Job vs. Self-Employment: How to Decide
Do you want to be your own boss? Are you:
- Retired, or will be soon?
- Downsized or laid off?
- An employee planning "what next"?
- A homemaker?
- A worker planning to stay in your job but wanting more?
Many people like you are searching for ways to be self-employed - now or later, part-time or full-time. Some have a creative business idea already. Others want to find an idea that'll work.
Home-based businesses appeal to some. For others, a business located away from home makes the most sense.
Many people need a business mostly to provide income. Others have different reasons for wanting to be self-employed.
There has been an explosion of new small businesses in the U.S. Going into business for yourself can be both thrilling and risky. Many new businesses do fail. When they succeed, the satisfaction can be heady.
It's a big deal to give up a job - or even part of a job - with its steady salary and benefits to start out on your own.
Compare Jobs with Self-Employment
Think through some comparison questions to start making your choice between a salaried job and self-employment. Invest some time in answering these before you make decisions. Come back to the questions after you do more research on a specific business idea. Before you decide anything, see how your answers may have changed.
What risks are involved in starting your own business? Are you willing to take these risks?
Are you willing to take moderate risks to achieve your goal? In some cases, the risks may be small. They would involve mostly the loss of your time and effort. Some ventures, though, would mean risking your life savings, your home, or even your personal relationships.
On the other hand, what are the risks of not starting your own business? Of staying in your job? These risks could be financial, emotional, or both.
Maybe you'll leave your job with a pension and health benefits. Maybe you're determined to strike out on your own no matter what.
Many people new to self-employment fall somewhere in between. They keep their full-time job and do their own business on the side. Or they reduce their work hours and devote as much time as possible to starting up their business.
What about you? Know what risks you are taking. Decide if you are willing to take them.
Why do you want to be self-employed? How is this different for you than working at a salaried job?
Do you want to be your own boss? Get to use more creativity? Try for financial independence? More fully draw on your knowledge and skills? The U.S. Small Business Administration lists these as common reasons for wanting to start a business.
In an AARP survey, home-based business owners said they wanted to be their own boss, have fun, enjoy freedom for family and recreation, keep busy, and help others. And half operate a business mainly for income.
But some people achieve those goals in a salaried job. Could you? What would you have to do differently to bring more creativity and independence to your job? Are you sure that starting your own business is the only way for you to apply your entrepreneurial skills?
Can you successfully run your own business? Could you apply your motivation and skills to a job just as well?
Do you have the drive and energy to achieve what you want? Do your temperament and personality match those of business owners? Many business owners work seven days a week. Starting your own business and making it succeed can take years. This could be just the challenge you need at this time in your life. But there may also be other ways to stay motivated and use your best skills.
Could you negotiate with your current boss for a new assignment or a different shift? What about switching to a different work team? What if you changed jobs, and put new energy into your work?
Can you turn your ideas into a real business? Can you use your ideas to get a promotion or a better job instead?
Successful entrepreneurs typically plan their new businesses for a year or more. Are you willing to do this? Could you take a small-business start-up course to see if this is really what you want? How about drafting a business plan and getting an expert to tell you how realistic it is?
What if you spent six months or a year planning how to get a better job at your company? Or a different job somewhere else? Would the results satisfy you as much as your own business? Or be less risky for your family?
How does your family feel about your plans, whatever they are?
Maybe your family notices how much time you spend on your job now. Having your own business can take up much more time than you can imagine. It can mean extensive time away from your family. If you work at home, you may be with them constantly. How could those changes affect you and your family?
The changes could also be better for everyone. Your own business could bring you the satisfaction and family closeness you're searching for.
Additional Resources
Are
You Ready?
Is entrepreneurship for you? The U.S. Small Business
Administration helps you think it through.
Considering
Self-Employment
Use the Information and Discussion Areas for Entrepreneurs to
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or who have already done it.
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