Last week’s jobs report from the Department of Labor showed 386,000 people left the labor force in August. That means—they’re no longer seeking employment.
The sluggish economy has taken its toll on American workers, however, many of those who have landed among the ranks of the unemployed are turning their plight around by becoming their own boss.
According to the 2nd Annual State of Independence report from MBO Partners, the independent workforce grew from 16 million in 2011 to 16.9 million in 2012. And 71% of the respondents say they enjoy a high level of satisfaction from being their own boss.
People who transition from no job to being the CEO of their own company are what I call “second chapter entrepreneurs.” While I don’t have any statistical evidence, I know that many of these new business owners are happier than they were in their traditional careers.
As one owner recently said to me, “If I hadn’t lost my job, I never would have done this. It was a blessing.”
But starting your own business is not right for everyone. Even with a dynamite business concept, if you’re heart isn’t into it, you’ll find it difficult to succeed.
So here are three key questions to ask yourself before you decide to “take the plunge.”
1. Why do I want to start a business?
When you’re in a career transition, starting your own business may seem like an ideal answer. You need a job so why not create one for yourself. But starting a business shouldn’t be a life preserver.
To succeed, you need to be passionate about your business idea and need a strong desire to make it work. Don’t jump into business for yourself if your only reason is to fill an income gap.
2. What are my lifestyle goals?
Starting a business isn’t like getting another job. Launching a business is really as much about a way of living as making a living. So you need to decide if, in addition to a career change, you’re prepared for a lifestyle change, too.
Think about what’s going on in your life right now. Think about your stage of life. There are many rewards to being an entrepreneur, but you need to be realistic and fully understand what you’re signing up for. You’ll be working nights, weekends, even holidays, when your employed buddies are taking paid time off. Does this lifestyle fit with your personal goals?
3. How resilient am I?
Many people go into business because they want to avoid the risk of being downsized again. I’m going to let you in on a little secret—there’s even less job security when you’re the boss. Of course you won’t fire yourself, but the majority of small businesses fail.
Are you the type of person who can bounce back quickly? Most successful entrepreneurs have experienced failure at some point during their journey. What makes them successful is their ability to learn from the experience and move on.
Bottom line: If you’re unemployed or thinking about “trying something new,” don’t just take a flying leap into entrepreneurship. Take baby steps. Have a heart-to-heart with yourself, do your research, draw up a solid business plan and breathe! Whatever you decide—it’s going to be OK.