How to Become Self-Employed Even if You?ve Never Been Before

In How Starting Your Own Business Helps You and the Economy we discussed the benefits of self-employment both to you as an individual, and to the overall economy in general. Self-employment not only liberates people from their corporate cubicles, but it also increases the number of available jobs, as the newly self-employed exit the job market.

How to Become Self-Employed Even if You?ve Never Been Before
How to Become Self-Employed Even if You?ve Never Been Before

In this article, I?d like to get into the basic strategies of how to become self-employed even if you?ve never been before. According to the Bureau of Labor Statistics there were 15 million self-employed people in the US workforce, or about 10% of all workers. More recent projections has the number increasing to 42 million by 2020.? It’s a good bet many will be side businesses. You could be one of them.

My guess is that fear is the primary obstacle to people becoming self-employed. They may fear the business will fail, or simply lack the confidence to ever get started. So let?s see if we can overcome those concerns, and help you at least gradually transition into self-employment. As one who has been self-employed for years, I can tell you it?s certifiably worth the effort.

You should be aware from the start that it?s possible to remove much or even most of the risk involved in launching a business. And I?m also of the opinion that in many respects, being self-employed is now more secure than holding a job.

Let?s take it one step at a time. But first let?s start with this?


Please seriously consider self-employment, and not assume this article is directed at younger people. It?s for people of all ages. Self-employment, even on a part-time basis, can be the perfect solution for a lack of sufficient retirement income or savings. Increasingly, non-retiree and retiree alike need to consider developing multiple income sources to deal with the rising cost of living.

Retirees in particular have a big advantage. If you?re on Social Security and/or a pension, you already have a base income source. A part-time business can be the perfect supplement. If you?re on Medicare you?re free from the health insurance dilemma that?s a serious problem for most of the self-employed. And if your children are already emancipated, you only need to support yourself and a spouse if you?re married.

If you?re on your way to retirement, starting a business could provide an extra source of income to save more money or get out of debt before retiring. It can only help.

Just in the past week or so I?ve seen a 70-something woman working as a bagger at a grocery store, a man of at least 70 taking a new job as a mall security guard, a woman in her late 60s delivering heavy packages for a delivery service, and a man I guessed to be in his late 60s selling used cars. (For more examples, read this article.)

I don?t diminish any of these efforts to earn additional income in retirement. But given that so many retirement age people are either delaying retirement, or returning to the workforce after retiring, you owe it to yourself to create a means of earning a living the will better suit your skills, talents, work schedule and desired lifestyle. Self-employment is a way to do that at any age.

On to the strategies?

1. Start a Business Around Your Current Skill Sets

One of the common misconceptions about self-employment is that you need to start a business in something totally new. In my experience, that?s a recipe for failure. Think about the people you know who have bought a franchise or entered into some sort of service business they knew nothing about. If your experience is anything like mine, failure is the common outcome.

You don?t need to go that route, and you shouldn?t even try. Instead, focus on the skill sets you have. With the growth of both the gig economy and contract work, practically any skill can be converted to self-employment.

For example, millions of people who work in administrative capacities think they have no chance of becoming self-employed. But the growth of virtual assistants is showing how wrong that thinking is. Thousands of people with administrative skills are performing fee-based services for multiple clients around the world, many who they?ll never meet.

Make a list of any skills you have. It should include both occupational and personal skills. Next, go on the Internet, and do some research to see how many people are selling those skills directly to either the general public or to businesses. Another good source is Craigslist. People are offering their services for hire there all the time.

From that research, determine which skills you have that you will be most likely to be sold profitably on the open market. Never assume the skills you?re using on your current job can?t be converted to self-employment. After all, your employer is paying you to do that very job. And rest assured, there are thousands of other people selling those same skills for a lot more money than you?re getting paid right now.

2. Favor Businesses that Don?t Require a Big Upfront Investment

There are several reasons for this:

  • Most people don?t have a big chunk of money to spare, at least not to launch a business.
  • Investing a lot of money in a business in no way guarantees its success.
  • Having most or all your money tied up in your business could put you in a desperate situation.
  • You?ll likely need your money to stabilize your personal financial situation, which interestingly increases the chance your business will succeed.
  • Any business venture you go into should rely primarily on your personal skills, and not on a large upfront or continuing injection of funds.

