From Salaried Employee to Being Your Own Boss - 7 Great Tips

It is often a challenge when one moves from being a salaried employee to being your own boss. This is particularly more difficult if you run a home-based business and the hours are flexible. You may either end up overworking and neglecting the other priorities in life, or you may end up under-working, and not investing the needed hours to build your business.

We all need to build some form of structures to support our goals and turn them into reality.

Here are 7 great tips that you could consider putting into your structure for your new role as "your own new boss".

1. Determine your work space

For those who have a home-based business, it is particularly important to set up an area that we would consider as our office or work-space. This area would be where we go to every day to clear our work. It should contain essential stationary and work forms and templates to help us run more business more efficiently. If you are using a shared space, then it is important to get a box or drawer where you store your own business resources to help you get started and organized.

2. Determine your working hours

Like working for a firm, it is important to negotiate with yourself what your working hours are.

Determine how many days of the week you will be working, what hours you will be working and how many hours a week you will be working.Setting up our working hours help us to keep focused. If we determine that our working hours are from 8 am to 6 pm Monday to Friday, then we have got to make sure that we are at our "work station" during these hours.

This is ensure that we are doing the work needed to build our business, and not fall behind on our progress. It also helps to prioritize our time. We can then make sure that we do not overwork and neglect our family, friends and other priorities in our life. If there is a need to clear the outstanding tasks, then we could add in some over-time hours. This would help us recognize the extra hours we put in, and how we could better manage our time more efficiently the next time.

3. Determine your salary

It is important to negotiate a fixed monthly salary with yourself. When we work as salaried employees, we are ensured a certain fixed amount every month as our take-home pay. However, when we set up our own business, we do not have that certainty. On days where business is good, we get more revenue. On days where business is somewhat slower, we might be getting lesser revenue. It is then important to negotiate a fixed salary for yourself so that you are able to cover what you need for your monthly expenses, and yet, keep the balance for those rainy days.

Be honest when you negotiate a salary with yourself. Negotiate a realistic figure that you know would be sufficient to cover your expenses, and you are able to also generate business revenue that is higher than that amount. This would then ensure that you would accumulate savings to help you through days where business might be slower.

Review your salary yearly for a more accurate and up-to-date figure. If your business prospers and multiplies, work out a pay raise with yourself. If your business slows down, then you might need to work out a slight wage cut to help you and your business through.

4. Determine your benefits

Like salaried employees, it is important to determine what benefits you would be entitled to as a self-employed. Work out areas like how many days of leave could you take, how many days of sick leave are you allowed to have. This would help you keep to your working hours, and be more disciplined in building up your business. Work out areas like health care, which you might not be taken care of, now that you are not a salaried employee. You might need to contribute to your own health care insurance and that could be factored into the benefits that you determine.

5. Determine your objectives and goals

You would need to determine your own objectives and goals. You need to set a target of how much revenue you want to earn by the end of each year, and set up milestone targets to help you stay focused. If you plan to earn $100,000 by the end of the year, and have determined it to be realistic, you would then need to set up smaller goals to help you stay on track. This could mean that you would have to reach a quarterly target of $25,000 or a monthly goal of about $8,500.

Having goals would help you know if you are on track or have fallen behind, so that you have a realistic view of how you are doing as a boss.

6. Determine rewards and penalties

If we do well and reach our desired targets, we could get additional commission, bonuses and additional pay-outs. On the other hand, if we do not do well, and fall short of our targets, we could be penalized and forfeit one day leave or have to work additional hours to compensate.

Having a rewards and penalties structure would help us stay disciplined. Being honest to ourselves and keeping to the structure that we set up would help us to develop our character as well as ensure that our business and priorities get the needed attention.

7. Sign a contract with ourselves

After we have determined all the six points, we would need to "hire" ourselves and sign a contract with ourselves.

This contract, like all employment contracts, would include our place of work, working hours, salary and benefits, project targets as well as reward and compensation system. After we have included these factors into the contract, we have got to sign it as a commitment to ourselves. Refer to your contract regularly to ensure you adhere to the stipulated clauses and conditions. If there is a need to review your contract, do so honestly, and ensure that your contract is fair to both yourself as the employee and you as the boss.

While being your own boss is a really exciting moment, there are challenges that you would face in being disciplined to set up a routine and ensuring that you grow your business and not at the expense of your family and self. It is important that you recognize the need to take care of yourself, balance work and family, and strive to achieve your goals.

May these 7 steps help you be successful in building your own business and being your own boss.