Are you cut out to be self-employed?
Have you saved enough money? Entrepreneurship is expensive. There are a multitude of costs involved in starting a business, and it can be months or years before the owner is able to take a paycheck. Can your family's finances handle this? Many people just don't have enough money saved to weather such a storm, and not having the proper funding is probably one of the biggest reasons why new businesses fail. As a business owner, you're the last one to get paid, so be ready.
Are you ready to go beyond the nine-to-five? If you thought you worked a lot before... that will probably be nothing compared to your schedule as a self-employed person. While you may gain some flexibility by being your own boss, the hours you work will probably be many more than you ever imagined. Say goodbye to a regular routine of punching in and out. You are at the mercy of your customers and your employees.
Do you envision a life of glamour? Being your own boss involves doing plenty of things that don't even resemble glamorous. The bottom line is that everything in your business is your ultimate responsibility, so you better be willing and able to do things that you don't enjoy. The work has to get done one way or another.
Are you disciplined? There is no one to keep you accountable. The success or failure of your self-employment rests solely on you. Can you motivate yourself? Are you disciplined enough to meet deadlines and keep forward progress going? Or are you prone to random surfing of websites and leisurely coffee dates with yourself?
Being self-employed can be one of the most rewarding career decisions you ever make. But it can also be the most frustrating if you're not able or willing to handle all the ups and downs. You can control your own destiny if you're willing to work hard and take full responsibility for all aspects of your venture. But don't enter into self-employment lightly.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.