7 Prerequisites and Personal Suitability for Self-Employment - Becoming Self-Employed Step 1
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| Image by Gerd Altmann from Pixabay |
Among other things, it is about whether you are “born” for independence at all and which false expectations you should lay aside in order not to experience a rude awakening. In addition, I am talking about 10 important prerequisites for taking the step into self-employment.
In the end, there are two checklists for business start-ups.
What Do You Need to Start Your Own Business?
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| 7 Prerequisites and Personal Suitability for Self-Employment - Becoming Self-Employed Step 1 |
Of course, you cannot say in advance exactly whether someone is suitable for self-employment or not. This only becomes apparent after the first few months of self-employment.
However, some factors play a role in suitability and many requirements should be met.
I will go into some of these factors and requirements below and also describe my experiences from 15 years of self-employment.
Motivation for Self-Employment ?!
An important factor is the “motivation for independence”. Since this is usually at the very beginning of the considerations, I would like to deal with it here as the first.
By motivation, I mean the reasons that lead you to think about the subject of self-employment.
Unfortunately, I keep seeing entrepreneurs who startup for the wrong reasons or have the wrong expectations.
According to a somewhat older study, 31% of Germans consider self-employment to be attractive. That’s a lot more than really being self-employed. Only 17% of Germans who are not yet self-employed can imagine self-employment.
The main motivations here are independence and additional income opportunities. The former is misjudged by many because even if you are responsible for your working hours, you have many constraints depending on your independence.
A shopkeeper can only be flexible about his working hours to a limited extent. In the online area, there may be more options, but firstly you often have to focus on your customers and secondly, especially in the early years, you usually have so much to do that you can free yourself from flexible working hours and “when I feel like it ”Can't be the talk of the town.
Therefore, the reason for a better work-life balance needs to be questioned at least critically. Anyone who works 10-12 hours to build up their self-employment or who wants to build up a secondary business in addition to their actual job in their free time will have to fight for a better work-life balance rather than having it turn out to be a great advantage right from the start.
Unfortunately, I keep seeing entrepreneurs who just want to get out of unemployment or who want to bridge the gap until they retire. Both are certainly understandable, but not an ideal basis for long-term success.
Instead, you should want to be self-employed. You should look forward to all the work, as you can build something up with it in the long term. And you should be aware that self-employment has to pay off.
Successful self-employed people have visions and goals. This is the only way to keep your motivation and fun at work in the long term.
Or as I've described in other articles, fun and passion are extremely important.
Self-employment should not be a stopgap solution, even if it can help in the medium term to get out of an emergency.
Am I Suitable for Self-Employment?
The basic question is "Am I suitable for self-employment?"
If the “right” motivation is present, then that is already a good sign, but there are many other requirements that should be met.
7 Prerequisites for Self-Employment
The following 7 prerequisites should be given to successfully start a business. Of course, there are different forms.
While one is a perfect salesperson and has a strong personality in this regard, others (like me) may not be the salesperson types. It is therefore particularly important that you know your requirements and adapts your business idea accordingly.
In the example mentioned, it certainly makes no sense to start direct sales if you are not a salesperson.
The following prerequisites should therefore not only be seen as requirements but should also be used for honest self-analysis.
Personality
There is no such thing as the “one personality” you need to be successful. In addition, the term personality also includes a lot of aspects that are differently pronounced in each person.
In my opinion, the “activity” falls under it. So you are an active person who tackles problems instead of sitting them out. The question of how shy you are or how easy it is to approach others is one of them.
And the above-mentioned motivation or the ability to motivate is an aspect of personality. This can also be defined under the terms endurance or stamina.
And since people's personalities are quite different, you have to pay attention to your business idea and business plan. It should also be clear, however, that a shy person, who is also rarely able to motivate himself to active work, has little chance of successful self-employment. Just like someone who is quick-tempered and immediately takes criticism personally.
Technical Know-How
Very few start-ups fail at this point. Of course, you should have a certain amount of technical know-how. At least so much that you know more than your potential customers.
Anyone who wants to become self-employed as a landscape gardener and has never or only rarely worked in the garden need not be surprised at their failure.
