7 Financial Strategies for Transitioning from Salaried to Solo

1. Continue to draw a (reduced) salary
Leaving your current employment in order to develop your new business may look like the only option, based on an assumption that you won’t get approval for reducing your hours.
2. Develop another income stream
If you need to leave your present employment, is there a skill in your toolbag that you can resuscitate and put to work without a significant expenditure of time or energy? Is moonlighting or freelance work an option? Virtual e-lancing websites (such as eWork.com, Guru.com, and e-lance.com) may be worth looking into for short-term professional services opportunities.


3. Reduce expenses
Apart from fixed expenses - mortgage, taxes, insurance, etc. –are discretionary expenses that make up the larger part of budgets. Doing a careful analysis of these expenses and choosing what you can forego for awhile can often save thousands per year.
Carefully analyzing hidden expenses – credit card interest rates, bank charges, late fees, auto debits, phone plans – or “lost money” from low interest rates on savings may generate several thousand more per year.


4. Borrow
It isn’t necessary to wait to borrow for start-up costs until you have a well-documented idea to submit for a business loan. Refinancing a home or taking a line of credit are relatively low-cost ways of generating capital. Depending on your credit rating, you can also get time-limited low-interest loans from credit card companies.
If you choose this option, applying for loans or refinancing packages while you’re still employed is strongly advised. Your rating as a borrower declines quickly once the regular paychecks stop.



5. Identify your niche.
Think about the services you’re uniquely qualified to provide, as well as the ones you most enjoy providing. Be specific! Write them down! Then think about what group of people would get benefit from those services and have the ability to pay for them. Again, be specific: age, where they congregate, habits and values, how they define the problem your services are going to solve.

6. Create your marketing plan.
Don’t be intimidated by the term “marketing plan”. While what you need from a marketing plan will get more sophisticated as your business develops, for now it simply means answering the question,

7. Manage fear!
For most people, anything involving money involves some level of fear. It’s important to acknowledge to yourself and to others that you are taking a risk, and you’ve decided it’s a risk you want to take. So consider the fear natural, and find ways to manage it.
Getting support from people who believe in you and in what you’re embarking on is #1 in fear-management tactics.