How to Know If You're Right for Self-Employment

Most people at one time or another have dreamed of being their own boss, but not as many actually give it a try. How do you know if self-employment is for you? Ask yourself these questions before taking the plunge:

Do I have enough self-discipline? If you're the type who can't keep a New Year's resolution to start waking up early and exercise before work, or who regularly waits until the overdue notices start rolling in before bringing your books back to the library, you might not have enough motivation to be your own boss for long. Getting your own business off the ground and earning a decent income takes lots of work: early mornings, late nights, weekends; a part-time or once-in-awhile commitment will yield, at best, a part-time or a once-in-awhile income.

Do I understand the business I'm getting into? Quitting your job to launch a party-planning service might not be such a great idea if you don't know the first thing about what it takes to plan and pull off a successful party. If a business idea appeals to you but you lack experience, consider taking some community college or adult education courses on the subject and gaining some hands-on know-how by taking a part-time job with someone successful in the field. Maybe you'll be a natural, maybe you'll hate the work. Isn't it better to know for sure before turning in your resignation?

Do I have the necessary money management skills? Not just the skill to balance your books and calculate proper taxes, but the ability to spend wisely and save when the income's rolling in so there's always a reserve on hand for the times when customers slow to a trickle or disappear. Because every business is almost certain to see slow times. If the idea of slashing your personal spending and stretching out every dollar in reserve during down times makes you crazy, entrepreneurship might not be for you.