Commercial Knowledge
A relatively large number of start-ups fail because of this requirement. The technical know-how is available, but the knowledge of how to earn money with it is not. It starts with incorrectly calculating one's hourly rate, continues with poor or non-existent marketing, and extends to a lack of service, etc.
The commercial knowledge and thinking is a very important success factor, affecting, for example, the issue of taxes. This, too, breaks the financial neck of many self-employed people after a few years.
At this point, you can also make do by outsourcing certain things to experts or, for example, founding them together with a partner. But more on that in one of the following parts.
Contacts
Contacts are just as important today as they were in the past, also and especially when you are self-employed on the Internet. Anyone who networks maintains a lot of professional contacts and knows people in their industry will have many more opportunities than those who just sit in their room and don't know anyone.
This is often a problem for young start-ups, as they have simply not been in these circles until now. But the Internet nowadays offers, for example, very good opportunities to actively make contacts (e.g. via Facebook groups or XING). Here too, of course, the point “personality” plays a role.
Family and Environment
The family plays an important role for those starting a business. It can be an important support, but it can also hinder your path. There are counterproductive family members, especially when they are self-employed on the Internet. Therefore, you should clarify with the most important family members (partner, children, parents) in advance what effects the independence will have.
In addition, you should never forget how important your family and your surroundings are and how to find a good balance.
Health
One shouldn't forget the subject of health. Self-employment is usually associated with more physical and psychological stress. On the one hand, this is due to the often significantly higher working hours, especially in the early days, and the associated stress.
Furthermore, as a self-employed person, you usually do not free up with small colds, etc. You should also not underestimate the psychological pressure that your independence can bring when you run out of money.
And since no one else earns money when you are sick, you should critically analyze your state of health and take precautions before starting your own business.
Willingness to Learn
Last but not least, you never stop learning as a self-employed person. Learning from one's own mistakes, in particular, helps the self-employed and you have to get up quickly after each defeat and move on.
I learned more in the first year of my self-employment than in my entire job before. But you have to be ready for that since especially after 10 or 20 years.
Here in the blog, you can find the supplementary article on other important prerequisites for becoming self-employed. This contains further explanations on the subject, albeit more about the daily self-employment and less about the business start-up itself. Understandably, however, there are of course a lot of overlaps.
The Dear Money
The issue of “money” is also important when starting a business. I would like to address this here separately because I consider it very important and often underestimated.
Starting a business is usually quite expensive. It's not even about large investments, which you often don't even need to be self-employed on the Internet.
But it should be clear to you that you need a certain amount of time to get your own business up and running. And “to run” in this context also means that it can take a long time to earn “enough” to be able to live on it. And until then you have to live and that regularly costs money.
In addition, entrepreneurs need advertising, hardware, and software, for example. That also costs money.
The Money Problem Can Be Solved in Different Ways
- With many start-ups, the partner with a regular income ensures that the difficult times are survived. Of course, you should calculate exactly whether you can make ends meet as a self-employed person with just one income and the initially irregular income.
- Anyone planning their independence for a little longer should build up reserves. If you are still employed and plan to go into self-employment in 1-2 years, you should put your money back regularly.
- Another option is, of course, to become self-employed on a part-time basis. Then you benefit from your income and can work on your own independence “on the side”. However, one should not underestimate the time factor here. A full-time job plus self-employment means little free time.
- To achieve a regular income as quickly as possible, you should create the best conditions for this in your own free time beforehand. References, contacts, your projects, etc. can shorten the start-up time and thus ensure that break-even is reached more quickly.
- As a business start-up, you should find out about subsidies. A combination of coaching and financial support helped me a lot in the first few months. But there is an extra part of this series on the subject of funding.
- In addition, one should act with foresight, because the self-employed do not own everything that comes into their account as money. So you usually have to pay the sales tax, health insurance, pension insurance, and income tax. Often there are also other regular costs. So you should plan for the long term and not hit everything on the head in the short term.
And I'll also write something in more detail on the subject of money. Another interesting effect of the lack of money is that it can be very motivating. However, it also has the opposite effect for some.
However, I was always very motivated that money was tight in the beginning. Even when I didn't feel like working, I still got up and did something.
So It Goes on
Step 2 is about your business idea, your business model, and the analysis of the current situation.
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