How to decide if self-employment is for you

Many people are tired or get frustrated working for someone else. But being self-employed isn't an easy decision to make. This article will help you decide if it's right for you.

Instructions

Difficulty: Moderately Easy

1. **Why do you want self-employment?**
   
   If you ask 10 people why they want to be self-employed, you'll get 10 different answers. You see, there's no one reason fits all! And so the first thing you need to do is ask yourself: Why do I want to work for myself?
   
   Is it because you:
   
   a) Are frustrated with all the nonsense that goes on at work?
   b) Sick and tired of being told what to do and when to do it?
   c) Looking to make more money?
   d) Looking to supplement your current job with more money?
   e) Hoping to start a business the entire family can be a part of?
   
   These are just a few of the many reasons why people decide to work in self-employment. But there are good reasons and not-so-good or bad reasons.
   
   For example, being told what to do on the job isn't necessarily a bad thing. That just goes with the territory. Each business has their own way of doing things. And some people like it, while others don't.
   
   As a self-employed individual, you may also have to follow some rules or guidelines you don't particularily like. For example, local, state, or federal laws and regulations. Or filing regular tax paperwork.
   
   So even self-employed individuals have policies and rules they may have to follow whether they like it or not. Just remember this.
   
   But whatever your reason is, make sure it's a legitimate and good reason to work for yourself. Otherwise, you may be making a mistake.
2. **Types of self-employment**
   
   Within the world of self-employment, there are many avenues you can take. You can start and operate your own business from scratch. Or you can buy into a franchise and open up your own location. Or you can sign on with a company that helps you setup shop selling their products, giving you a commission of what's sold.
   
   In other words, there are many ways in which you can become self-employed. Which way to go is something you should consider ahead of time. That will help you discover which avenue is the right one for you.
3. **Franchises**
   
   A franchise opportunity is where you setup a store/location for an existing company. It's "YOUR" store, but you're part of the larger entity--the franchise itself.
   
   For example, 7-11 and McDonalds. You can open your own McDonalds' restaurant by becoming a franchise owner. You are not McDonalds the company, but rather the owner of one of their restaurants. So you're self-employed because that particular location belongs to you.
   
   You decide whom to hire, how much to pay, how to get customers, etc. And you get the profits from your store. But on the downside, you must shell out money in order to buy into the franchise. And this can cost thousands or tens of thousands of dollars!
   
   Why do you have to pay anything? Because you're not operating under your own name, but rather under the corporate name of the franchise. So you're representing them! And they want to make sure you do it well and will make them proud.
   
   So requiring you to pay a franchise purchase fee is a way to ensure you're serious about becoming part of them and will fit in well. And many require a yearly renewal fee to continue being part of the franchise.
   
   In addition, you'll be given some policies and procedures you'll have to follow. For example, they might say you can only sell items approved by the franchise itself. Or you may need approval if you wish to deviate and carry something else in your store. You could be given restrictions on the use of corporate logos, etc.
   
   So you're basically self-employed in the sense that the franchise location you own is yours. You earn the profits from it and run it your way up to a point. But you're also under the umbrella of the franchise itself and do have some guidelines and policies to follow.
   
   In addition, some franchises may require you to complete a training program so you can learn their way of doing business, their products and services, and more information about them.
   
   And lastly, if it involves a store, you'll have to pick the location and the franchise may help with the financing. But not all do. And so, be prepared to get your own financing once you've found a location.
   
   The biggest advantage with a franchise is name recognition and instant creditibility. This is because they already have a name that's known. And because you're operating under this name, customers tend to be more trusting of new locations. That's because they see a name they already know and trust.
4. **Network Marketing**
   
   For those of you who don't know what this is, let me explain it. You buy products from a company and then tell others about it so they'll buy those products from you. In other words, you're using your personal network of people (friends, coworkers, family, and outside advertising) to market these products under your own business name.
   
   Generally, you pay an upfront amount to participate and buy a sample product pack that you'll use to promote and sell. How much? Well that varies, but it's usually in the low hundreds.
   
   Now you should understand that there are plenty of legitimate network marketing companies out there. For example, Mary Kay Cosmetics and Avon. You open your own business by reselling their products. And you can do it by going door-to-door, having parties, just telling people, placing ads, etc.
   
   How you generate your business is up to you. And like a franchise, you represent your netork marketing company's name. However, you have more freedom in how you operate, lower investment costs, and operate under your own business' name.
   
   TIP: Beware of network marketing companies that simply have you recruit other salespeople who'll do the same. This is a classic pyramid scheme and is illegal!
   
