How To Set Your Solopreneur Goals

Those who consider themselves self-employed can have many working definitions of what that means for their career. For some, it might simply serve as a tool to bridge either a new job or retirement, while for others it’s a way of life that becomes both an identity and a career.

In both scenarios, self-employment also provides evidence of less depression and greater wealth among workers compared to regular workers. But these facts also tend to benefit more privileged groups, such as those who are male, white, and generally affluent to begin with.

So how can the benefits of self-employment be shared with a wider audience? It is an important question that has become increasingly important in the current economy. For example, according to two new studies highlighted by That New York PostThe number of self-employed mothers with children under the age of six saw a significant increase compared to pre-COVID-19 rates. According to the Center of Economic and Policy Research, the rate of self-employed black women increased from 4.1% to 5.2%. The proportion of Hispanic women increased from 6.1% to 7.4%.

What could play a role in this dynamic? According to a separate study by the Center for American Progress, the number of childcare workers was down 8.4% from before the pandemic and may have played a role.

Being forced to be self-employed because of childcare needs, job loss or other reasons is not ideal – although it is common. If you are faced with such a scenario, try to handle the situation according to your requirements.

When tackling your business, depending on the goals you want to achieve with the business, you can ease the stress you face in transitioning into self-employment, whether it’s forced or not.

self-employment due to childcare needs

Raising a child is in and of itself a full-time job. When you’re juggling childcare and trying to start a business—even a solo business—you may only have a few hours in the day for something else.

In such a situation, from a financial perspective, develop a plan that will give you as much money as possible for the least amount of work. Of course, that sounds like everyone’s dream – work less and get paid more. It’s not quite that idyllic; When people start out as solopreneurs or consultants, they often take whatever job comes their way, no matter the price. If you do this and at the same time have limited time to work due to childcare, you may be forced to do business in the early hours of the night while the child is finally asleep. Nobody wants that.

To ensure you’re only taking on gigs that you can reasonably pay for your time, set yourself an annual income goal and then divide it by 12. Next, take that number and divide it by the number of hours you put in want to work for a week. Let’s say you want to use your solopreneur job to secure an annual income of $75,000. If you have to work 40 hours a week, you must charge a minimum of $156 per hour. If you want closer to 30 hours then it’s closer to $208.

But you’ll also want to add buffers since, as a business owner, you have other responsibilities — like signing contracts, keeping accounts, and other administrative tasks. Also take this into account when setting the rate.

Of course, you have to be realistic about the industry you’re in. If the numbers don’t work, you may need to change your goals or find other ways to apply your expertise that require a higher pay scale.

There’s no easy fix for this, but make sure you only accept jobs that match the goals you set in that initial analysis.

Self-employment due to a lost job

When transitioning into self-employment due to a lost job, it can often be difficult to pinpoint exactly how seriously you want to take your solo business when you’re also looking for a new role. However, one of the advantages of being self-employed is that it can give you leverage when looking for a job, as you can afford to wait for the dream position if enough income comes in.

When you decide to consult or freelance while looking for a new job, you go through the process of formalizing your business. Forming a limited liability company (LLC) for the business can both give you a touch of legitimacy when you start seeking clients, as well as provide you with tools to save for retirement or reduce taxes. You can even create a retirement vehicle like a Solo 401(k) with the existing business entity.

When you start getting customers, you can treat the business like a business; This can attract higher paying clients or better clients that reflect the company you want to work for because you have a legitimate, professional presence. And if you find that you like an experience with an organization, you can also ask about the potential for a full-time position.

It costs very little to shut down the business if you end up finding a path to a new job.

Self-employment as a bridge to retirement

Long-time employees face many decisions as they approach retirement age as part of their current career path. Do you want to start reducing your hours? Does the employer have early retirement benefits? What happens when they are fired?

A common reason for self-employment is to bridge the gap between the last few days in the office and retirement. This allows you to add years before you tap into retirement funds, allowing them to grow before you – allowing for continued growth of your portfolio before you start using the funds. But you also don’t want to ruin yourself by trying to do everything yourself at the end of your career.

Achieving this requires some budgeting. Understanding what it takes each month to fund your lifestyle and putting more money into a retirement account before you retire will give you a sense of what to do with your time as a solopreneur. If you’re looking to add $2,000 each month to retirement accounts and also need $2,000 a month for living expenses for the next three years before you retire, then you know how much you need to earn to ensure that your lifestyle will not be affected.

Having a clear goal for when you can retire can also give you purpose as you start the business. For example, if you know you have three more years to go before you start tapping into retirement accounts, and you also know that you’ll need $4,000 a month for those years, then you know your business needs $144,000 (after taxes and adjustments) inflation) over 36 months. If your business is proving to be more resilient than expected and you’re meeting your goals early, it might be time to consider early retirement.

An option that only a few employees have – but a possibility with self-employment.