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Six Stages of Self Employment

The psychological effects of becoming your own boss...

Much is written about the financial aspects of starting your own business, but making the switch to working for oneself is also a "life changing event", and like any other LCE, becoming our own boss does have some psychological ramifications.

Polling a random group of entrepreneurs found hanging around a local Starbucks (It was either that or AppleBees.), I've identified six emotional stages the newly minted entrepreneur can expect to pass through once he or she has taken the plunge.

They are:
Euphoria, Denial, Panic, Bargaining, Acceptance, Billing

Duration times may vary from one individual to another. Though these states may lead to some erratic behavior, none of them are inherently life threatening, provided you don't really tick-off those around you to the point where they want to put you out of your misery.

Let's take a closer look...

Stage One: Euphoria
Stage One symptoms are immediately apparent after you've "cut the cord" and decided to go out on your own. Depending on your reasons, you may hear yourself saying things like: "I'll never have to work for anyone else again", or "Finally, I can do things my way" or the ever popular "Who needed those losers..."

Later, visions of afternoons off, four day work weeks and never having to put up with office politics again dance through your blog. (Wow...you'll now have time to write a blog!) You're the captain of your own ship, the CEO of you, and your own personal hero as you set about actualizing your potential. You just can't stop gazing at your new business cards.

Stage Two: Denial
You refuse to alter your lifestyle to match your new circumstances: you still keep regular work hours, still buy extra large soy half decaf lattes and still drive that gas guzzling SUV.

But underneath it all, hairline fractures are appearing in that confident facade and little voices in the back of your head start whispering words like: defaulting, bankruptcy and destitution. (Funny how those little voices didn't say anything BEFORE you abandoned a steady income.)

Later, louder voices, usually belonging to a parent or spouse, will point out that you no longer have any health insurance.

Stage Three: Panic

Remember to exhale...


This Stage usually lasts somewhere between :02 seconds and forever, in fact it's at this point that many people get cold feet, chuck the whole idea and start frantically searching Monster.com, Craigslist and Laundromat bulletin boards for job openings.

Just as you're about to lose hope, however, there's a break in the clouds as you regain your composure and take an objective look at your new situation.

Stage Four: Bargaining
Once you stop hyper-ventilating, you begin to take those first few baby-steps towards gaining control of your life... which is why you're doing this in the first place, yes? Besides, it's too soon to turn back. You've told all of your friends about your great plans, probably burned a bridge or two, and you spent all that money on those friggin' business cards!

You start negotiating with yourself: I'll eat lunch at home when not meeting clients; I'll set up a work space in the bedroom instead of renting an office; I'll call everyone I've ever met and ask if they can refer any work to me, or at least buy me drinks.

Slowly, you get used to your new situation and you're ready for the first big breakthrough.

Stage Five: Acceptance
As those initial changes in behavior slowly take effect, you realize that, though this may not be the worker's paradise you had in mind, it's not hell either. Yes, you're working more hours, but they are your hours. Yes, each client is another person you have to answer to, but even the worst of them is only one of many. No one person has your fate in their hands except you. You have the ability to choose your own assignments and work at your own pace, and the freedom to try new things without getting written permission. Things may be messier than anticipated, but it's your mess and not one has imposed it on you.

You are now ready to enter to the Promised Land....

Stage Six: Billing:
It happens almost without notice. You keep working on something until there is no more work to be done. You send out that first invoice. You are flush with feelings of achievement (You actually finished something) and anticipation with every trip to the mailbox.

Finally the big day comes. Inside your mailbox is a nondescript envelope addressed to your new company containing your final vindication, the ultimate sign of acceptance, the brass ring at the end of the entrepreneurial merry go round, it contains...


Take a victory lap to the bank! You have in hand proof-positive that someone is actually willing to PAY you to do your own thing!

WARNING: For some, this is a dangerous time. Avoid the temptation to return to your pre-entrepreneurial ways...deposit the check and sit quietly in a dark room. Ignore the urge to buy friends dinner, fly to Rio or invest in an Amway franchise. You worked hard for that money...hang on to it for a while. Savor the moment. Later you can do something wild and crazy...like pay your electric bill.

And so the journey begins, you've completed the "rites of passage" and have successfully made the transition from "working stiff" to "captain of industry". Whether you stay with it or take another full-time job, become highly successful or have to move back in with your parents, only time and the IRS will tell.


6 Stages of Self Employment
Government Interference
Entrepreneurial Archetypes