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Solopreneur Money

Sep 15, 2020

Are you ready to transition from being an employee to becoming a solopreneur? If so, that means it’s time to get your ducks in a row to make sure that you and your family are prepared financially. There are 7 categories that you’ll want to consider to make sure you are ready to make the leap. You want to ensure that your standard of living stays the same as you make your transition, so listen in to hear all the things that you need to consider before becoming a solopreneur. 

You will want to hear this episode if you are interested in...

  • Making the leap to become a solopreneur [1:42]
  • The options you have for retirement planning as a solopreneur [4:52]
  • Understanding your tax burden [11:10]
  • Creating a support system to help you through hard times [19:02]

The 7 categories to consider before becoming a solopreneur

Becoming a solopreneur is not something to take lightly. You are leaving the security of your job behind, yet you still have all the responsibilities. You don’t want to rush in and then crumble under external pressure. Before you leave your position to become a solopreneur, consider these 7 categories. 

Cashflow - Do you have the ability to create the revenue you need? Is this a side hustle that you hope to grow, or do you have clients in place ready for you to make the leap? How much money do you think you need to run your home and business over the next 12 months?

Emergency savings - How much emergency savings do you have in place in case your new venture doesn’t pan out as expected? Make sure you have 6-12 months of emergency savings in place. (And the closer to 12 months of savings you can get the better!) Before you wave goodbye to your employer you’ll also want to ensure that you have a line of credit in place as well. The last thing you want to do is depend on your credit card.

Retirement - You probably know that options for your old 401K are to leave it alone or roll it into a Roth IRA, but did you know that you can create your own business retirement plan? Listen in to hear the different options that you have to create your business retirement plan.

Risk management - What threats could derail your financial success? What are your plans for insurance? Health insurance, life insurance, and disability are all important considerations. Getting disability insurance as a solopreneur may be more complicated than you think. Find out why by listening in.

Taxes - Are you prepared for the tax burden that comes with being a solopreneur? Are you aware of the 15.3% self-employment tax? Set aside a separate account to pay your taxes and take pains to reduce your tax burden. You can find ways to reduce your taxes by finding a quality tax professional who specializes in helping small business owners. No one wants to leave the IRS a tip! 

Legal - How will you set up your business? Will this be a sole proprietorship, an LLC, an S corp? Do your research to find out the best way to structure your business. Make sure to begin with the end in mind. 

Support system - Who are the people you rely on when things get crazy? Find mentors and cheerleaders to help you through the tough times because life as a solopreneur can be challenging.

Check out the free worksheet

On my website, you can check out free resources to help you reach your financial goals. Check out the free worksheet that will walk you through these seven steps. You can also email me for more information or to schedule a consultation. Click on the links below to get started on your journey to becoming a successful solopreneur. 

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