The idea of striking out on your own and becoming your own boss sounds incredibly appealing. You can set your own hours, you have no boss looking over your shoulder, and you’re in complete control of your own success. While working for yourself can be especially satisfying, it’s not for everyone. Self-employment can be an expensive, exhausting and lonely journey. It takes a unique combination of determination, self-sufficiency and resourcefulness to make it on your own, but if you’re able to say yes to the following five statements, being your own boss may be worth a shot.
You Have That Entrepreneurial Spirit
When you make the choice to become self-employed, you go from being a small cog in the engine to being the entire engine. Self-employment is the equivalent of starting and running your own business, and the success of that business rests solely on your shoulders. Functions that were handled at your old company such as payroll, supply management, technology and invoicing are now part of your daily responsibility.
Working for yourself involves spending a lot of time on tasks that you didn’t have to worry about before. That can turn a traditional eight-hour work day into a 12-hour day or longer. Many startups require round-the-clock attention to keep moving forward; expect that kind of commitment when you jump into the world of self-employment.
You’re Willing to Bear the Financial Burden
One of the underrated aspects of self-employment is how expensive it can be.
The first thing to consider is the cost of setting up shop. If your business is doing financial analysis or freelance writing, a home office space and a computer might be all you need to get going. If you’re an accountant, you’re likely to need to rent an office space and fill it out to meet with clients.
In addition to that, you need to consider taxes, insurance and retirement savings. As an employee of another company, your employer contributes towards payroll taxes and insurance. As a self-employed individual, you don’t get any assistance with those costs, so expect your annual tax bill and health insurance premiums to go up. Employers also normally make matching contributions to registered retirement savings plan accounts; those contributions would also disappear.
Make sure you have a significant savings cushion in place in case things don’t quite work out as planned. Obtaining some startup financing might not be a bad thing to at least consider.
Youre Passionate About Your Career
There’s a big difference between going to work at a company every day and going to work for yourself. When you’re working for an established business, you know that, absent a major calamity, your paycheque is coming regularly. When you’re self-employed, if you don’t put in the work, you don’t get paid.
That’s why you need to be passionate about your work. If you don’t really enjoy what you do, you could get progressively more disgruntled and gradually lose your motivation. If that happens, the paycheques start to dry up. On the flip side, if your passion is on full display, you’ll not only want to continue growing your business and work hard to satisfy your clients, you’ll also reap the benefits of developing a solid professional reputation leading to potentially further business opportunities down the line.
You’re Willing To Give Up Some Personal Flexibility
While working for yourself does allow you to set your own schedule, be prepared to make some larger-scale sacrifices with your free time. If you’re an accountant, don’t plan on taking much vacation time during the first four months of the year. Some occupations give you the flexibility to clear your calendar for a day or two, but if you run a brick-and-mortar shop, taking even a simple day off could mean shutting down the business altogether.
If you’re self-employed, you’ll need to keep in mind that a day off is a day you won’t make money.
Youre OK Spending Long Periods of Time Alone
Self-employment can be immensely satisfying, but the isolation can also be socially unappealing. Working for yourself can mean long hours alone stuck at home. While some people have no problem with that in fact, it might be one of the reasons they chose to leave the corporate world in the first place extroverts who thrive on social interaction may find the setup less fulfilling.
Taking the time to schedule lunch with friends or joining professional organizations may help solve the problem. Since you’re the boss, working for yourself also allows some flexibility to get out for short walks and coffee breaks occasionally to break up the day.