How To Become Your Own Boss

By Indeed Editorial Team

February 26, 2021

Being your own boss means working for yourself instead of an employer and having more control and flexibility over your work activities. To be your own employer, you need to own and run a business and make all the decisions for it. Whether you wish to make a living from your passion or monetize your expertise, understanding the process of starting a business can help you reach your objective. In this article, we explain how to start a business and become your own boss.

Related: Best Self-Employed Jobs

How to become your own boss

Follow these steps to become your own boss:

1. Decide what you want to do

You may already have an idea for your business. If you don't know yet what you want to do, there are plenty of ways to help you make a decision. Here are three directions you can take:

  • Solve a problem. The best business ideas are those that solve problems. You can find solutions for problems that you or other people have. You can also identify problems that will exist in the future, for example, a future lack of natural resources that will need replacement. You can also think of ways to make people's lives easier or help them save money.

  • Do what you know. Another thing you can do is turn your hobby into a professional activity. If you are currently employed or an expert in a specific area, you can use the skills you already have and propose them as services.

  • Be inspired by others. If there are businesses that interest you, learn about their work and improve it with your personal touch. For ideas to manufacture products, you can try to find a new way to use old inventions.

Related: How To Find Your Passion

2. Validate your idea and find your market

Once you have an idea, determine if it is viable by looking at the market you want to target. You can start doing what you like on a small scale to test your ideas. Before you launch your business, it is essential to ensure there is a demand for what you want to offer by performing some market research. Use these tips to find your market:

  • Determine the profile of your ideal customer. Begin by asking yourself who would buy your product or use your services. Write down the age, gender, education, location and social background of these ideal clients. Also, determine where they shop and if they use the internet. With this information, you can format your message and design branding to interest them.

  • Analyze your competitors. Identify other businesses that provide similar products or services by visiting their workplaces or websites. You can get in contact with them to gather information on the market. Consider how you can do better than them or if there is a segment on the market they don't cover. Maybe you can exploit this niche where your competitors don't answer customers' needs.

  • Conduct a customer survey. You can ask people whose profiles correspond to your ideal client about their needs and expectations, either face-to-face or online through your social media page and other available tools. Their answers will help determine if people are ready to buy what you have to offer and help you estimate the price they are willing to pay.

  • Determine the size of your market and the possible revenue. You can run a search on the internet to find reports on the industry you want to enter and how much revenue companies in this field generate. This information will help you to estimate the income you can make with your business.

3. Analyze your strengths and weaknesses

Ask yourself what can make you successful as your own boss. It might help you to perform a SWOT analysis on yourself at this stage. Knowing your strengths and weaknesses will tell you where to focus your energy and how to plan for the future.

Evaluate your abilities and assess your level of self-discipline and time management skills. When you gather the answers to this self-analysis, remember no circumstances should stop you from becoming your own boss. The objective is to be realistic, and consider all aspects of your current situation so you can start to look for solutions and organize for your new life.

Related: SWOT Analysis Guide (With Examples)

4. Plan the transition

If you are currently working for someone else, you need to consider how you are going to make the transition. You can either start your self-employed activity part-time and grow slowly to the role of the business owner, or quit and start immediately.

The advantage of transitioning slowly is that your former job provides income while you are launching your business. The disadvantage is that you might rely on the security of your day job and not invest yourself fully in your new business.

It is essential to plan your exit from your current situation. You should try to prepare and put yourself in a position to be successful before you leave your job. Actions you can take include:

  • Assessing your living costs: Calculate your personal expenses, such as rent, gas, groceries and utilities.

  • Saving money: Reduce your expenses as much as possible to increase your savings.

  • Getting more training: If you are currently working as an employee, try to learn as much as you can in the field that will serve your self-employed activity.

Related: How to Quit a Job the Right Way

5. Assess your business' financial needs

You need to evaluate the amount of money necessary to launch your business. List the basics, like rent for a shop or warehouse and purchasing merchandise you wish to sell, but also the eventual cost of special technologies if your idea requires those.

The amount of money you need to start your business depends on the kind of business you want to start. Here are some cases to consider:

  • Selling or producing a service: If you plan to sell or deliver the intangible, like freelancing and providing consulting services, your startup costs may be minimal. You may need startup capital to pay for branding material like a website, a logo, business cards and hiring an accountant.

  • Selling or producing a physical product: In this case, your starting capital should cover the purchase of inventory; the rent for retail, office space or a warehouse; and potentially the hiring costs of key roles.

  • Inventing a product or new method requires you to consider the cost of a patent to protect your idea as well as all other associated costs.

6. Learn about running a business

To increase your knowledge of business management, read books on the subject and get advice from professionals. You can consult a certified accountant and an attorney to guide you in your startup phase. There are small business development centers that provide classes and help to people who want to start a business. You can turn to those organizations to learn more about running a business and finding financing opportunities.

7. Pick your business name

When you choose a name for your business, try to find something that will suit your activity in the long term. To verify it is not taken yet, you can search online. Once you decide on an original name, make sure you buy a corresponding domain for your future website.

8. Register your business and take the final step

To make your business official, register your business name and get a federal tax identification number or EIN. The IRS can guide you through the process. You must also establish its structure. You can choose between an LLC, a partnership or a corporation. If you are the only one running your business, you will be a sole proprietor.

Create a website and print business cards to promote your new activity. Find a location or run your business from home, and get ready to be your own boss.

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