Going Self-Employed – Is It For You?

Going self employed is no trivial matter; it is a life changing decision. Sometimes for the better and sometimes for the worse, but no matter what happens your life will be dramatically different. It is up to each individual to ask themselves if they are willing to take the gamble, and if so what do they stand to gain/lose? You should carefully map things out and know the possible outcomes before you jump in.

Where to start

The first thing to do is map out the finances of going self employed. This will let you know how viable it is as an employment option. A lot of people work for themselves to change their lifestyle, but unfortunately the finances still underpin the viability of that choice.

A good place to start is by writing up a fully costed business plan. This way you will know your required investment costs up front and be able to budget for them. You need to know how much it will cost to set up, what your breakeven levels are and set numerical targets. Writing up a business plan will also give you an idea of your own business knowledge. Everyone has great ideas, but it’s the execution of those ideas that makes successful businesses. You need to genuinely assure yourself that you have the knowledge and ability to go self employed before you convince anyone else.

Confidence is important but don’t fool yourself, you need to make sure you’ve made a calculated judgement that you can succeed. If you don’t then you shouldn’t go self employed – you’re only cheating yourself.

Are you the right person for the job?

A lot of people seem to think that you have to be a specific type of person to start a business or work for yourself. This actually isn’t the case; almost anyone can generate their own income. You just have to play to your strengths and use your skills wisely.

This doesn’t necessarily mean anyone can generate a lot of wealth on their own, but most people will have the ability (or the “tools”) to make money through self employment. If you look at a range of successful entrepreneurs you will find almost every personality type. Loud, quiet, arrogant, humble, kind, mean etc. There is no single type of person you have to be to become a success in business. Be yourself and play to your own strengths, do not try be someone you’re not because you’ll be ignoring some of your biggest personal assets.

If we are to look at some fairly common characteristics (not personality types) amongst entrepreneurs we usually see:

Determination
The ability to adapt ones self
A tireless work ethic
Industry/Market knowledge
Good customer management

When is the right time to go self employed

There are two conflicting thoughts when it comes to the right time to become self employed. Some think that you should do it when you’re young, have no commitments and little to lose. Where as others think you should wait until you are older, have resources to invest and life/career experience. Obviously there is no correct answer here, but I’ll try and scope out the benefits of both arguments.

Starting out when you’re young – There are several arguments for this but one of the most compelling is the level of risk that you can endure. When you are young you can take on a huge amount of risk with almost nothing to lose except your short term credit rating. You have no dependents, most likely no mortgage and a lot of drive/enthusiasm. This combination can create very successful and fast growing businesses in  a short time period. Okay if we look at the statistics most new businesses fail, but if you’re going to throw the dice maybe it’s best to do it with everything to gain and little to lose?

Waiting until you’re more experienced – The arguments for holding off until you are older are also quite compelling. If you start a business later in your career you will likely have a lot more resources behind you, business connections, contacts and experience. All of this strengthens your position as a business manager and owner. You have more resources that you can leverage to create a solid and durable business. It also means that you are less dependent on high interest funding or in a position of having to sell of large chunks of your company.

Take home message

The choice is yours! Whatever you do I wish you the best of luck and hope that you encounter every success and happiness.