Ah, the fantasies . . . make your own hours, invent your own rules, choose your own associates, express your creativity, and make unlimited money. These are the dreams of the aspiring self-employed. Yet, if you interview people who have built a profitable business, they will tell you about the long hours, financial insecurity, lost contracts, loan problems, self-employment tax, and the daily dance with risk that it takes to run your own business. On the positive side, there are many self-employed folks who thrive on the excitement and challenge of designing their own company. What’s the best option for you? Are you emotionally ready for the journey?

Terrance set up his own landscaping company after he got laid off from a landscaping conglomerate. Unfortunately, many of his former co-workers did the same and competition for clients was fierce.

Gloria hated her boss and quit just to spite her. She then set up her own graphics shop across the river. She had hoped that the clients would follow her, but many chose to stay with her former employer who offered one-stop desktop publishing services as well as graphic design.

Joshua had a dream. After fifteen years as a loan officer, he wanted to help new entrepreneurs finance their small businesses using his own criteria. He felt his bank was overly conservative and missing out on great opportunities. So he began by pulling together a group of investors.

Choose Self-Employment for the Right Reasons

Of these three stories, Joshua has the greatest likelihood for success. He has a vision--a vision of service to others. The opportunity to empower start-up businesses he believes in is exciting. As well as helping others, he is ready to shed his gray suits and change his lifestyle by having a home office. For the happily self-employed, the chance to create a business that reflects who they are is paramount.

On the other hand, both Terrance and Gloria fell into self-employment. Terrrance chose it by default; he couldn’t find work in his field, so he thought he’d try solo. Gloria started a business out of revenge. She wanted nothing more than to do it her way and discredit her old company. Neither default nor revenge inspire the fortitude to win in the marketplace. Terrance enjoyed the hands-on work of landscaping--preparing the soil, planting the flowers, moving trees, and being outdoors. He loved to work independently and delight in nature. With his previous employer, he rarely had to meet with clients or price materials. Now, as a businessman, he found himself doing the tasks that he liked least and longing to just get his hands in the dirt. Because he didn’t have the resources to hire helpers, he ended up working seven days a week just to keep up. The fun had vanished. Gloria was stunned to learn that competing with her old employer, despite their low quality service, was difficult. She was only able to secure a few previous clients and eventually people tired of her negativity about her old company. Both Terrance and Gloria were at a crossroads.

Your Business is a Creative Expression of You

Gloria, in particular, built her new business on a shaky foundation: anger. Anger is rarely a strong enough engine to run a company. Fortunately, Gloria realized her error and sought help to redirect her future. She loved graphic design and especially relished brainstorming with clients on the best logo for their business. While some of her new business came from client referrals, she needed to market her services to increase sales.

I asked her to describe what kind of business she wanted to develop. She had no idea. Gloria had never thought about being a business owner and wondered if she could make it. Her anger had blinded her to the realities of office rent and accounting. But she liked the independence and had a history of conflicts with her bosses. I asked her to write a vision of how she wanted the business to reflect her values and personality and in what way she was more gifted than any other graphic designer. This assessment process helped Gloria to acknowledge that she wanted to be self-employed. She also discovered that her company would be different because she would make her client relationships fun and that her intuitive skills helped her to create logos faster than her competitors. Armed with these revelations, Gloria drew a fabulous logo for herself and started networking.

Terrance came to a different conclusion. He decided he was an implementor not a business developer. He wanted to get back into the soil. Gardening for him was like a meditation and he resented the negative stress of business meetings and paperwork. But before he rushed off to find a job, I encouraged him not to invest all of his energy in one employer. He needed to protect himself from the disruption and financial ramifications of another layoff. His favorite parts of gardening were priming the earth and planting. While he disliked formal meetings, he loved to tell gardening stories and teach people about fertilizers and flower placement. After he secured a traditional commercial landscaping job, Terrance contracted with a local nursery to run a series of gardening classes every spring and fall. These classes yielded numerous referrals for him. So, he easily had an income on the side just in case he lost his job again. His gardening classes became a wonderful professional and social outlet for him and bolstered his wounded confidence. In their own way, Joshua, Gloria, and Terrance found avenues to put their personal signature on their work.

Beware of the Partnership Pitfall

Many people considering self-employment are too timid to try it on their own. So, they team up with a partner. Unfortunately, business partnerships fold faster than marriages. Before you partner with anyone, whether it’s your best friend, your spouse, or a talented colleague, stop! Take a careful inventory of the needs of your business and your own preferences and talents. Then think about the benefits of this potential partner. Does he/she have skills that you don’t? Do you have the same work ethic and availability? Do you have the same financial resources and needs? Do you trust this person totally? What are this person’s weaknesses? Are you opposite types or complementary? Have you ever done a project together? How did it go? Being brutally honest with yourself, what concerns you about this person? Most failed business partnerships occur because one or both parties repressed information about the other. Denise knew that her sister was very disorganized but denied the impact it would have on their import/export business. Its impact was devastating and cost them both thousands of dollars.

If your potential partner passes these initial tests, try a project together first. Take your time, experiment, and meet regularly to evaluate your progress. Many entrepreneurs want to do their business alone and be in charge of everything. Collaboration and team work sound appealing but in actuality are complicated. If this potential partner is a friend or relative, think carefully about how a failure could affect your relationship. Is it worth the risk to you? Is there someone else you could work with and maintain more objectivity? One of the most satisfying interventions I’ve done over the past few years is talk people out of business partnerships. Using a tool called the Myers-Briggs Type Indicator and assessment questionnaires, it often becomes crystal clear what the prognosis is for a partnership and what undiscussed issues need to be processed.

