Episode Details

Are you tired of the insecurity that comes from constant corporate restructures and the politics of a large work place? Way back in episode 11, I explored the Security Illusion. This looked at the idea that most of us are brainwashed into believing that financial security comes from working for a large corporate, or perhaps even a government body. In reality, these organisations are constantly the subject of restructures and redundancies. They are pyramids, with fewer and fewer roles the closer you get to the top, so people need to be constantly shed to make room for those below to progress.

So this post is for those who have reached the point of thinking about life beyond the corporate world, and what they see in their future is some form of self-employment.

I'm particularly excited to explore this topic, because this is a path that I've walked, and I know it's been the experience of many in the Financial Autonomy community too.

So as I mentioned, transitioning from the corporate world to self-employment has been part of my life experience. I worked for one of Australia's largest banks for 16 years. I've got plenty to be thankful for during that time. I learnt a heck of a lot, worked in several different areas to gain a diversity of skills, and got a start in financial planning. In hindsight I perhaps wish I'd tried to accelerate my path a bit, but that was really about my own lack of maturity rather than a fault of my employer.

As a foundation stone for my working life, I have no regrets about my time spent in the corporate world.

But I did reach a point back in 2006 where I'd found the thing I was passionate about – Financial Planning - I had another 20+ years of working life ahead of me, and I just couldn't see my life plan aligning with that of my employer – I knew at some point I'd get shifted, or downsized, or worse, made a team leader, the ultimate kiss of death.

My story is far from unique, with perhaps the only wrinkle being that my banking career had lead me to a budding profession that I could continue with in the outside world.

Plan

So how could you successfully transition from the corporate world to self-employment? I'd suggest the first step is to develop a plan. Start with a 1 page business plan, of which there are plenty of templates available for free on the web. Whatever you will do next, if you've chosen the self-employment route it's highly unlikely you'll be managing a team of 100's. So if you can't explain your business plan on a single page, you've gone wrong somewhere.

Another step, which I didn't do when I planned my transition, but I really wish I had, is to draw a diagram of your business model. Just on a piece of paper or a white board, show the various sources where your customers will come from, and how they will go through your funnel to become revenue generating.

Here's an example for my financial planning business:

Just as with the 1 page business plan, your business model should also be 1 page and answer the core question, how will your business make money?

Cash flow

The next port of call is to think through how you will manage cash flow. Cash flow in your post corporate world life will be very different. No more approving the invoice and sending it to accounts for payment. Cash flow is king.

From personal experience I advocate developing a Survival Strategy and a Capital Strategy. The Survival Strategy addresses how you will survive financially whilst you get this business off the ground. The Capital Strategy then considers your new enterprise – how will you fund the start-up costs, marketing etc.

For a deeper dive on this, take a look at How to be financially read