Should you quit your job and work for yourself?

Just shy of a decade later, I can pay my bills on time (in full) and I still enjoy my work - and now that I have kids, I can actually spend time with them in the day instead of having to catch a train downtown. 

I guess it's because I've been at it for so long, but I often get asked what it takes to quit your job and work for yourself. I thought I'd share a few of my experiences and pieces of advice here, just in case you're considering becoming a free agent:

Think about what you could do to make money. I think the easiest thing to do is explore ways your current job could be outsourced or turned into a service you could offer to other companies. Your dream freelance opportunity could be right in front of you. Companies often look for freelance support in areas like project management, communications, IT and strategic consulting. Since I had a lot of experience in financial services, I took that route. I had the contacts and the know-how to write about money, so it seemed like the best way to get paid work, fast. If your company is okay with it, consider taking on freelance assignments in your spare time to test the waters and see how you fare.  

Can you afford to quit? If you have a lot of monthly expenses and commitments (kids? Mortgage? Other dependents?) it needs to make sense financially. When I quit I had a small cash stash - a bonus I’d received in a previous job that I socked away and forgot about. It was enough to cover my bare bones expenses for about five months. I was also single and childless - another incentive for taking a risk (to be honest, I don’t know if I’d be able to do it now that I have two kids to feed and a fatter mortgage). You should have your own cash stash to fall back on before taking the plunge. 

Can you handle unsteady cash flow? When you work for yourself, you are at the mercy of the market. No work = no pay cheque. It can be feast or famine, so you need to handle your cash flow with discipline - a great month could be followed by a really bad one. Budget accordingly. At the same time, it can be really stressful if you do not have work booked - if you can't manage that kind of stress and uncertainty, then working freelance is probably not your bag.  

That being said... Working for yourself can be great from a financial planning standpoint. If you price your services properly, you can cover off some of your housing, phone and Internet costs as well as other expenses related to operating from a home office. There are some really good tax-planning strategies that come from running your own business (especially if you can incorporate!). 

Remember - one can be the loneliest number. If you’ve worked for a company for most of your life, working alone can come as a major shock. Even though you might dream of working from home, it can be really really tough (trust me!).You need to be disciplined and motivated. Granted, the prospect of paying your bills is an excellent motivator for getting to work in the morning, but not everyone is cut out for working in isolation. Cabin fever is a reality for freelancers - and it ain’t pretty.