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5 things to consider before you decide to work for yourself

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Posted at 4:34 PM, Mar 22, 2022
and last updated 2022-03-22 16:35:52-04

About 400,000 more Americans are now working for themselves than when the pandemic started, according to numbers from the Labor Department.

“What's interesting is that in both good economies and bad this happens, but for different reasons, when you look back to 2008 people became self-employed, because there were no jobs,” said Julie Bauke, Chief Career Strategist at The Bauke Group.

Now it’s the opposite – with a hot hiring market, people have a cushion to fall back on if self-employment doesn’t work out.

But job experts say there are still a few key things you should ask yourself before taking your career in this direction:

  • Is this something you want to pursue until you retire?
  • Is it just a stop-gap between jobs?
  • Do you have at least six months of savings to support yourself as it gets off the ground?
  • If you’re offering a service, are you able to recruit clients?
  • Is there a market for what you want to do?

“You might be really good at repairing typewriters,” Bauke said. “But if there aren't a bunch of people out there with typewriters to be repaired -- and I’m guessing there isn't-- you're not going to do well. So understanding truly what the demand is for what you do, who your competition is and what's your stomach for this taking, for this to be a long runway,” she said.

Health care is also a big thing to consider.

If you’re coming out of retirement and are 65 or older, health care is covered.

If you have a partner whose job will extend benefits to you will also work in your favor.

But if neither of these applies to you, be prepared for that to be a big expense.

“Working for yourself definitely means you get the rewards, but it also means that you get all your all the headaches,” Bauke said.