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How Kiwi’s can safely transition from the 9 to 5 into self employment

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There are so many people dreaming about breaking free from the constraints of a traditional nine-to-five job and becoming their own boss. However, the transition from full-time employment to self-employment can more often than not challenging and risky. This article runs through a few things Kiwis should consider if they want to safely transition from full-time work to self-employment. We’ll be briefing looking at topics such as assessing readiness, creating a financial plan, building a safety net, creating a business plan, finding support, managing risks, setting realistic goals, and overcoming common challenges.

Assessing your readiness

Before making the leap to self-employment, it’s really important to assess your readiness. You need to evaluate your financial situation, skills, and motivation to determine if you’re prepared to take on the challenges of running your own business. Before handing in that resignation letter ask yourself the following questions:

  • Do I have the necessary skills and experience to run a successful business?
  • Am I financially stable enough to weather the ups and downs of self-employment?
  • Am I motivated enough to stay focused and disciplined when working for myself?
  • Do I have a solid support system to rely on during the transition?

If you find that you’re lacking in any of these areas, it’s crucial to address them before making the transition to self-employment. Side Hustles NZ has a heap of resources to help you get started, and if you’re unsure you can buy us a coffee and have a chat.

Creating a financial plan

Creating a financial plan is crucial when transitioning to self-employment. Without a plan, you risk running out of money before your business takes off. Many people don’t realise how much it costs to start a business, plus you still have your lifestyle to maintain. To create a financial plan, follow these steps:

  • Create a budget: Start by listing all your expenses, including rent, utilities, groceries, transportation, and other bills. Then, compare your expenses to your income to determine how much money you have left each month.
  • Save for startup costs: Determine how much money you need to start your business, including equipment, supplies, and marketing expenses. Save enough money to cover these costs before quitting your job.
  • Plan for ongoing expenses and income: Estimate your monthly income and expenses for the first year of your business. Make sure to include unexpected expenses, such as repairs or emergencies.

Building a safety net

Building a safety net is crucial when transitioning to self-employment. Without a safety net, you risk financial ruin if your business struggles. Consider the following when calculating how big your safety net needs to be:

  • Save for emergencies: Set aside enough money to cover at least six months of living expenses in case of an emergency.
  • Plan for health insurance: Determine how you will cover your health insurance costs when you’re self-employed.
  • Manage debt: Pay off any outstanding debts before transitioning to self-employment.

Creating a business plan

Creating a business plan is essential for a safe transition to self-employment. A business plan will help you research your market, define your target audience, and create a marketing strategy. Not everyone chooses to take this step, but if you’re looking for clarity and want to set targets, consider these steps:

  • Research your market: Identify your target audience, competition, and industry trends.
  • Define your target audience: Determine who your ideal customer is and how you can best serve their needs.
  • Create a marketing strategy: Determine how you will promote your business to reach your target audience.

Finding support

Finding support is crucial during the transition to self-employment. A mentor or business networking group can provide guidance and advice when you need it, and act as a third party when you need to bounce ideas around. To find support, follow these steps:

There are also many great free resources and Facebook groups available to help get you started. Make use of them! You can join ours here

  • Find a mentor: Look for someone who has experience in your industry and can provide guidance and advice.
  • Join a business networking group: Attend networking events and join groups online to connect with other entrepreneurs.
  • Seek out other resources for support: Use online resources, such as business blogs or forums, to connect with other business owners.

Managing risks

Transitioning to self-employment comes with financial, legal, and personal risks. It’s crucial to manage these risks in order to protect yourself and your business. Give careful consideration to the risks you might face, and check out these points:

