Self Employment

Today, more people than ever are considering self employmentto build their financial freedom. According to a study bySBA(Small Business Administration), 12.2 millionAmericans -- about 10 percent of the nation's work force -- wereself-employed in 2003. Itis expected to be the greatest area of employment growth in futureyears.

So why do people want to start their own business? There aremany good reasons and here are just some of the reasons people give forgoing into business for themselves:

• Downsizing of large corporations.
• Independence and flexibility. There is no need to worryabout laid-off and you are free to take time off and spend time withyour family.
• Freedom and job satisfaction. Self-employment allows you todo the job in your own way and be responsible for your own success (andfailures!).
• Challenges. Running a business provides endless challengeand opportunities for learning.
• More money. In the best selling book <<Themillionaire next door>>, the authors claim thattwo thirds of millionaires who are working are self-employed.

However, these good reasons of starting a business are oftenmixed with unrealistic expectations and we have all heard the bad newsabout business failure. According to the SBA, one in three new businessfail within six months; three of four start-ups shut down within fiveyears; and nine out of ten companies operating today will ceaseoperation eventually.

So why do businesses fail? In his book SmallBusiness Management, Michael Ames gives the following reasonsfor small business failure:

• Lack of experience.
• Insufficient capital (money).
• Poor location.
• Poor inventory management.
• Over-investment in fixed assets.
• Poor credit arrangements.
• Personal use of business funds.
• Unexpected growth.

Some other reasons might also include:

• Owner's personality not suited to run a business.
• Poor choice of business opportunity.
• Failure to seek professional advice.
• Low sales.

These reasons aren't meant to scare you, knowing some of thesepitfalls before you start your business can help you avoid them.

For more information about self employment, click on thefollowing links:

• SelfAssessment - Do You Have What It Takes?
• WritingA Business Plan
• ChoosingA Business Entity
• Funding A Business
• SelfEmployment Deductions