What I?ve discovered over the years is that being liquid is a fundamentally important part of keeping your business going. There will be times when income will be on the lean side, and you?ll need your cash to fall back on. If everything you have is tied up in your business, that door will be closed.

3. Pattern Yourself Off Others in the Same Business

It?s extremely unlikely you?ll come up with a completely unique business idea. Whatever you decide to do, it?s close to 100% certain there are others out there doing it successfully right now. Pattern yourself off those people. It?s part and parcel of that saying ?don?t try to reinvent the wheel?.

Seriously, don?t.

Learn all you can about your competitors. It?s amazing what you can learn even from afar. Peruse their websites. Pose as a potential customer, to call and ask questions. If possible, take on a part-time job or perform contract services for that business. That?ll be the best way to learn the business from the inside.

Don?t concern yourself that any of that is somehow underhanded. You need to learn how to run a brand-new business venture, so you?ll have to put yourself out there.

4. How to Become Self-employed – Ironically – Don?t Quit Your Day Job

If there?s one strategy that?s practically guaranteed to lead to failure, it?s taking ?the plunge?. That?s where you quit your current job, and go full tilt, full-time into a new business. That?s worse than buying stock in a company you know nothing about.

Instead, keep your day job, and run your new venture as a side business. There are several advantages to the strategy:

  • Your job will function as a cash flow, until you build up a reliable cash flow from your business.
  • The job will remove the fear factor. You won?t be sitting around stressing about a lack of income.
  • You?ll need to keep your employer sponsored benefits ? particularly health insurance ? at least until you?re able to afford private coverage.
  • The continued income from your job will give you the staying power you?ll need to make your business a success.
  • You?ll have time and financial breathing room to test different business strategies, without fear of experiencing a complete financial disaster.

Will it be easy to do double duty, building a business on the side while you?re holding a full-time job? Absolutely not! But know this: there is nothing worthwhile that you?ll ever accomplish without making some sort of sacrifice. Juggling two occupations will be a large part of that sacrifice.

5. Don?t Try to Take the World by Storm

If you have any notion of immediate business success, drop it now. If you?ve never been self-employed before, you?re going to start small, and grow your business gradually.

When you think about it logically, that?s the way any of us learn to do anything at all. Think about when you were a child, and you were first learning to read; how quickly did it come to you? You started out reading painfully simple Dick and Jane books, and it was many years before you reached the point where you could read an adult level novel.

The same will be true with your business. When I first started blogging, I didn?t make any money for the first four months. None. In Month #5, I?m made slightly less than $5.

Now to some people, that might signal the end of the line. But I knew it was just the beginning. After all, if I could make $5 online, I can make $50, and then $100. And if I can make $100, I knew I could make $500, or $1,000 and more.

Do you get the point? You?ll have to approach it the same way. If you?re jumping into a brand-new venture, starting small is better than not starting. And perhaps just as important, if your expectations for quick success are too high, it can cause you to give up early. Keeping your expectations in check is critical to business success.

6. Gradually Add New Skills and Product Lines as You Go Forward

When you start your business, you?ll begin with a certain number of skills. Depending on the business, it may even be a single skill. But as you go forward, you?ll need to add new ones.

There?s an important reason for this process. In the organizational world, you may be doing a very specific job. There are likely many different jobs that need to be done, but the size of the organization enables spreading those tasks to several different people.

But when you?re running your own business, your skill set will need to be more diversified. You may have a primary skill, but you?ll need to add others along the way. One of the main reasons a client or customer will hire you is precisely because you bring a more diversified skill set to the table. You?ll need to gradually develop those additional skills.

The more skills you have, and the better you’re able to blend them together into providing your service, the more money you can charge.

The best way to do this on an ongoing basis is to maintain the mindset of a student. You should always be looking to add new skills, grow your current skills, and take on more challenging assignments. At the same time, keep a close eye on what your competitors are doing. That?s the business environment you?re operating in, and you need to know what?s going on.

7. Don?t be Afraid to Make Changes Along the Way

Simply put, if something you?re doing isn?t working, drop it. The business world shift gears quickly, so flexibility will need to be part of your modus operandi.

This is closely related to Number 6 above, but it goes beyond adding new skills. You may need to be prepared to drop certain skills or practices that are not particularly productive. That extends to customers and clients as well. If you have a few who are perpetual problems, you may need to drop them to move forward.

