9 to 5 just to create your own is not the way to go.