Let’s face it, the elephant in the room when someone decides to jump from full-time employed to a freelancer or business owner is ‘how can they afford to do it?’ and I’ve heard this touted as an excuse to not follow an entrepreneurial path more times than I can count. Well, let’s take this elephant and talk about it for a second because it really isn’t as mysterious as many people are led to believe.
How much do you need?
So how much do you need? Well, how long is a piece of string? For me, I didn’t really need an awful lot to kickstart my freelance career, in fact, I took the leap with no savings at all and was able to do so because I already had a small client base to pay my basic bills. Looking back, perhaps it was a little irresponsible to leave without a little savings buffer, just in case things had of turned south, but in the spirit of ‘you only live once’ I took the leap and it worked out for me and I have no regrets.
Now I’m not saying that the same case can be made for any individual. I’m fortunate enough to have very few overheads, minimal start-up costs and no dependents and so I could afford to take a quite dramatic pay-cut and to cut back on my expenses until my business got off the ground. A parent, someone with a mortgage, an individual without any sort of client base or someone whose business requires more financial investment would need to think twice before jumping with no safety net.
So how can you fund the switch?
If you can’t take the risk of jumping without a savings safety net then it’s not time to throw in the towel just yet, because there are some things you can still do.
- Stay at your job and make those savings
First and foremost, if you can wait it out, then it’s worth trying to save up your buffer while remaining at your current job. This may involve living below your means for six months, a year or even longer depending on how much you need to save, but this really is the only way to avoid a loan whilst setting yourself up for your future.
- Grow your side hustle
There’s nothing stopping you from sowing the seeds for your business while at your current job – that’s what I did. I began writing for clients in my free time, ultimately building up the small customer base that enabled me to leave my job knowing that I would have some money coming in. Do as much as you can whilst still in full-time employment, only making the switch when you can afford to live off your side hustle income alone.
- Take out a loan
If you really can’t make the savings at your current job and can’t commit the time you need to grow your business as a side hustle, then there’s always the option to take out a carefully considered loan to fund the initial start-up of your business. Many businesses are founded on borrowed money, it’s just even more important to ensure that you have a way to make the repayments when they are due. Don’t worry about credit scores, there are guarantor loan companies like Buddy Loans who can help you get your feet off the ground – just remember, be careful, be sensible and don’t borrow more than you can afford to repay.
But it’s scary
From a very young age, we are conditioned to seek out stability and to aspire to work in regular employment. Starting a business or going freelance goes against this norm and feels somewhat unnatural to many of us. It’s completely understandable to feel some degree of fear when making the shift from a 9-5 to an irregular income, but the entrepreneurial lifestyle also comes with so many rewards that are worth it if you’re willing to work for them. If you’ve thought long and hard about what you want to achieve and the only thing holding you back is fear, then you need to step out of that fear bubble. Don’t burn any bridges, you can always go back to full-time employment later, you only have one life on this earth, do you want to look back on it and to wonder ‘what if?’