You?ll need to constantly streamline your business. The purpose is to create the optimum work environment, freeing you to do your best work, maintain the most profitable client base, and remove any obstacles to forward progress.

Like anything else in life, you?re operating at maximum efficiency when you?re in ?the zone?. That isn?t to say you?re never going to do anything that will make you uncomfortable. But you do want to minimize those activities.

Once your business is up and running, your mission will be to spend most of your time on the most profitable activities. You’ll need to learn the subtle difference between being busy and being profitable. To be profitable, you?ll need to eliminate as much busy work as possible.

8. ?Follow Your Gut?

Do you know that sense you get deep inside, that ?little voice? you think you?re hearing? It?s real. I don?t know the mechanics of how it works, but it seems our minds have the capability to absorb and assess information we?re not even aware we?re receiving. From that information, are the likely sources hunches and inspirations from deep inside.

Never ignore that little voice. It may be that non-quantifiable quality that tells you either to proceed or to pull back. Now I?m not talking about fear here in the case of pulling back. Fear something you?ll need to get control of early on. It will keep you from ever moving forward. But at the same time, you can get a gut feeling that something isn?t right. It probably isn?t. As long as that?s not coming from a place of fear, it?s something to pay attention to.

This whole concept is counter-intuitive in the organizational world, with its rules, regulations and protocols. In that universe, you can get into trouble following your gut. But in the self-employment realm, you won?t have an organization. The little voice can function as something of your own personal Board of Directors.

9. There WILL be Obstacles ? Face them Head On – That’s REALLY How to Become Self-employed

One of the inherent weaknesses of all human beings is our patented inability to anticipate obstacles. That missing ability causes us to assume perpetually happy outcomes.

If you?ve spent much time in the adult world, you should already know that isn?t realistic. Whenever you try something new, you can and should fully anticipate you?ll have problems. There?s no way to know what those problems will be in advance. But you do need to adopt a mindset that will assume problems are in your future, and more important, to adopt a full willingness to deal with them.

For example, there may be times when your business income will drop. Many will take that as a sign of business failure, and go back to a job. If you do, that will almost certainly be the end of your self-employment ambitions. Instead, always be on the lookout for potentially new sources of income. At a minimum, you can prepare yourself to pursue those sources at some point in the future. That won?t prevent the declining cash flow. But it will give you the ability to deal with it.

10. How to Become Self-employed Secret: Prepare Your Finances Before Going Full-time

It?s unlikely you?ll ever come to a point in life that will be the perfect time to start a business. Like having children or buying a house, there?s really no such thing as the perfect time. Those events take place, and we do our best to make them work.

The same will be true with launching a business, particularly when you?re ready to go full-time. If you have a business idea, start it as a part-time venture. There?s no need to wait until the time is right. But you will need to do your best to be ready for when you quit your job and go full-time with your business.

Naturally, you?re not going to do that until you have a cash flow from your business that at least mostly replaces your job income. Apart from that, you?ll need to prepare your finances for the transition.

While you?re building up your business as a side venture, build up your liquid savings, and pay off as much debt as you can. The dual income should help. It?s an unfortunate fact that businesses are at least as likely to fail due to a poor personal financial condition as they are for problems specific to the business. The stronger you are on a personal financial level, the greater the likelihood your business will succeed.

And don?t stop on the personal financial front after you get your business going on a full-time basis. Maintaining a strong personal financial position is much more important for a self-employed person than it is for someone with a job. That just goes with the territory when you?re self-employed, so you?ll need to embrace it.

Follow these 10 strategies, and you?ll be able to become self-employed even if you?ve never been before.

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17 Responses to How to Become Self-Employed Even if You?ve Never Been Before

  1. I think I can write a college course of what you wrote above. Unlike good advice I started a business I knew nothing about.
    Six years later I have learned how to be a accountant a tax person and we have steadily adjusted our business as time as went on. There are things we did at first, that do not work now. We have adapted new ways of doing the same thing in a better way. Things we didn’t see or know at first.

    I ran this business with zero debt same as my personal life. We didn’t make a dime for three years. We had sales but we spent just as much as we made.
    Gradually over time it started to turn as we figured out how to make a profit and keep it.

    It is very important to keep an income source while you are trying to make a go of it.
    The company we bought are equipment from and still do business with to this day the advertisement for them is just buy this machine and start making big money. Many people buy into this without having a clue and go bankrupt the first year.
    It takes time. Nothing is that simple or everybody would do it.

