The Three Step Cubicle Escape Plan

It’s becoming obvious to employees and business owners that the way we’re working isn’t working.

Changes in the economy and available technology mean that traditionally structured organisations are becoming less efficient and more risky.

Business that employ large full-time staffs with set working hours and physical offices are losing out to small start-ups with scalable part-time workforces. The former are expensive to run and have long innovation cycles – the latter are cost-effective and agile.

As a result, the current trend is towards smaller organisations with less full-time employees. Instead, businesses are starting to depend more on contractors, freelancers and other small businesses, often working together remotely.

Self-employment on the rise

All the signs are pointing towards self-employment as a favourable alternative to the 9-5.

The tools and knowledge to perform work have become democratised. Anyone with an Internet connection and the desire to learn can become a designer, developer, marketer, etc.

The economic climate is such that small, independent entities provide more efficiency and risk profiles. Businesses are (slowly) realising this and reorganising their structure to take advantage of a scalable workforce.

Full-time jobs are simply becoming less relevant.

With this in mind, how do you structure your career from day-nought to take advantage of these factors?

There are three distinct phases someone can go through to transition themselves from employee to self-starter with a minimum of risk and no up-front capital investment.

Phase 1. The Apprentice

If you’re starting out with no skills, no experience and no connections in your industry, your ability to provide value is essentially close to zero… and if you try to take the leap to self employment without preparation you’ll be paid accordingly.

Although it may sound counterintuitive, my first recommendation for someone who wants to build a non-conventional career is to do something totally conventional: go work for someone else.

The apprenticeship model involves seeking out a mentor and working as their employee so you can learn the skills and experience you need to succeed in real-world scenarios.

An important thing to note is that the apprenticeship model is completely at odds with the traditional method of education for knowledge work (software, marketing, design, etc). Instead of going to an institution (e.g.: a University) where you learn 3-4 years of theoretical knowledge before putting it into use, you learn in a real-world environment. This is the key to rapidly acquiring the skills you need to provide value as a self-employed person.

At this early stage you should focus on taking a role that offers growth opportunities rather than one that pays well. This normally means going to work for a smaller operation where you can take on lots of different responsibilities and actually have an impact on the business.

After you’ve honed your skills to the point where you think someone would be willing to pay you for them (6-12 months for most knowledge work roles), you can move onto step 2.

Phase 2. The Moonlighter

The next phase involves dipping your feet into the water of self-employment. Using the technical skills and experience you attained as an apprentice, you start to work for yourself part-time. You become a moonlighter.

The key here is to continue working your full-time job. This will ease the transition to earning a full-time equivalent salary from your own business and smooth out the risk-profile significantly.

During this phase, you’ll typically work 9-5 at your day-job, then return home and spend evenings and weekends on your own project. A prewarning: this can be a lot of work. The transition phase is probably the most work-intensive, but it’s important to keep things in perspective. This isn’t forever, and you’re working towards something that (arguably) is invaluable: your own freedom and self-autonomy.

In order to transition to the next phase of self employment, you need two things: financial runway and a portfolio.

With respect to runway, you need some cash to cover your financial obligations while you work out how to increase your revenue. How much runway you need will depend on individual circumstances and risk appetite, but as a general recommendation I’d suggest you save enough to survive for 3-6 months without earning anything else.

The other important prerequisite to advancing into the next phase is a portfolio of work. This is essential as a sales tool when attracting new clients. Again, this is highly personal but I’d recommend a minimum of 3 good testimonials and/or case-studies before advancing.

Phase 3. The Start-up of One

The final phase is where the real fun beings. Now you need to take everything you’re doing as a moonlighter and scale it up.

Now that your financial runway and portfolio are looking good, it’s time to cut the safety rope and ditch your full-time job.

As a moonlighter you earned sales & marketing experience, a client base and financial runway. Now it’s time to leverage all of those things and transition into a full-time consultant or start-up.

Instead of spending a few hours a day on your business, it’s time to start focusing 100% of your time, attention and effort on building your business.

Moving Beyond Self Employment

Of course the obvious question after attaining self-employment is “what next?

This will depend on the goals and aspirations of the individual, but the progression normally involves doing basically the same thing for a period of time while increasing rates, honing your niche and diversifying your income streams (and/or client base).

This works up to a certain point. Then the individual needs to make an important choice: am I happy to plateau-out and continue on this level indefinitely?… or is it time to start thinking big.

  • http://fatcatapps.com/ David

    I like how you boiled down this concept into three simple steps.

    I’ve personally skipped stage 2 to speed up my progress. It wasn’t a bad decision, but at the same time it caused a little bit of stress since I had to make something happen fast. I think I’d recommend implementing stage two to most people, unless they have a lot of money (runway) saved up.

    • http://www.coreymcmahon.com/ Corey McMahon

      It really depends on your risk tolerance and how you deal with pressure. The stress of not having runway and therefore NEEDING to work something out quickly can actually put some people on the fast-track to success. With others it will just cripple their decision making ability and rob them of sleep.