Becoming Self-Employed: The Key Questions to Ask Before You Start

Britt Tang had an attractive working life in many ways. 

She worked as an environmental specialist, a job she had dreamed of since she was a child. 

She was happy with her colleagues and had exciting and meaningful tasks, but at the same time she felt exhausted after work every day.

"If I'm in a busy and fast-paced workplace, I run with it, because I can do that, and I'm good at juggling many things. But at some point, I just end up burning myself out," says Britt Tang, who is a trained environmental chemist. 

"It's been like this in all the jobs I've had. I've ended up feeling trapped." 

When she began to experience serious stress symptoms, she therefore chose to become a self-employed environmental consultant part-time in 2020 to gain more flexibility and resources for her family and herself. 

When a major consulting firm contacted her two years later with an offer to become a department manager, she couldn't say no, and she once again ended up in a large and busy organisation. 

"The downside of being your own boss is that you don't have any colleagues, so it was very attractive to be able to join a large department and become part of a professional environment. And then it was also a great role to become a department manager," she says.

After two years, however, Britt Tang had to admit that she felt trapped in her work again. 

"I had stepped into the same machine, and I ended up losing my mind again," says Britt Tang, who took the consequences and became self-employed again.

She rented a small office in Roskilde and made it feel like a home with art on the walls, a record player, green plants and a large periodic table. 

The large international projects were replaced with a daily routine of mostly has smaller, more limited tasks, and the buzzing open-plan office has now been reduced to three part-time employees, whom she has hired herself.    

"I have a much simpler workday now, and it works really well for me. I also have a closer relationship with my clients, and it's very meaningful for me to have that contact," she says.

Every tenth IDA member would like to be self-employed

For many IDA members, becoming self-employed is an attractive career path.

In a survey, 12 percent responded that they would like to be self-employed, while 19 percent wanted to combine their primary employment with a side job. 

The survey also found that self-employed people are more satisfied with the content of their work than regular employees, regardless of whether it concerns influence on their work, meaning in the job or the opportunity to use their skills on a daily basis.

As a career counsellor at IDA, Morten Esmann often speaks with members who want to be self-employed, and he explains that they can be roughly divided into two groups. 

"The first group dreams of more flexibility and freedom in everyday life, and therefore they would like to start a sole proprietorship and work as consultants, where they can determine the terms of their work to a greater extent."

The second group is more inspired by programs like The Lion's Den and the idea of ​​starting a business and developing a successful product, explains Morten Esmann.

Regardless of which type they belong to, Morten Esmann tries to "push them a little" to find out how deep their motivation runs. Because, along with a good financial foundation, motivation is necessary to be successful as an independent entrepreneur.

"When you're sitting here in six months and customers aren't coming through the door, and you're earning half of what you used to, you need to have a really good reason to keep going," says Morten Esmann. 

The most important thing, according to Morten Esmann, is that the leap into self-employment should be an active choice and not an escape from a slavish boss or work culture.

"If you lack flexibility, you might also be able to get it by changing to another job, and if it's about earning a lot of money, it's not always easier to be self-employed than to be an employee. In any case, there is no guarantee that more money will roll into your account," explains the career counselor.

There is also a lot of menial work and routine tasks in life as a self-employed person that do not necessarily align with the dream of a working life with more freedom.

"You should expect to spend up to a quarter of your working time on administrative tasks, invoices, accounts, IT hassles and everything else that has nothing to do with your professional skills, and for some it can stifle the feeling of freedom a little," says Morten Esmann.

He doesn't want to discourage anyone in advance, because trying your hand at being self-employed can lead to both an exciting working life and personal and professional development. However, he encourages people to reflect on five things before taking the plunge. 

• Why do you want to be self-employed? It doesn't matter if your goal is more freedom, higher pay, or the ability to solve a certain type of task. It just needs to be clear to yourself so that you have an ambition to aim for.
• Can you best fulfill your desires by becoming self-employed? Or can you, for example, gain more flexibility by changing to a job with less responsibility or a higher income by seeking a promotion?
• Do you enjoy being self-employed? With your own company, there is a wide range of tasks in addition to your core tasks. These can include administration, sales and purchasing of IT solutions, which you have to handle yourself.  
• Do you thrive on uncertainty? It can be nerve-wracking to jump into becoming self-employed, but it shouldn't be so stressful that you break your neck. If you struggle with uncertainty, why not prepare yourself more before you take the plunge?
• Do you have a solid financial foundation? Becoming self-employed is financially uncertain, so you need to be able to handle a period of reduced earnings and have agreed this with your family. 

Financial worries are more prevalent among the self-employed

When Britt Tang became self-employed, she was worried about losing her colleagues and missing out on exciting projects. But the economy didn't keep her awake at night.

"It's probably not normal to be so calm about it, but I haven't had any financial worries at all. I had good savings, and as a person I take it one day at a time, and I think that's a huge advantage for me as a self-employed person," she explains. 

But for the self-employed, financial worries are generally more prevalent than for employees. In IDA's questionnaire survey, several self-employed people answered that they are worried that they are not saving enough for retirement and whether they will be able to maintain their income in the future.

If you are considering becoming self-employed and are worried about finances, career advisor Morten Esmann's best advice is to set a number of interim goals.

"You won't get rich right away, but you can set some realistic goals and then take stock every three months." 

"After three months, the goal can be to have your first client, after six months you should have more clients, and after nine months you should have covered your expenses, and then you work your way up to earning money." 

“How long-term your plan should be depends on how big your savings are and risk-willing you are,” says Morten Esmann.

He emphasizes that it is always only the member themselves who can assess whether they are ready to try their hand at self-employment. But if they have a solid plan and a desire to try something different in their working life, he encourages them to take the plunge.

"Would you like to have more flexibility and be your own boss? Then go for it. You just have to make sure you have the motivation and financial foundation in place."

If you ask Britt Tang, she doesn't think she'll be tempted to become an employee again. She values ​​the flexibility, the time with her children and the feeling of being able to make decisions based solely on her own values ​​too much.

"In my last job, I had a good boss who sent me to an occupational psychologist, and she told me that you have to find a job that suits your personality. I feel like I've done that now."