    Not much else I can add, all good advice above.

  2. Tim, I think the key for most people in what you’ve written is not making any money for the first three years. That would run most people off. That’s why I suggest starting a business with the skills you already have. It’s a much faster path to a positive cash flow. But like you, I had no experience blogging or writing before I started, and had to learn it all along the way. But then for my business I didn’t have a big upfront cash outlay. It still took several months to make meaningful amounts of money. I was willing to take that chance because I had a strong desire to do both (blog and write) and a long history of being a “quick study”. I don’t know if that describes most people. But I think nearly anyone can start a business within their skill set, then gradually expand into other areas. I’m sure you know what I mean, since it sounds like you’ve done much the same.

    I like what you wrote about adjusting as you go forward. That’s something that’s essential to any business at any stage. The business world changes fast and unexpectedly, and you have to adjust. But it’s become the same in the employment world now. No one is safe in their jobs anymore, and no one can count on their jobs staying the same year after year. Those days are gone, whether you’re self-employed or you have a job. We all need to build flexibility into our occupations.

  3. Yes, not making any money the first three years would run a lot of people off. That’s why if you go that route you have to have a cash cushion or another source of income until you learn how to make money.
    I had to learn a whole new skills and I probably ruined 1000.00 dollars worth of product my first year. I also not knowing how to deal with sales tax and federal taxes plus learn accounting it was a lot to learn.
    I also spent at least 2000.00 in replacing parts on the machine that I ruined trying to change them in the first place.
    These are issues if you just have a job your whole life. All this gets taken care of for you.

    I agree it would be much easier to work within what you already know.
    My skill set didn’t transfer to normal everyday life. It could have done something in that field but after twenty five years of that I didn’t want anything to do with enforcing any laws or telling anybody what to do anymore.

    I can say though after surviving the first three years I never want a job again. I can look back and say it was worth it. I would hate having any boss again.

  4. For anyone reading Tim’s comment, the real story here is that Tim DID jump into something completely new, and made it work. That shows it can be done! And if you are in a field that doesn’t readily translate to self-employment, you may need to take on something new. But if you do it as a side venture while you still have your job, you can learn what you need to. Tim did, and so did I. No matter what doubts you have, it CAN be done. And like Tim, I never want another job again.

  5. Yes, I agree, if I can do it anybody can.

    I can tell you though that unless it’s a home based business depending on the State you are in it can become a battle.
    New York State is not friendly to small business at all. Between the rules, insurances, permit’s and everything else it becomes such a battle.

    For instance, Even though we are a closed shop ( No customer’s or employees ) the city wanted us to install a handicap access bathroom. My cost 10,000 dollars. We had to hire a designer and lawyer who spent countless hours going to city hall to have the shop reclassified to a studio.
    Then they wanted us to install a sprinkler system in the shop. Another 8,000 dollars.
    It took a year to have us get reclassified into a work at home studio.

    Because we do have people come here to pick up products my insurance tripled because of liability issues if people fell on ice or tripped over a rug. State required a level of liability that tripled my cost.

    We went through three or four surprise inspections by the insurance agency because they just couldn’t wrap their heads around the fact that we did not employ anybody.

    So my point is, know what state your in. Know the laws and regulations before hand.
    My advice, stay small with limited exposure. Especially in New York State.
    This is one of the worse states to be in, period for anything.

  6. I’m with you on New York Tim. I don’t know why anyone stays there, let alone runs businesses there. What you’re describing is the reason so many businesses are being started as solopreneurs. It’s just one guy or girl running a business from home or subletting office space. Instead of inventory, they drop ship from manufacturers or third party warehouses. Most provide services. Instead of employees, they sub out to contractors. You run on a shoestring and find networks to provide what you can’t or don’t want to do yourself.

    I think if we can get enough self-employed people, we can force the political change that will rollback the hostile attitude governments have toward small businesses (but probably not in NY – too far gone). I hope the projections are right on the number of people self-employed tripling. My guess is the number will grow even faster in the next downturn as jobs evaporate or go part-time. We may see millions juggling a part-time job with a part-time business. But I think the part-time business side will ultimately win out, as small businesses owners go full-time. Whether anyone likes it or not, the strategy in big business right now is to eliminate employees in favor of machines and out-sourcing. I don’t see that stopping. The gig economy is just the most immediate outcome of that shift. But I suspect that’s only temporary.

