JULY 2000 53
employment, and these indicators high- five-year period, the number of women-
light the growth of this employment pat- owned sole proprietorships, partnerships,
tern in recent years. For example. Dun and smaU businesses has increased from
and Bradstreet reports that annual new 4,1 miUion to 5 9 million, an increase of
business incorporations in the U,S, have 43 percent (Mehta 1997), The predomi-
risen from 685,572 in 1987 to 789,126 in nance of males in smaU business has
1997, Over the past five years, the been frequently attributed to men earn-
amount of venture capital invested in en- ing higher incomes and hence having
trepreneurial start-up firms has increased greater initial capital to invest in such
from $4 bUUon to $10 bUHon (Alsop enterprises. However, as females become
1997), Across the board, then, entry into a greater percentage of the workforce,
the career path of self-employment has self-employment becomes more attractive
accelerated dramaticaUy over the past to them as a means of balancing work and
decade (Wiatrowski 1994), family demands (Stephens and Feldman
In examining the reasons for this growth 1997), Also, some women may enter
in self-employment, previous research self-employment to avoid discrimination
focused on two issues in particular. One in the workplace (Carr 1996),
research approach examined the macro- The influence of the owner's age has
economic and structural factors which also been a focus of smaU business research.
affect the pursuit of these kinds of jobs. Perhaps surprisingly, self-employment is
For example. Dyer (1994) suggests that more prevalent among older workers with
periods of economic growth give rise to less education, who may be particularly
greater new business creation, while vulnerable to age discrimination (Leana
Leana and Feldman (1992) suggest that and Feldman 1992), It appears that these
increases in downsizing have led more older workers view self-employment as a
laid-off workers to consider self-employ- means of improving their economic status
ment as a career option. Indeed, Dennis outside large corporations, in which
(1996) reports that unemployed w^orkers selection and promotion are typicaUy
are about twice as likely to start new based on formal education credentials
businesses as employed workers. (Carr 1996; Case 1992), However, wide-
The second stream of studies has exam- spread downsizing has made the climb
ined the role of personaUty traits and demo- up the corporate ladder less attractive to
graphic differences in the decision to ne'w business school graduates as weU, so
pursue self-employment (Brenner, Pringle, that more and more young adults are also
and Greenhaus 1991; Cooper and Dun- becoming entrepreneurs or starting smaU
kelberg 1981; Kolvereid 1996a; Shane, businesses (Feldman andTurnley 1995),
Kolvereid, and Westhead 1991), For To date, however, there has been rela-
example, research suggests that the per- tively Uttle research on the career moti-
sonality traits most commonly associated vations of individuals choosing self-employ-
with self-employment are the need for ment and on the outcomes associated with
achievement, the need for control, and such career paths (Dyer 1994; Katz 1994),
tolerance for ambiguity (Dyer 1994; The present study investigates these two
Kolvereid, 1996b), key career issues. Using empirical data
In terms of demographic differences, from a national sample of the self-
gender and education have received the employed, iadividuals' motivations for
most attention. Males currently constitute entering self-employment are examined.
the majority of owners of smaU businesses, The "career anchors" typology of Schein
but the percentage of women entering (1978,1990) is used to determine which
these independent employment career "consteUations" of career goals, interests,
paths is rising steadily. In fact, over a and values attract individuals into, and
JULY 2000 55
workers might affect their career out- issues affecting smaU businesses. The
comes. In the second part of this study, NASE currently represents over 300,000
then, differences in job outcomes are small business proprietors nationwide.
examined among individuals who have
all chosen careers in self-employment Sample
but nonetheless have different levels of MaU surveys, along with seU?-addressed
satisfaction, psychological well-being, stamped return envelopes, were sent to
and so forth. Differences in career 850 randomly selected members of the
anchors may contribute substantially to association. Respondents were promised
those differences in career outcomes. confidentiality and anonymity. One hun-
Specifically, data were coUected on dred and fifty-three (153) surveys ^were
self-employed workers' job satisfaction, returned, for a response rate of 18 per-
overaU life satisfaction, psychological cent. Although this figure is somewhat
well-being, degree of skiU utilization, and lower than those found in typical survey
intent to remain self-employed. Since one research studies, it compares favorably to
of the main motivations of those entering NASE's own survey of its membership in
self-employment is to have more positive 1996, which yielded a 10 percent
attitudes toward their work, job satisfac- response rate.