   Why? Because there no actual customers, just salespeople reselling to other salespeople. And each of the salespeople collects a commission on the people below them.
   
   With legitimate ones, you're merely an outside sales rep who operates under your own business name reselling their products and services. You're not an employee, you're an independent contractor--outside sales rep.
5. **Your own and actual business**
   
   Another way you can become self-employed is to start your own business without becoming part or joing another company. This is true self-employment because you're it!
   
   Here, you operate independent of anybody else, except for any government regulations. But you don't have to pay to join somebody or are told how to run your business. You make all the decisions yourself!
   
   For those of you who want tremendous freedom and the feeling it's all mine, this may be the best route for you. But beware that it can be a bumpy road to success. Why? Because you're starting from scratch!
   
   With a franchise, you're buying into the name, which gives you instant creditibility and brand recognition. After all, who hasn't heard of Kinko's, Fed Ex, 7-11, Burger King, etc? And you've got the support of the corporate office with general operating procedures, etc.
   
   But with your own business and no outside help or guidance, you may or may not succeed. Now I don't want to burst anybody's bubble. I merely want to point out the reality of self-employment opportunities.
   
   So before you jump in and start your own business, investigate things very carefully!
   
   a) Do you know the business you're getting into? If so, then do you know it well enough? If not, then do you know someone who does that you can consult with? Or can you get some training in it to give you some expertise?
   
   b) How much will it take to startup and run it? Did you include everything--licensing fees, advertising costs, financing options, etc?
   
   c) Do you already have customers in mind or are you starting totally from scratch?
   
   d) What name will you pick for your business? Will it reflect the image and impression you hope for? Will it be insulting to some or misinterpreted?
   
   e) How will you attract business/customers? And how much will this cost?
   
   f) How long will it take for you to make a profit? Days, weeks, months, years? And how will you survive during the period when you're not profitable?
   
   These are all important things to consider when starting your own business by yourself. And if you decide to partner with someone, I strongly suggest having a written partnership agreement. This way, each of you will know what to expect and who's responsible for what. And that can prevent legal trouble or personal arguments down the road.
6. **Look within yourself*
   
   Before you decide to become self-employed, I suggest you take a personal inventory of your skills, experience, and training. This will help you decide what type of business to start and how successful you might be.
   
   And be sure to look at your likes and dislikes. If you don't like something, then you may not be successful in it because your heart isn't in it. We tend to put our best efforts into things we like and enjoy.
   
   Also look at your own personality to see if you'd fit in well with whatever type of business you want start. And if you're going to have employees, then are you prepared to deal with the workplace issues that may arise? What kind of employees do you want working for you? Are you going to manage them, or hire a manager?
   
   These are all decisions and factors you must consider BEFORE starting your business! Why? Because starting any business costs money and you want to be sure you spend your money wisely. So taking all these things into consideration beforehand will help you spend money wisely.
7. **Full or part-time business**
   
   It's possible to work in self-employment on a full or part-time basis. Many will start part-time to see how well their business goes or to see if it's right for them. And if it goes well and they like it, then it might become a full-time business.
   
   Others know they want to do it full-time and immediately jump into it. Which way is right for you? That's something you'll have to consider.
   
   However, I suggest taking baby steps! Why? Because the odds of success are against you. That's the reality of it. Statistics show that most new businesses fail within the first few years. But don't let this discourage you; let it be your inspiration to succeed!
   
   So I suggest you start part-time and investigate it fully to see if it's right for you and can be successful. Plus, you'll be able to work elsewhere and get an income in the meantime. This is helpful to building up your bank account and helps cover losses if the business doesn't work out or generate enough money.
   
   But if you give up your job to run your business right away, then you may be in the following position. Your business doesn't earn enough soon enough and you need money. Without another job, you'll be forced to dip into your savings or finance. And that can really add-up and eat up your money very quickly!
   
   So working part or full-time and running a business on the side may be the better way to go iniitially. It'll give you a good taste of what it'll be like, how much you enjoy it, and how successful it may be.

Tips & Warnings

• Don't jump into self-employment without doing your homework first!
• If you want to join a franchise or be part of network marketing, investigate the companies first to make sure they're legit!
• Make sure the business is something you'll enjoy. That will increase your chances of success!
• Decide if you want to start full or part-time
• Beware of network marketing companies disguised as multi-level marketing (MLM)! If all you do is recruit others to sell, then that's a pyramid scheme and is illegal!