If you have ever wanted to be your own boss, then you’re in the right place. There are plenty of things to consider before branching out and starting your own business, no matter what that business is.
Before we get to the list, let’s talk about some pros and cons of being your own boss.
Pros of Being Your Own Boss
Your Wage Cap is Yours to Control
With every 9-5 job comes a limit of how much money you can make. Sure, you can discuss a raise every few years, but ultimately, your boss is in control.
When you work for yourself, you determine the amount of money that you can make.
You Can Choose Your Hours
Most people who work a scheduled shift will tell you that life would be easier if they could control their hours.
As your own boss, you have the freedom to do that. You can control what days you take off and what hours you work throughout the week. You won’t have to miss those important family gatherings or doctor’s appointments because you can plan around them.
You’re Responsible for Your Own Business Decisions
Being your own boss means that you get to make important decisions about your business by yourself. The only boss you have to answer to is you! You get to design your business the way you want without worrying about upper management’s opinions. Work remotely if that is important to you.
You Don’t Have to Worry About Getting Fired
There are many reasons people lose their jobs, especially in an at-will state. There doesn’t even really need to be a good reason. Being your own boss means that you can’t be fired or let go.
Starting late today? No problem! Don’t feel like putting on a suit today? No big deal.
Being your own boss allows you the freedom to make your own decisions without fearing the consequence of losing your job.
Cons of Being Your Own Boss
No Monetary Guarantee
This con is hard for many to accept. The reality of being a business owner is that money is not guaranteed, and generally speaking, running a business is expensive.
Your income isn’t going to be steady like your full-time paycheck. You may not see a profit right away and may face times where you can’t cover your expenses or pay yourself.
You’ll Put in A Lot of Work
Again, this isn’t a 9-5 job where you can leave work at work. Being your own boss means that you will be responsible for your business all day, every day.
Any order that comes in or any issue that pops up needs to be dealt with within a reasonable amount of time to ensure customer satisfaction.
Success is Up to You
This can be considered both a pro and a con, but this is a con for my fellow lazy people out there.
Your success is measured by how much time and effort you put into your business. Having that much responsibility can be overwhelming.
Even if you’re doing something you love and are passionate about, it’s not as simple as showing up every day and doing enough work to keep your boss happy.
10 Things to Consider if You Want to be Your Own Boss
Now that we’ve covered some pros and cons, it’s time to get into the details of what you can expect when working for yourself and why it may or may not be suitable for you.
What Are You Going to Do?
One of the hardest decisions for some people is deciding what they are going to do.
If you already have this figured out, then you’re ready to go. If not, that’s okay. But you need to have a plan before you start.
The best type of business for you to start will involve something you are passionate about and interested in. So to be your own boss, the first step is to find what that passion is. Maybe it’s art, writing, or music, or perhaps it’s something completely different.
Whatever you love is what you should frame your business around. That way, you should never have to worry about finding motivation.
What Can You Afford?
We all know and understand that running a business costs money. You’re going to need start-up capital if you want your new venture to be successful.
Supplies, marketing, shipping, and hiring help are going to be out-of-pocket costs as you begin to get your business up and running. So, when you are starting a business, make sure you have the funds available to afford these things.
Working for yourself means that you alone are responsible for financing your business until you get a decent clientele. You need to be financially prepared to pay for things upfront in hopes that you can at least make that money back.
How Much Time Do You Have?
Another important factor to consider is how much time you have to devote to your business, especially initially. If you want to be profitable quickly, you will need to make your business your priority while getting started.
Once you figure out how much time you have and want to devote to your business, it will be easier to determine how successful you can be.
When considering how much time you really have to spend working on your business, factor in family and social obligations, basic household tasks, self-care, and whether or not you’ll keep working another job.
Will You Keep Working?
Are you interested in starting your own side hustle business to make some extra money and learn new skills? Or are you hoping to quit your day job to embrace entrepreneurship fully?
This decision will also tie into financing because your availability will depend on how much money you have to put toward your business.
If you plan to keep working while your business is growing, be aware that you’ll be putting in many extra hours. It may be exhausting to work all day on your business needs and then work a night shift job, but it ensures that you still have a steady income.
If you choose to go for it and work on your business full-time, make sure you have enough money to support yourself and your business. You also need to consider your options if your business doesn’t take off right away because you don’t want to accumulate debt.
What Experience Do You Have?
You may have a fantastic business idea, but how much experience do you have in that field?