tion is an important outcome to consider The sample mirrors important attributes
(Jamal 1997), SimUarly, since many individ- of the NASE membership and the national
uals choose self-employment as a means population of smaU business proprietors.
of balancing work and famUy demands For example, 60 percent of aU NASE
(Carr 1996), measures of overall life sat- members have average annual business
isfaction and psychological weU-being incomes of under $100,000; in this sample,
should tap the success of self-employment 58 percent had an average income of under
at meeting those goals. For those individuals $100,000, In both the NASE membership
who enter self-employment for greater and in this sample, the vast majority of
opportunities to be creative or to better smaU-business proprietors (88 percent)
utUize their talents, a measure of skill uti- had fewer than five employees.
lization is also an appropriate and valu- In terms of demographic data, the pre-
able criterion. Last, a measure of intent to sent sample was 66 percent male,The age
remain self-employed may tap both satis- distribution of the sample was as foUows:
faction with self-employment and per- 21-29 years (four percent); 30-39 years (25
ceptions of self-employment as econom- percent); 40-49 years (36 percent); and 50
icaUy viable in the long run. or older (35 percent),This mirrors national
data, which suggest that self-employment
Method is predominantly a mid- or late-career phe-
Data Source nomenon, with roughly one-third of the
The data for this study came from the self-employed being 50 years or older.
membership Ust of the National Associ- The average respondent had been work-
ation for the Self-Employed (NASE), ing fuU-time for 23,5 years and had been
Founded in 1981, NASE is a non-profit self-employed for 10.3 years. Forty-eight
organization which provides its members percent of the respondents worked out of
with a variety of benefits: a toU-free smaU an office in their homes, and 52 percent
business hotUne, legislative advocacy at had an outside office or business location.
the federal and state levels, discounted The vast majority of the respondents
car and truck leases, office equipment (77,5 percent) served a local or regional
discounts, insurance services, and a market with their product or service.
bimonthly newsletter that highlights
JULY 2000 57
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JULY 2000 59
Psychological well-being was measured among individuals' career outcomes with
using Warr's (1978) 17-item scale (mean= respect to their career anchors.
2.94; standard deviation=0.44; alpha=.82). Subsequently, a series of one-way
Respondents were asked to indicate the analyses of variance (ANOVAs) were con-
frequency w^ith which they experienced ducted to determine the specific ways in
feelings such as loneliness, depression, which different career anchors impacted
and apathy. Skill utilization w^as measured different career outcomes. The results of
using tw^o items taken from O'Brien these analyses appear in Table 2.
(1980). A sample item is: "My job gives As can be seen in Table 2, individuals
me the chance to do the things I do best" who are pursuing self-employment out
(mean=4.03; standard deviation=0.93; of a desire for entrepreneurial creativity
alpha=.77). Intent to remain self-employed have higher levels of job satisfaction and
was measured using four items based on psychological well-being, as well as high
Feldman and Thomas's (1992) scale levels of overall life satisfaction. Individuals
(mean=4.27; standard deviation=0.70; w^ho are pursuing self-employment out of
alpha=.80).A sample item is: "I am going a desire for autonomy and independence
to remain self-employed, no matter what report the highest levels of skill utiliza-
the problems are." tion, intent to remain self-employed, and
The first relationship examined was life satisfaction. In contrast, those entering
that between the career anchors and self-employment to maximize security
career outcomes. A multivariate analysis and stability systematically had the least
of variance (MANOVA) was performed with successful career outcomes.
career anchor as the independent variable ANOVAs were also conducted to test
and the five career outcomes as depen- for differences in outcomes due to
dent variables. The MANOVA revealed a demographic variables. The results on
statistically significant relationship the effects of the demographic variables
(Wilks' Lambda=.84;F=2.l6;p<.05); that were generally smaller in magnitude and
is, there were significant differences did not suggest systematic effects across
Table 2
Analysis of Variance:
Differences in Career Outcomes across Career Anchors^
Autonomy and Entrepreneurial Security and
Career Outcome Independence Creativity Stability
Job satisfaction*** 4.24 4.38 3.92
life satisfaction** 3.78 3.77 3.36
Psychological well-being** 2.97 3.01 2.76
Skill utilization* 4.20 4.08 3.70
Remain self-employed*** 4.40 4.28 3.87
JULY 2000 61
(1) started a small business with a "My greatest difficulty is getting
spouse or fortner colleague or a "paired out of the office for family time..."