  1. Get insurance: One of the most important things you can do to manage risk is to get insurance. As a self-employed person, you will need to purchase your own health insurance, as well as insurance for your business, such as liability insurance and property insurance. It’s important to shop around for insurance and find a policy that provides the coverage you need at a price you can afford.
  2. Protect your intellectual property: If your business involves creating original content or products, it’s important to protect your intellectual property. This includes obtaining patents, trademarks, and copyrights as necessary. You should also be aware of any potential infringement issues and take steps to avoid them.
  3. Protect your personal assets: When you’re self-employed, your personal assets are at risk if your business is sued. To protect yourself, consider setting up a limited liability company (LLC) or another legal structure that separates your personal assets from your business assets.
  4. Keep accurate records: Keeping accurate financial records is essential for managing risk. It can help you identify potential issues early on and make informed decisions about your business. You should also be sure to keep copies of important documents, such as contracts and legal agreements.
  5. Be prepared for emergencies: Emergencies can happen at any time, and it’s important to be prepared. Set aside some money for emergencies and have a plan in place for how you will handle unexpected events, such as a natural disaster or a major illness.
  6. Get professional advice: If you’re unsure about how to manage risks, it’s a good idea to seek the advice of a professional, such as an accountant or a lawyer. They can help you identify potential risks and provide guidance on how to manage them.

By taking these steps to manage risks, you can help protect yourself and your business as you make the transition to self-employment.

Setting Realistic Goals

Setting realistic goals is an important part of transitioning to self-employment. Here are some tips for setting achievable goals:

  1. Be specific: When setting goals, be as specific as possible. Rather than setting a vague goal like “increase sales,” set a specific goal like “increase sales by 10% in the next quarter.”
  2. Make them measurable: It’s important to be able to measure your progress toward your goals. Make sure your goals are measurable, so you can track your progress and make adjustments as necessary.
  3. Set a timeline: Setting a deadline for achieving your goals can help you stay on track and motivated. Make sure your timeline is realistic and achievable.
  4. Be flexible: It’s important to be flexible when working toward your goals. If something isn’t working, be willing to adjust your approach and try something new.
  5. Celebrate your successes: When you achieve a goal, take time to celebrate your success. This can help keep you motivated and focused on achieving your next goal.

By setting realistic goals and tracking your progress, you can stay motivated and focused as you make the transition to self-employment.

Overcoming Common Challenges

Transitioning to self-employment can be challenging, and there are several common challenges that people often face. Here are some of the main challenges and tips for overcoming them:

  1. Isolation: Working for yourself can be lonely, especially if you’re used to working in a team environment. To overcome isolation, consider joining a business networking group or finding a mentor who can provide support and guidance.
  2. Burnout: When you’re self-employed, it can be easy to work long hours and neglect self-care. To avoid burnout, make sure to take breaks, set boundaries, and prioritize self-care activities like exercise and relaxation.
  3. Financial stress: The financial uncertainty that comes with self-employment can be stressful. To manage this stress, create a financial plan and regularly review your expenses and income. Consider seeking out a financial advisor who can help you manage your finances and plan for the future.
  4. Lack of motivation: Without a boss or team to hold you accountable, it can be easy to lose motivation. To stay motivated, set realistic goals and regularly review your progress. Consider finding an accountability partner or coach who can help you stay on track.
  5. Feeling overwhelmed: Running a business can be overwhelming, especially if you’re just starting out. To manage feelings of overwhelm, break tasks into manageable chunks and prioritize your to-do list. Consider outsourcing tasks or hiring help if necessary.
  6. Ultimately, the key to overcoming these challenges is to stay focused on your goals and remain flexible. Remember that setbacks and challenges are a normal part of the process, and that with persistence and perseverance, you can overcome them.


Transitioning from full-time employment to self-employment can be a rewarding and fulfilling experience. However, it’s important to approach the transition with a thoughtful and careful plan to ensure your safety and success.

By assessing your readiness, creating a financial plan, building a safety net, creating a business plan, finding support, managing risks, setting realistic goals, and overcoming common challenges, you can make a smooth and safe transition to self-employment.

Remember that the road to self-employment may not always be easy, but with hard work and dedication, you can achieve your goals and create a fulfilling and successful career. So, take the leap and start working for yourself – the possibilities are endless and exciting!

Side Hustles NZ

Hey, I’m Rachel! I started Side Hustles NZ in 2021 with the goal of helping Kiwi’s start and grow small businesses in New Zealand. During the week you’ll find me discussing side hustle ideas in our Facebook group, working in my website design business, or riding my horses.

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