Being out of work can be a window of opportunity. It’s the chance to embark on a new professional journey, and many people seize the moment to start their own business.
Being an entrepreneur has many advantages, but it’s not for everyone. Before you decide to set aside your job search and plunge into life as a small business owner, it’s important to carefully consider the realities of working for yourself.
First, the benefits
Most people who think about starting their own business are aware of the advantages, including:
- Being your own boss. It’s appealing to think you won’t have to answer to anyone else, especially if you’ve had bad-boss experiences in your past professional life.
- Making your own hours. Chances are, you’ll work more hours in your own business than you ever did for anyone else, but you’ll have more flexibility to work when it fits into your lifestyle. Need to take a couple hours out of the day to go to your child’s school play? You can do that, and tack those hours on to the end of your work day, or even at night when the kids are in bed.
- Being true to your ideals. Rare indeed is the employee who feels in perfect agreement with everything his or her company does and the ethics (or lack thereof) behind certain business decisions. When the company is yours, you set the standards for what is ethical.
- Raising the earnings ceiling. Most small business owners don’t make much money in the early years of their company, but once the business really gets rolling, your earning potential is practically limitless.
But what about…
Of course, starting a business isn’t all wine and roses. There will likely be drawbacks, which could include:
- Feeling isolated. Many entrepreneurs start out as one-person shows, and it could be years before you really find yourself working in a full office again. If you’re the kind of person who thrives on interaction with others, you might find running your own business to be a lonely endeavor.
- Running lean. Instant success is possible but rare. More likely, you’ll experience some lean years before your business really becomes profitable and grows. Do you have the reserves — both financial and mental — to weather those lean years?
- Carrying more responsibility. Perhaps in your old job you managed people, but you probably didn’t feel the full weight of responsibility for their financial well-being that you might when you’re the head honcho. When the business is yours, you can’t help but feel responsible for the welfare of everyone who depends on your business for a living.
- Navigating regulations. Tax paperwork, payroll, W-2s, etc. — there’s a lot of government-required paperwork involved in running a business. If you’re operating in a particularly regulated industry, there’s even more. Navigating it all can be confusing and complex.
Aptitude testing
So how do you know if running a business is right for you? The first step is to craft a business plan. This is not a step only for people who think they’re going to need to raise capital from sources other than their own pockets; it’s for everyone. A business plan helps you evaluate the strength of your idea and business model, what steps you need to take to launch the business and operate it, and your potential for growth. Creating a business plan can help you answer these critical questions:
- What motivates you to stick with a job?
- Are you aware of your strengths and weaknesses?
- Are you good at making decisions?
- What experience do you have not only in your industry but in working for a small business?
- How will your business affect your family life?
- Do you have the confidence, ambition and passion to turn your idea into action?
- Are you willing and able to learn the financial aspects of operating a business?
- Are you willing to work harder than you’ve ever worked before?
Running your own business can be deeply gratifying and financially rewarding, but it’s important to know if you’ve got the aptitude for it before you dive in.