  7. The only thing that saves this state is NYC. I have zero intention of staying here for good.
    I gave up a long time ago thinking this state will ever turn around.

    The regulations in this state are stifling to anybody trying to run a small business. There’s mounds of paperwork for everything.
    I agree that the sole person business is the way to go in states like these. Really in any state now.

    America is the land of rules and regulations.

  8. Hi Kevin: I agree to start small, on the side, don’t quit your day job line of thinking. As it expands, then go full-time. That’s how my nephew did it, it’s how we did it, and so have many others. My husband started in his garage. Our cars were left out in the snow and ice. When I met him and then moved here to his place, the office was our dining room table, boxes of work to be done lined our hallway and were stacked in the living room. We hired some help, and they started to use my house as their break room. Let’s not get into bathroom issues. That’s when I hit the roof and decided that we needed new space. He wanted more space, I wanted my home back. We leased some space and we’re still there now.

    It’s been a lot of ups and downs. For us, my husband knew the field. Me, clueless. But I had to learn, and learn I did. As I said before, I went from high heels to driving a forklift. I had to learn taxes, spreadsheets, profit and loss (mostly loss in the beginning), scheduling, new software programs, on and on. After we moved to our new space, we didn’t make any profit either. We made enough to pay the bills and a small salary for both of us and our employees. Things have improved dramatically. All this is to say it’s not always easy, but more often than not, always worth it. We hope to work as long as we can, and we’ll most likely be cutting back soon, as we’re in our 60’s. But we have the option to do that. At least it’s not all or nothing.

  9. Your path seems typical Bev, but you made it to success, and did it by learning from the ground up. I think we often underestimate what we can learn and do. But it’s mostly a matter of “baptism by fire” – you do it and you learn. We had a similar situation. I started out running my business out of our bedroom. That went on for six years, and when we moved to a larger space in NH I finally had an office, and my wife had “our bedroom back”. But those sacrifices pave the way forward.

    I hope like me, you and your husband appreciate the options you’ve created for yourselves late in life. I see soooo many 60- and 70-somethings taking jobs I’d never want to have to take, and count my blessings realizing I don’t have to. Creating options is so under-rated. Even if you never exercise some of them, just knowing you have them is so liberating.

  10. Especially in this city. City Hall has an unspoken rule that they do not deal with any citizen disputes unless you are represented by a lawyer.

    So if I wanted to get something changed with my property you have to have legal representation or know a councilmen who can go to bat for you.
    That also comes with strings in the form of donations.

    I have recently seen where this city will fly a drone over your property to look at the roof. If they deem it unsafe then they slap a violation on you and a 90 day notice to change it.

    I know I’m getting off topic but if we anywhere think we live in a free country your solely mistaken.

  11. Same with us Bev. I started in my basement of my last house. it was tough. The basement was 150 years old and would flood every time it rained. 2 inches of water. I had everything off the floor on shelves.

    I think back on that and wonder how I made it this far.

  12. Tim the road usually isnt’t pretty. I started out working for peanuts, but I knew I couldn’t get top dollar as a newcomer so I had to deal with it for as long as necessary. I was using cheap and secondhand equipment and supplies to keep costs down, while working contract jobs for more serious money. But eventually it all came together.

  13. I had to keep a pump with a hose running to my stationary tub. I had to keep the windows open to keep it from getting rancid down there.
    I had a bird fly into my window once and feathers landing all over my 40,000 dollar equipment.
    So no, your right. It isn’t pretty. We made it though. There were plenty of days we wanted to give up. If both of us wanted to quit at the same time we would have.
    One of us would always keep the other one going.

  14. If there’s one thing I’ve learned it’s that life doesn’t usually move in straight lines. It usually zig-zags. You have to be ready for that at all times, but especially when you start a business. It’s one of those ventures where the launch phase can be messy, but once you’re “airborne”, you know you’ve arrived in the right place.

  15. I know a lot of people who have small businesses. It’s a normal thing to deal with all the issues at the start.
    We still deal with issues all the time. It’s still just part of the deal.

    I hope I am done making other people money in life. That really was my motivation.
    My bosses would go off to there country house for the weekend while I worked. I figured if I had to work then it’s for me.

  16. Love your articles when the have to do w empty nesters, healthcare and/or self employment! Stay calm and keep blogging…

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