How to avoid pitfalls when you decide to become your own boss

How to avoid pitfalls when you decide to become your own boss

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So you have lost your job in the COVID-19-induced economic crisis and have decided that now is the right time to change tack and become self-employed.

It is widely acknowledged that happiness comes from making progress towards a goal that is important to you. Making the leap to self-employment provides room to attain that satisfaction.

Self-employment can be be a viable alternative if you are jobless, providing you plan wisely.

Self-employment can be be a viable alternative if you are jobless, providing you plan wisely.Credit:Gabriele Charotte

However, the journey is not without its share of pitfalls and challenges.

Let’s look at some of the obstacles you might face and what you can do to help overcome them.


Getting lost in the weeds

Business plans, balance sheets, taxes, budgets and marketing: these are just some of the items thrown at those starting businesses. It’s easy to get overwhelmed.

Before you set out, be clear on why you are moving to self-employment – perhaps it’s the desire for more money, more family time, building a team, or solving a big problem.

Determine your objective and then your other plans can fall into line with how they contribute to you reaching your goal.

Which pathway?

There is more than one pathway to self-employment. Perhaps you are in a profession, such as accountancy, where it is possible to set up your own shop, doing exactly what you have always done, only now you would be the boss.

You could be a barista who starts a coffee-roasting business – sticking to an industry that you know but trying something different.

You could even decide to buy an existing business that generates revenue from day one.

Being clear on the right pathway for you is essential in navigating your leap successfully.

In demand?


You might love your idea but, if no-one else does, it is unlikely that it is a viable business.

Before making the jump, confirm there are people willing to pay for what you plan on delivering. Do your research – and friends and family don't count.

Short, sharp plan

A key advantage you have is the ability to be nimble and responsive. Long-winded business and marketing plans set in stone work against this advantage and should be avoided.

However, that doesn’t mean having no plan. Search online for one-page business and marketing plan templates. There are plenty available. Often their greatest value is prompting you to consider something you have not thought of yet.


Mindset is especially important if you become self-employed.

No longer will you have a manager to report to, or work colleagues to confide in. How will you win the mind games? Can you find one or more mentors you can speak to on a regular basis to keep your mindset on track?

Think about your mental strengths and weaknesses, and plan ahead on how you might manage them.

If you are starting out on your own, good luck. There is plenty of help and advice available to help you on your journey. Just ask.

Paul Benson is a financial planner and creator of the podcast Financial Autonomy.