For example, opening a catering business might be something you’re interested in, but have you ever catered for an event before? Do you have experience in volume cooking? Or budgeting food costs?
As your own boss, you are responsible for making all of the business decisions. Having some experience in whatever craft you choose can jumpstart your success.
What Do You Know About Running a Business?
On that same note, having some knowledge about running a business can certainly help you along the way, too.
Studying business can help you take care of minor struggles with ease and motivate you to be successful. Whether you learn more about accounting, marketing, or business management, a little bit of education can go a long way when it comes to real-life experience.
If you don’t’ have a lot of experience, learn as much as you can. Take an online course to learn new job skills. Talk to other business owners, contact a small business development center, or find a mentor. They can help you register your business, write a business plan, and secure the proper licenses and permits.
Is There Demand or Competition?
If you have your product or service figured out, then it’s time to research whether or not it’s in high demand and if competitors are already meeting that demand. This can be the difference between earning a profit in your first month versus not seeing a profit for a couple of years.
For example, if you decide your business will be making coasters by hand, then you need to consider how many you’ll be able to sell. Your target market will be small. Your friends and family will not want a constant supply of new coasters, and neither will your customers. You may want to consider trying something in higher demand or expanding from a niche product to help sales and repeat customers.
You also need to look at your competitors. Can you do a better job than they already are? If you can’t beat their prices or level of quality, it will be hard to convince their customers to switch.
How Will You Find Customers?
This is a challenging part of starting any new business, but it’s important to consider where you will find your customers and potential clients.
Will your business operate online, or will you open a physical location?
Will you promote your products and services through your own website, or will you use a platform like eBay or Etsy?
Finding customers can be a challenge, especially if you don’t have many friends or family willing to spread the word about your small business. So, you’ll need to come up with creative ways to build a customer base.
What About Supplies?
Supplies are an essential aspect of your business to consider. In addition to the cost of supplies, you also need to find out what exactly you’ll need and where you can get it. Don’t be afraid to shop around for better prices or discounts for buying in bulk.
When first starting, you’ll need to make sure you are staying on top of your supplies and keeping track of what inventory you have left. Not having enough supplies means that your customer waits longer for their product, which can negatively affect customer satisfaction.
Even if you are offering a service and not a physical product, you will still need some basic supplies to run your business (such as setting up a home office). More importantly, though, is your time. If you cannot supply enough time to meet your customer’s needs, they won’t stick around.
Trust me. If customers aren’t satisfied, then they’ll tell everyone who will listen. So, take care of your customers by ensuring you have the proper supplies (and time) to fulfill orders, and your customers will thank you.
Will You Work Alone?
Being your own boss is great, but you need to decide if you can really operate your business on your own or if you need help.
Take blogging, for example. Yes, you can successfully turn a blog into an online business that you run on your own. But this means you are responsible for: web development, solving technical issues, marketing, branding, copywriting, social media management, customer service, data entry, bookkeeping, content creation, photo editing, graphic design, selling, data analysis, networking, proofreading, negotiating, market research, and more!
Can you really do all of that by yourself? Do you want to?
Not every business will require all of these skills, but I guarantee you that there will come a time where you will need help from someone else – especially the more successful you get. So it’s a good idea to keep this in mind because this will come at a cost.
You may be ready to be your own boss, but are are you prepared to manage employees, too?
Why Do You Want To Be Your Own Boss?
This is a fundamental question, but proper motivation can be what makes or breaks your business. So it’s important to consider why you want to do this in the first place.
Do you actually want to be your own boss, or do you hate your job and want to do something different?
Your motivation only needs to matter to you, but be sure you aren’t making any rash decisions. Otherwise, you may get stuck doing something you don’t want to and run out of money before you know it.
Make sure you are doing it for the right reasons.
Starting your own business and being your own boss is your choice to make, but hopefully, these considerations have given you something to think about before you move forward with your plan.
Being your own boss and running your own business is not easy, but it can be gratifying if done carefully and involves your passion. So, consider these tips, but don’t be afraid to branch out and try something new.
Thank you for reading this article. Please visit The Cents of Money for more articles of interest.
This post originally appeared on Your Money Geek.
Amanda Kay, an Employment Specialist and founder of My Life, I Guess, strives to keep the “person” in personal finance by writing about money, mistakes, and more. She focuses on what it’s like being in debt, living paycheck to paycheck, and surviving unemployment while also offering advice and support for others in similar situations – including a free library of career & job search resources.