How To Transition From Freelancer To Small Business
Freelancers and entrepreneurs share many of the same skills and qualities. Both are passionate and motivated, and are no strangers to hard work. An entrepreneur is defined as “a person who sets up a business or businesses, taking on financial risks in the hope of profit”, and this describes a freelancer very well, too. But if you have your mind set on something bigger, making the move from freelancer to small business owner is a big step, and it comes with its own set of challenges.
Acquiring New Skills
If you’re growing into a small business, it’s likely that you will be hiring a new team. Even if you only employ one or two people, this opens up a whole new world of human resources that you previously wouldn’t have experienced. It may be that you need to hire an external HR agency to deal with hiring, firing, disciplinaries, and so on, but if you don’t, you’ll need to learn all about this yourself. Hiring employees also means your finances will change – you’ll have to start thinking about payroll, and because of this your profits will take a hit, too. You’ll also need to consider your legal obligations as an employer and business, such as insurance, pensions, minimum wage, and more.
You should also consider whether your offering will change once you start your business, to make it more profitable and scalable. Will you provide more services, and will you do this yourself or need an extra pair of hands to supply these new services? Before you hire someone, think about the direction you want your business to take and the roles you need to fill. If you don’t have any employees, you are essentially still a freelancer – so hiring your first member of staff is an important step.
Consider All Your Options
If you want to start a small business because you have too much work to do yourself, you may also want to consider approaching another freelancer first. By passing on some of your work to someone else, you can take a cut of the profit while they keep the rest. This can take the pressure off you, and if you have your mind set on starting a business, it can free up time for you to plan your strategy.
You could also consider getting a co-founder for your business. As a freelancer you may be used to working alone, but having a helping hand to make big decisions or fill a skills gap could be the key to your success. If you know someone who will have the same goals and ambitions in mind and who you can share responsibility with fairly, then you could make a great team.
Changing Your Business Plan
Your business plan can help you with all of this, so if you already have one it may be a good idea to make a copy of it and work from that, changing what you need to in order to plan your new business. You’ll need to consider what new skills you need, or how you will outsource or hire for these skills and how it will affect your finances and long-term strategy.
If you don’t yet have a business plan, it’s a good idea to create one. Your business plan should include information about what you are currently doing as a freelancer, your current and past finance information, and the goals for your new business. You should also consider your competition, strengths and weaknesses, the roadblocks you may face and how you plan to overcome them. You could find out more about this by talking to people who have already made the transition – they may also have advice on the tools you could use to make certain aspects of your business easier, such as HR and finance.
If you would like any help with writing a business plan, whether you’re a freelancer or running a small business, we’d love to hear from you. Get in touch with cbm using the contact form on the right, or call 01604 420 420.