Even during these difficult economic times, small business leaders still see opportunities and remain positive. 53% of small businesses surveyed in Australia in 2023 reported that they were expecting growth in the next financial year, bringing some cautious optimism to the table for those thinking of expanding their services.
Self-employed refers to those operating as independent contractors, or sole traders without other employees, who essentially run their own enterprise. If that’s you, keep reading.
Before diving in to start your own business, it’s important to assess whether you’re ready. As soon as your enterprise starts expanding and you hire employees, so too must your mentality shift from ‘self-employed’ to ‘small business owner’. For a small company to thrive, proactivity is a must.
In this article, we’re sharing our top tips on how you can transition for future expansion, and go from self-employed to business owner.
Identify your niche
Individuals looking for self-employment should first identify their niche market. Before you consider looking for opportunities for future growth, assess both your strengths and values as an entrepreneur. Look for something in which you have both interest and aptitude – then choose it!
Market analysis can help you glean whether there is enough interest for an idea to sustain long-term business operations. When considering a niche idea, take time to research competition and establish areas of high demand. Use this knowledge to craft your unique selling proposition and differentiate yourself from others in the market.
Delegate tasks
One of the primary motivations behind becoming self-employed is having complete control of your own work and being your own boss. But this also makes delegating tasks to subcontractors or employees challenging – especially if you’re used to being a sole entrepreneur with complete control.
Collaboration with experienced independent professionals will allow you to offer more services. Work with web developers, marketers, financial planners and business partners to develop your strategy and business plan. When it comes to hiring staff, look for individuals with a similar skill set, but who can offer something new to your business too.
Learning & development
Most advice about growing your business focuses on external factors like client demand and pricing structures. What about internal growth factors like learning and personal development? As a self-employed individual, investing in your own development is crucial to ensuring a sustainable business model.
Finding a mentor or coach willing to share their expertise may also be another effective means of developing your small business venture. Seek out someone willing to impart some of their wisdom. Professionals and trainers can provide guidance regarding which certifications or qualifications will provide the greatest return on investment.
Don’t forget your finances
Financial health is an integral component of business. Are you spending and investing wisely? Gaining control of your money will enable greater success in business and help you stay on top of everything else.
An effective self-employment budgeting tool or app can enable you to determine how much funds are necessary, making it simpler to determine rates and calculate a business owner’s salary. If funding is needed, bank loans or investors could be necessary as well.
Risk assessment and management
With all of the challenges associated with being self-employed, it is crucial that a risk analysis be performed and steps taken to mitigate those risks. Analyse any possible threats before devising strategies to manage them effectively.
Aspiring entrepreneurs must ensure they have sufficient finances in place to deal with unexpected events or accidents, should they occur. You can rest easy knowing that your business will continue to prosper no matter what may come your way.
Insurance is an invaluable way to secure yourself financially, offering assistance in times of trouble. Insurance providers and consultants can assist self-employed individuals in choosing the appropriate coverage and devIsing risk mitigation strategies for your business most suited to your industry.
Increasing income
Working more hours may not always be necessary to generate more profits from your own business. By increasing rates or diversifying sources of revenue you could potentially grow income without working more hours.
Many freelancers and sole proprietors grapple with raising client rates. With research and strategies in place, freelancers and contractors can reduce risk and ensure they’re getting compensated fairly for their knowledge, skills, and effort.
Create multiple streams of income to mitigate self-employment risks, without diverting too much energy or time away from your main business. If your business has seasonal or peak periods, this can take some of the strain off the quieter times.
Handling cash flow
Cash flow refers to how much money comes in and goes out. For sole traders, this may fluctuate a lot, and managing it should remain a top priority.
As the owner, you’re legally accountable for every aspect of running the business, from hiring employees to controlling cash flow fluctuations. Managing finances is a vital component to running any sole trader venture successfully.
It is crucial that records be updated frequently in order to accurately represent a business’ cash flow at any given moment in time. If numbers aren’t your strong suit, consider hiring a financial accountant to guarantee accuracy.
Gaining more clients
Gaining more clients and customers is the key to expanding for any independent contractor, while larger projects that carry greater importance will allow you to charge more.
Knowing how to market your business is essential if inquiries suddenly drop. It also helps in creating sustainable leads for future projects, making planning ahead much simpler. Once you establish an effective approach that benefits both you and your customers, expanding will become simpler when needed. That said, don’t undermine the gains from retaining customers too.
Embrace technology
Technological advances are disrupting industries and customer expectations alike, forcing businesses to adapt. Stay aware of new tech trends and keep up with the industry innovations, hiring strategically to take advantage of them.
AI technologies can offer an ideal solution for many aspects of small business operations, including chatbots for customer service and initial inquiries. AI is becoming more prevalent and will become an integral component of many self-employed businesses in the coming years.
Have faith in yourself
Many growing entrepreneurs aspiring to become business owners experience an impostor’s syndrome as they adjust to being leaders. Though you may have to change some aspects of how you manage your business, remaining true to who you are will ensure trust is built among employees while preventing burnout.
It’s wise to come up with strategies for handling difficult clients, sorting out potential problems among your employees, and a set of general best practices. These may change over time, but with foundational guidelines and your existing knowledge and experience in your niche, you should feel confident in your abilities.
Conclusion
Transitioning for future expansion is an exciting step in any sole trader’s career, but one that should also not be rushed into. Follow these tips we’ve laid out above to set yourself up for success.
Provide opportunities for growth within your company by setting goals and creating strategies. Be an example for others while encouraging your team to keep developing with you, and stay on top of everything from your finances to your self-confidence. That way, you can go from self-employed to small business owner with ease and expertise. Good luck!