Sometimes it’s better to begin a venture on your own and then look to add a specific skill set. Don began a website development business using his advertising expertise. A year after a harrowing tax experience due to his poor record-keeping, Don decided he needed to add a business manager. After considering his friend as a possible partner, Don determined that it made more sense to hire a bookkeeping service than to possibly contaminate the friendship.

If you think a potential partnership will be beneficial, take it slowly and allow it to develop in stages. Business alliances are increasingly common in today’s networked marketplace. Consider an affiliation agreement instead of the legal and emotional entanglements of a partnership.

Timing and Experience

Timing and experience often dictate success. James wanted to purchase his own restaurant. While he had experience as a bar tender, chef, a bus boy, and a waiter, he knew nothing about restaurant management. A local steak place came on the market and he got all excited about buying it. But, when he talked to his bank, they told him he wasn’t qualified and needed a partner. James didn’t want a partner. The intrigue of owning a place was to be the sole owner and boss. He researched the restaurant business and discovered that the failure rate is extraordinarily high. James was tempted to make a go of it without the management piece but was unable to convince any potential investors to back him. Reluctantly, James let go of this opportunity. Instead, he approached another favorite restaurant and offered to bartend as well as assist the manager on special projects in exchange for learning the business essentials. He also signed up for a Small Business Development Center series on accounting and purchasing. Interestingly enough, the steak place was sold and went under in less than a year. James began to study the patterns of success and failure among the local eating establishments. Two years later, a successful family dining place went up for sale and James’s boss wrote a letter of recommendation for James to the bank. James was now prepared to be captain of his dream.

Sophie, a production manager at a consulting company, wanted to become a freelance project manager, as she thrives on the diversity of different industries and challenges. She scouted around to find other established freelancers and meet with them. Her research paid off. Her contacts told her that companies were slow to acknowledge this new field and that the market was flooded in her region. These conversations sparked her curiosity. Sophie explored opportunities nationally and discovered two cities where project managers were actually turning down work. She decided that it made sense for her to relocate for two years for the experience and then return to her home state. She located an agency that brokered project managers and she was off!

While it’s not impossible to take a drastic risk, like James buying his first restaurant without management experience and having it work, but it’s a gamble. James could have ended up discouraged and in debt. There certainly have been self-employed people who just dove in without financial resources and succeeded, but it’s the exception not the norm. Before you choose this option, think about whether or not you need a job or project to bridge your experience first to give you the credibility and confidence you need to make it on your own. Compare yourself to the top people in your field and examine their training and credentials. You may well benefit from courses or mentoring before you develop your business plan.

Also, is this a good time in your life to start a business? Do you have the energy, the health, the resources, or the support to do this now? Do you have young children or elderly parents or debt or other stressful situations you are struggling with? How’s the timing for the rest of the family? Also, what’s happening in the economy locally and internationally that impacts your decision? What’s the prognosis for your field and the trends that will have the most influence? What does your intuition tell you about this proposed business? Both personal and external timing factors are key to the success of a business venture. What do your research and your own psyche indicate is the best path for you?

Building a Support System

I often tell budding entrepreneurs not to be surprised by a lukewarm reaction from their family, especially if they abandon a good paying job in the process. What do your parents, spouse, relatives, and colleagues think of your plan? Have there been successful business owners in your family or is there a legacy of bankruptcy and failure? What are the axioms and myths about work in your family? Look for positive role models and seek their advice. Gloria, our graphic designer, remembered that she had a cousin who was an accomplished independent floral designer. Gloria sought her counsel and found her tremendously helpful.

When you undertake a calculated risk, you need all the emotional support you can rally. Often the newly self-employed encounter criticism, envy, and doubt from their friends, associates, and family. Dawn, a fitness consultant, found her accounting oriented family and her peers totally discouraging. Her former boss, the manager of a health club, said, “You’ll be crawling back here in two months begging for your job back.” A fellow fitness instructor told her, “I tried doing it on my own and it was a disaster. Spare yourself the pain.” Dawn was smart enough to realize that she needed to create her own support team. So she initiated a lead’s group with a tennis pro, a massage therapist, and an image consultant. They met weekly and their encouraging words helped her to stay strong. She wisely kept her distance from all who undermined her efforts until she felt more solid.

Another option is to recruit a board of directors or advisors and strategically select people who may have a different point of view and caution you about pitfalls. Karl, a management consultant, is an idealist. So he purposely selected a critical thinker for his advisory group. “My thinker helps to keep my actions more practical,” he says. It helps to have a sounding board for your intentions and people around you who believe in your abilities and ideas.

In summary, it is very likely that you will become self-employed one day. Fortunately, there are more resources available to you than ever before. Fortify yourself with the best information and advice and cultivate your own inner guidance to help you pilot the way. May the rewards be great!

Author's Bio: 

Gail McMeekin, MSW, LICSW, is a nationally known career/creativity/life choices coach and consultant and the author of the highly acclaimed books, The 12 Secrets of Highly Creative Women, The Power of Positive Choices and Boost your Creativity. Her work has been featured in many periodicals such as Boston Magazine, Investor's Business Daily, Redbook, and Health, as well as on radio and TV. You can subscribe to her free newsletter “Creative Success” and receive a new free e-book called The Path to Creative Success at http://www.creativesuccess.com . You may contact her at gmcmeekin@comcast.net