Most likely you are thinking about making a career change, and why not?
You may have had your fill of a corporate nine-to-five job. Or perhaps you’ve been inspired by the work-from-home surge that has changed many lives for the better this year. As businesses and individuals alike are re-learning what it means to work from home, you’ve decided to change your life by pursuing your passion, making a career change. This could mean seeking freelance work in a field like the arts, writing, or graphic design. Or you could be thinking about starting your own business.
Whatever your dreams are, Freelancer Inn can help. Start by keeping in mind the three considerations below when taking the plunge into a new career.
Career change essentials
1. You Will Need a To-Do List Just for Forming Your Business
Just like you can’t declare bankruptcy by shouting “I declare bankruptcy!”, you can’t form a new business by telling everyone your new business name and printing out business cards. As Mashable explains, there’s a specific protocol to follow if you want your business to be recognized as a legal entity.
Furthermore, this is important because it means that you will personally be separate from your business for tax purposes and that you will get special tax privileges and deductions for your small business or solo enterprise.
Here’s a brief list of steps for making a career change, starting your business:
- Pick a business name. -you will want to check with the Secretary of State in your area before printing those business cards to make sure it’s not taken.
- Form an LLC to protect your personal assets (such as college funds or retirement accounts) from your business’s liabilities. While there are other ways to form a business, an LLC will often be your best bet for a small company. It offers several advantages, plus it’s easy to establish through an online service.
- Get a Federal Tax ID number. This is like a social security number for a business.
- Write a business plan. As Shopify explains, this will help you to create a road map towards your business goals. It’ll also be useful if you intend to apply for any grants or loans, or even if you want to woo an investor or business partner.
- Attract customers. Obviously, you’re going to need customers for income.
With that in mind, think through things like what problems you’ll solve with your business idea and where you plan to reach out to your target audience.
- Determine your marketing plan. You’ll go nowhere fast if you don’t have any outreach. Many budding entrepreneurs find social media platforms useful for marketing. As Hootsuite notes, it’s loaded with tools, it reaches a wide variety of people. And on top of all that – it’s inexpensive.
2. You Will Need To Learn About Employee Laws
Chances are you will begin your venture as either a contractor or freelancer. HG.org notes there are a handful of things to know about the legalities of your employment. Like the difference between the two arrangements, what responsibilities your employer has to you. And what your responsibilities are to your employer.
As you expand, educating yourself about employment laws and rights. By filing the necessary paperwork, and understanding other pertinent legal issues ahead of time will likely save you time and money down the road.
For example, will your employees be true “employees” with W2 tax forms at the end of the year, or will they be independent contractors?
Furthermore, learning about what’s legal to ask of your new employees will only benefit your new business as well as your relationship with those you employ.
Signing contracts and being upfront about everything legal in the beginning is your best bet for a solid business foundation.
The distinction may not seem relevant to you or your employees — especially if you are thinking about hiring your friends — but legally, this matters. If you are considering hiring anyone to help you, do yourself a favor and prepare yourself ahead of time for being someone’s boss. Clarify your role and your expectations as well as your employees’ to avoid misunderstandings and hurt feelings.
3. Your Taxes May Look Different
If you are a freelancer who works under a contract with a 1099 tax form, you may need to pay quarterly taxes to the IRS every few months instead of waiting until April every year. This will depend on what your job is, your status, and how much money you are making. To avoid confusion, you may want to brush up on tax law or speak with an accountant.
Career change is complicated but you are not alone in this. Other freelancers may be able to help you learn the ropes as well.
Striking out on your own to either create a business. Or start generating your own income through freelance sources can be a great way to live.
Take some time to learn the rules involved and prepare yourself for your new role to ensure that nothing will stop you from achieving success in this new venture!
Connect with Freelancer Inn for more tips and information to help you along with pursuing your dreams!