4 Questions to Ask When Considering Entrepreneurship
Before joining the droves of people striking out on their own, make sure self-employment is right for you.
Charlie, a graphic designer, felt lucky to have ridden the waves of the pandemic with a full-time job when so many colleagues got laid off. But then, those same peers started to work freelance, to great success. Charlie started to wonder if he should follow in their footsteps.
According to the Wall Street Journal, hundreds of thousands of Americans are striking out on their own as consultants, retailers, and small-business owners—contributing to the Great Resignation and current hiring crunch. The rise of self-employment could be because the COVID-19 crisis gave people an unexpected length of time to consider what they really want to do with their lives. “For many workers, self-employment has been a distant goal, and the pandemic was the push they needed to pursue it,” says Val Olson, a career coach at Korn Ferry Advance.
But running a solo business isn’t for everyone. Here are some considerations if you’re thinking of becoming your own boss.
Is your personality suited for self-employment?
The typical entrepreneurial profile is someone who is curious, adaptable, risk-tolerant, comfortable with ambiguity, and driven. In the beginning, you will likely have to be your own marketing, finance, IT, project management, and other operations teams, as well as delivering the good or service you sell.
Often, people want to start their own business because of a passion for a cause or unmet need in the market, but career experts warn that passion will only propel you so far. Running the day-to-day of a business takes practicality and patience—and many aspects of it will be mundane, just like any other job.
Have you tested your idea?
One of the easiest ways to transition to self-employment is to offer the same services to several clients that you currently provide to one company on a salaried basis. If you have experience and industry knowledge, you’ll have a starting sense of the market demand and going rates.
Some entrepreneurs stumble when they jump into a solo career without testing the idea. “Talk to a lot of people. Do a lot of research. Learn about the market. Make a plan for how you'll pay your bills if business starts out slow,” Olson says.
Have you considered hybrid options?
It’s becoming more common for people to work across multiple teams within one company. They keep their salary, but different teams “hire” their services on a project basis. This could give you the sense of being a freelancer, without the risks. You may also want to transition to part-time at your job while you get your business up and running. Or, you could become a subcontractor for the company that currently employs you.
As part of your due diligence, find out the tax and benefit implications of all of these options, and what kind of fees you’ll have to charge to make entrepreneurship worthwhile.
Could you get freedom another way?
If you’re thinking about self-employment because you’re not fulfilled in your current role, reflect on what you need less or more of from your career. You may realize that if you made a few changes, you wouldn’t want to leave your job after all. “Leaders want to retain high performing employees,” Olson says. “So, talk to your boss about getting the types of things you desire from entrepreneurship, such as more control over what you do, growth opportunities, or flexibility.”