Should you be your own boss? It’s a question that many people ask themselves over the course of their careers, but not everyone acts on it.
Nearly 15 million Americans are self-employed, or more than 10% of the workforce, according to recent figures from the U.S. Bureau of Labor Statistics. Some of it has to do with shifts in the economy and a job environment that increasingly uses independent contractors. Others simply have a business idea or want to take greater control of their careers.
Whatever the reason, experts and veteran entrepreneurs advise doing some serious research and self-examination before taking the leap into self-employment.
Not everyone is suited to work for themselves, says Lauren Zander, co-founder and chairman of the Handel Group, a corporate consulting and private coaching company. Develop a business plan, build up a nest egg, and be prepared to love your customer as much or more than your product, Zander advises. Tenacity is essential, she adds.
“Having a great idea is not usually the problem,” says Zander. “You had also better have a love of sales and knocking on doors. It’s about the ability to push through and persevere and still make 10 to 15 calls a day.”
Here are some other important things to consider before hanging out that shingle, from those in the know.
Judith Henderson-Townsend, a former account executive for an internet marketing company, didn’t know much about mannequins when she spontaneously bought up inventory from a man leaving town to start her own mannequin rental business in the San Francisco Bay area. But her passion for mannequins quickly took off, and 12 years later, she has expanded the business, Mannequin Madness, to include recycling, sales, repairs, and even a blog.
“I love mannequins, so the fact that I can make a living at it just makes it more exciting,” Henderson-Townsend says. “If I were selling something else, I would not have the same motivation.”
“If you’re in love with your product and not in love with your customer, you’re going to be sorry,” says Zander. “You can’t say, I’ll deal with you because I want you to buy my coffee pot.”
One of the biggest detriments to starting a business is being undercapitalized, says career transition consultant Deborah Shane. You should have a rainy day fund or savings built up to cover you and the business for at least a year, she advises.
"Make sure you can support yourself while you are growing the business and revenues," she says. If not, "then it’s best to defer until you are fiscally ready to carry yourself."
Anthony Rudolf, the former general manager of Thomas Keller's Per Se restaurant in New York, always wanted to work for himself. When he decided it was time to make the jump, he hired a life coach to help him navigate his dream of building an online hospitality training company.
“I needed a non-biased person in my corner,” he says. He also subscribed to an online software program to help him create a detailed business plan and hone all the financial details of his new career.
Henderson-Townsend, for her part, took a 14-week business planning workshop after realizing she might want to pursue an entrepreneurial path some day. When the mannequin opportunity came along a few months later, she sensed it was right but used her newly acquired business skills to gradually grow the business, instead of recklessly diving right in.
Despite standard advice to be ready to launch your business the day you leave your desk job, Rudolf took a full three months off after leaving his restaurant position and a work week that averaged 70 to 80 hours. He golfed, traveled across Asia with his wife, and “it was priceless,” he said.
“I felt if I was working on building my own business I would only be giving 50% to my job, which was important to me. I would also only be giving 50% to building the foundation of my business.” Instead, he left on good terms with his employers, and “I’m building my business in the parameters that I want to live life.”
6. Are You Prepared to Fail?
“You better be able to deal with rejection and eat it for breakfast,” warns Zander. On the flip side, the rewards are enormous, notes Maria Brito, a former corporate attorney who now runs her own interior design and art curating business in New York.
“Every success is multiplied ten times in happiness and personal accomplishments,” she says, “because you can claim them as yours.”