Self-Employment: How to Know if You're Cut Out for It
Think it's time to be your own boss? First, answer these eight questions
By Vanessa Richardson | June 7, 2013
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Jackie Krick, 51, of Bristow, Va., spent her entire career working for marketing and advertising companies. But in recent years she became increasingly frustrated — and convinced that she could run a similar business much more effectively than her bosses did. “I just couldn’t take it anymore,” she recalls.
In 2004, weary of her almost nightly complaints, Krick’s husband, Rick, told her: “Just quit and figure out what you want to do.”
Krick followed his suggestion and soon opened ECU Communications, a marketing firm that caters to the federal government. Her thriving business now includes such clients as the U.S. Department of Homeland Security and the National Guard.
Maybe you feel the way Krick did, telling yourself with a Munch-like internal scream: “I can’t work for anyone anymore!” Or perhaps you lost your job recently and would like to be your own boss to avoid another layoff.
Becoming an entrepreneur or working freelance can be hugely rewarding, but not everyone is cut out for it. Before you put out a shingle, it’s a good idea to assess whether you have the temperament, the discipline and the financial wherewithal to be your own boss.
To make that assessment, ask yourself these eight critical questions:
- Are you fearless? Jennifer Wang, a small-business writer, says that the most successful entrepreneurs she has interviewed all have fearlessness in common. "They thought: ‘I will totally make this happen,’ instead of ‘This might be fun,’" Wang says. Alana Muller, president of FastTrac, an educational program for aspiring entrepreneurs run by the Kauffman Foundation, agrees, noting that the business owners who do best have a higher tolerance for risk. “They can acknowledge they’ve failed, quickly get back on their feet, and try something else,” she says.
Do you need a regular paycheck? Muller maintains that it’s often financially easier to start a business in your 50s or 60s than when you’re younger, since you no longer have to shell out for college tuition and other expenses for your children or a downpayment on your first home. Still, some people feel lost without a steady paycheck. If you're one of them, entrepreneurship isn’t for you. But if you're comfortable without that paycheck, you may be ready to take the plunge. It's a good idea, however, to start with a savings fund equal to six months of your living expenses to help you weather the lean times.
Do you crave a daily routine? If you’re the kind of person who can’t stand not knowing what the next workday will bring, you probably wouldn't enjoy being your own boss. “There will always be stresses in running a business,” Wang says. “If you're not invigorated by that, you won’t succeed.”
- Is being praised for your work essential? Self-employed people rarely get pats on the back, says Mary Beth Izard, author of the business guide BoomerPreneurs. “People climbing up the corporate ladder generally have a drive for recognition, but entrepreneurs aren’t driven by prestige or status,” she says. “They have to affirm themselves, because no one else is their cheerleader.”
- Do you have the mentality of a manager? Many people just don't feel comfortable being in charge or even detest it. They prefer being told what to do at work then go about doing it. If you don't have a manager's disposition, you're better off working for someone else.
- Do you have discipline? Krick attributes her success in large part to self-discipline. “You can’t wake up, clean house, watch TV and then take a call or two," she says. "You must be organized and dedicated.” Kathye Russell, 64, a land consultant in Placerville, Calif., who started her own company last year after being laid off at a civil engineering firm, shares that outlook. “I do whatever it takes to get things done," she says. “I even happily clean the toilet in my office.”
- Are you ready to work 24/7? Starting a business is like raising a child: It takes over your life. “We emphasize to FastTrac applicants that being an entrepreneur is a full-time gig,” Muller says. “If you anticipated doing some traveling or relaxing, those plans would have to be put on hold — 100 percent of your efforts and passion must go into building the company.”
- Do you have support at home? Wang sums it up bluntly: "If your spouse is not excited about you spending all of your combined savings on something that may not succeed, then the business won’t succeed.”
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