“I read your article last week outlining all the institutions that self-employed persons need to visit when starting out. I’m trying to decide if I should leave my job and start my own business with an idea that I’m convinced will work. What advice can you give someone who is thinking about becoming self-employed?”

The decision to become your own boss is not always an easy one. If you’re thinking of leaving your regular nine-to-five job to strike out on your own, you’ll be faced with feelings of uncertainty about your plan of action, and fear about an unknown financial future.

After changing my job situation from employee to ‘self-generated-income earner’ last year, I have learnt many lessons about becoming an entrepreneur. Some have come the hard way by learning from my mistakes, but valuable knowledge has also been gained by observing and mirroring the practices of profitable business owners.

Here are some of priceless tips I’ve learned about successful self-employment:

Find a business idea doing what you love

It’s best to look for a business opportunity doing something you’re passionate about, or one in which you have a special talent. Self-employment will require you working harder than when you had a regular job, so you should truly enjoy it. I’ve learned that it’s easier to survive the inevitable challenges when you’re fully committed to your business.

Make sure your idea is viable

Yes, you love what you do, but will anyone pay you for it? You must create a way to make money from your passion if you’re going to survive self-employment. It’s best to document your ideas in a basic business plan that will help you to see if your idea is really workable before you jump in. I’ve learned that you can waste a lot of time and money figuring out how you’re going to generate income without a written plan of action.

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Don’t start out broke

Building a business requires capital, so don’t start without knowing where the money is coming from. A business budget will help you to know how much it will take to pay your bills. If possible, start your venture while you’re still employed, so that you’re not dependent on the business income for your personal expenses. Save up over time, or get assistance from friends and family to amass working capital. I’ve learned that a good business idea will die from lack of funding.

Be creative in getting customers

Without customers, your business is finished before it even starts. If you’re a new kid on the block, you have to be innovative in getting people to know you exist. Don’t be afraid to give away your service or product to people or organizations that can bring more business. Try to get recognized in the media as an expert in your field, and network with the players in your industry. I’ve learned that you have to use every possible opportunity to market your business.

Seek professional guidance

If you want to be successful, you have to have a great lawyer, an experienced accountant, a supportive banker and a practical business advisor. Stick to what you know, and let the experts guide you about setting up your business the right way. Don’t try to draft up your own contracts, or advise yourself about tax planning. You might think you can’t afford expert advice, but I’ve learned that you’ll just end up paying more for your mistakes in the long run.

Persistence pays

When you’re newly self-employed you can’t afford to take ‘no’ personally. It will take time for people to know what you’re about, so expect to have some rough going initially. As long as your venture is solid, you must develop tunnel vision about your dream and persevere in carrying out the steps in your business plan. I’ve learned that you have to have thick skin and strong self-confidence to keep going until you succeed.

Always provide exceptional service

Get your act right from the start. First impressions not only last, they can make or break you. To win their confidence and get repeat business, you have to wow your customers and provide service beyond expectations. On the other hand, messing up when you get one chance to prove yourself can be a death sentence to your fledging enterprise. I’ve learned that word-of-mouth is a powerful tool, so it’s important to ensure you create a positive buzz about your business.

Start out on the right legal foot

The last thing you need as a new business owner is to be in the bad books with the authorities. There are certain legal and tax responsibilities that accompany self-employment, so make an effort to find out what they are. Follow the steps outlined last week to register with the respective government agencies. Next week we’ll look at the tax obligations for self-employed persons. I’ve learned that you’re better off paying what you owe than worrying about the tax man.

In future columns I’ll share more of the lessons I’ve learned about successful self-employment.

Copyright © 2008 Cherryl Hanson Simpson. No reproduction without written consent.

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Originally published in The Daily Observer, August 28, 2008

Cherryl is a financial columnist, consultant and coach. See more of her work at www.financiallyfreenetwork.com and www.financiallysmartonline.com. Contact Cherry