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July 26, 2006
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Test the waters of self-employment without jumping in

The odds are that you will probably consider self-employment at some point: Eighty-nine percent of people in the United States who make more than $50,000 a year are self-employed, according to Entrepreneur magazine.

As with all decision points, the way to make the best choice is to know yourself. If you get bored easily, do a lot of different jobs. If you are a type-A hyperachiever, do one business really, really well. If you have a small tolerance for risk, keep a full-time job while you explore other options. All are great ways to make the shift to working for yourself.

One of the most interesting recipes for self-employment comes from self-employment evangelist Barbara Winter. Winter says that it’s easier to have five jobs that generate $10,000 a year than it is to have one job that generates $50,000 a year – the perfect scenario for opening an eBay business, renting out a room in your condo, writing press releases for your friend’s startup, etc.

This is, essentially, juggling five jobs, but Winter’s book describes ways of making it seem manageable: “The juggler walks out on the stage with ten sticks and ten plates, but doesn’t begin spinning them all at once. Methodically, the juggler positions the first plate on a stick and gets it into motion. Once done, the juggler moves on to the next, then the next, and so forth. Eventually, all ten of the plates are spinning away, each with its own momentum.” (This is how I feel about blogging – it’s like throwing another plate in the air for me.)

If you have spent some time in the workforce, consider becoming a consultant, which essentially is making a single, focused business out of yourself. “You should have at least five years of workplace experience before you go on your own,” says Laurie Young, founder of Flexible Resources, “because you are offering your experience.” Also, you need marketing skills to sell yourself. It takes a certain kind of talent “to show people you have skills they can use.”

Find a market niche that you can dominate. Otherwise there is no way to distinguish yourself from all the other consultants, no way to stand out. (Two good books on this: Small is the New Big, and The Long Tail.) Young did this herself, as a recruiter. She is a headhunter for people who want flexible jobs (she herself job shares the CEO position at Flexible Resources). If she were a more typical headhunter, she would not stand out above the crowd as well.

Alexandra Levit worked in public relations for Computer Associates and then struck out on her own, as a consultant in publicity and marketing communications. In terms of making the transition, Levit advises that you “try lining up a few jobs that you can have before you take the leap,” and be prepared to spend “about 30% of your time marketing yourself.”

Levit provides a snapshot of reality for all entrepreneurs when she says, “Don’t expect the drawbacks to be only financial. You need a lot of self-discipline to sit down in your home office and work without any external pressure. Working for yourself means you’re responsible for every aspect of the business,” and this means, ironically, even some of the annoying tasks you were trying to avoid by working for yourself.


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Comments

3 Comments »

Hi Penelope, great to see you out here in the blogosphere! Thanks for including me in this post. I’m going to link to Brazen Careerist, a great resource, from my Blogroll (Water Cooler Wisdom) at www.getthejob.com.

Penelope, My background is in manufacturing. I have some very creative product ideas that I would like to pursue as an entrepreneur. I have always wanted to go into business for myself and I think the time is ripe.

Problem, starting manufacturing business is extremly expensive, it takes at a minimum a small manufacturing site, etc.

Question, how do I get started? Whats next?

Thanks for the guidance!

* * * * * * *

Hi, Dale. For a business idea like yours, that requires significant startup costs, you need to write a business plan and create financial models to make sure the businss is viable. If it is, use the business plan to approach investors and raise money.

Good luck with your idea!

–Penelope

Hi Penelope,

Great to read your post on testing waters for self employment.

I am into software project management and quality assurance since last 5 years - before which I was a technical writer. I have identified my passion in form of writing - and I wanted to get into documentation and quality consulting business without leaving my day job. Your guidance in this would help me go a step further.

How can I go about it ?

Thanks, Pooja

* * * * * * * *

Try to get some clients on the side that you can work for at night. When you get good at rounding up clients for yourself, that’s when you can quit your day job.

–Penelope

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Penelope Trunk is a columnist at the Boston Globe and Yahoo! Finance. She has launched three startups and endured an IPO, a merger and a bankruptcy. more >

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