Over 223 thousand residents in Singapore consider themselves self-employed with more increasing every day. Structural changes in today’s economy is making the move possible. Whether you are making the leap to self-employment from your current employer or looking to start something on your own straight out of university graduation, here are some key things to do before you make the plunge.
While being your own boss means you can throw your CV in the rubbish bin, you would be inadequately prepared for the real challenges of running your own business if you do not ask yourself these 3 key introspective questions.
Are you able to work alone?
Especially in the early days when things are tough, you will be constantly second guessing whether you are doing the right thing or not.
Do you offer something where there is a demand?
Supply and demand are in balance even in the self-employment market. You need to assess whether you have something to offer with your self-employed occupation. It never hurts to sharpen your own skill set by spending a few years at someone else’s small business so you gain the confidence and experience that’s needed.
Can you handle rejection?
Having thick skin is crucial as you will face rejection, whether you are raising funds from investors or selling to customers. Turn every rejection into an opportunity to gather feedback and learn more about how you can improve.
Prepare for a rainy day
Becoming self-employed means you abandon the comfort of a steady paycheck from an employer. While everyone hopes that things go according to plan, real business work is often volatile with ups and downs in cash flow coming into your pocket. Be sure to calculate a realistic budget for yourself, that covers both your personal expenditures as well as business ones. Do not cut your budget too drastically, otherwise, your personal satisfaction and quality of life may deteriorate if you go from eating out to making ramen for yourself every meal.
Look to set aside a minimum of 6 months of cash before you even consider moving to self-employment.
Do your homework
You need to understand everything when you are on your own, from business licenses to tax filings.
At a bare minimum, understand how business taxes work. IRAS offers a start-up kit for new sole-proprietorship and partnerships.
If you are a foreigner, be extra careful not to flout the rules on manpower regulations. Freelance work is only applicable to Singaporeans and Singapore permanent residents. If you wish to set up something on your own, you will need to apply for an Entrepass or set up a local company (requires at least one director who is an ordinary resident of Singapore).
Being your own boss is extremely rewarding.Taking the first step is always the hardest part but rest assured you’re in good company. This is the reason why the number of people seeking self-employment keeps increasing.
So start now by interviewing yourself, preparing for a rainy day, and doing your homework.