business" to avoid partnership problems;
(2) increased networking activity in pro- "It's more difficult taking time
fessional associations and local business off for my children's activities."
groups like the Chamber of Commerce; "The greatest difficulties: being
and (3) operated the business from a on call 24 hours a day, working
work office rather than from home. all the time and never having
Two other patterns emerged from time to catch a wave at the
respondents' comments on this issue. beach."
First, self-employed individuals in mar-
keting, sales, and customer-oriented busi- "There's no difference between
nesses found it easier to balance job Monday, Wednesday, or Sunday
autonomy and social isolation than did .. .you can't get away—eveif'
their colleagues in high-tech or comput- "The greatest difficulties: manag-
er-related businesses. This was largely ing my time and my workload
because these jobs require greater social ... having to work when others
interaction on a day-to-day basis. Second, don't (nights, weekends, holidays)."
self-employed individuals w^orking in
rural and semi-rural areas had more diffi- The participants in our study man-
culties balancing these tradeoffs since aged these tradeoffs in a variety of ways.
their daily lives generally involved sigtuf- For some, it was learning ho'w to say no
icantly less social contact. and not promising clients too much. As
one of our respondents noted:
Balancing Increased Scheduling "(Now) I don't overpromise and
Flexibility with Decreased not deliver, both of which create
Vacation and Time Off huge amounts of stress and
A second major issue faced by the lower others' expectations of me
self-employed is the tradeoff between and my work."
increased scheduling flexibility and the
lack of extended vacation time and real For others, it was having hard and fast
time off For many, the ability to work rules about time off from work:
when they want is a major attraction of "/ leave work every day by 4:30
self-employment: and always take off one after-
"Self-employment allows me the noon each week."
time and flexibility to focus on
relationships that mean the "Sunday is a day off. It is set
most to me: my family, in-laws, aside for family and friends. This
and friends of choice rather has not changed in 8 years, nor
than expediency." will it."
JULY 2000 63
from successive threats of layoffs and was participation in training programs to
downsizings. Ironically, however, many of develop better personnel and financial
the newly self-employed discovered that management skills. For still others, it was
their biggest challenges were recruiting taking greater advantage of governmental
and developing their own employees, support services (such as Small Business
dealing with taxes, paperwork, and regu- Development Centers) and not-for-profit
lations, "cold calling" and developing a organization services (such as NASE) to
new cUent base, and dealing with angry obtain help in managing personnel and
or unpleasant customers: selling/marketing new services. For
"My greatest difficulty: wearing almost all the participants in our study,
too many hats! I am now TIRED though, there were some unexpected
of cold calls and getting work," surprises and challenges in staffing, mar-
"The negatives: constantly being keting, and managing new enterprises.
'on'—that is, selling yourself,
maintaining appearances—no Limitations
such thing as 'having a bad day' of the Research
excuse,,,"
While these results improve our under-
"It has taken me a while to finally standing of career issues in self-employ-
set up a solid management team ment, there are four reasons w^hy the
to release me from the daily findings should be viewed cautiously
grind of running the business," First, the data in this study were obtained
exclusively from self-employed members
"The biggest negatives: finding of NASE. While NASE represents a large
good people to work for you, number of small business people working
keeping good people working for m a wide array of businesses. Its member-
you, piles of paperwork and red ship Is not necessarily representative of
tape, hiring bad people and fir- the general population of self-employed
ing bad people," workers. For example, self-employed
"Managing the office is the hard- people who work "off the books" in
est part—insurance, worker's small cash businesses or self-employed
compensation, unemployment, individuals temporarily forced into this
local licensing, state regulations kind of work are not likely to be repre-
and taxes, federal taxes, job per- sented. Self-employed people who do
mits, county inspections, and not have or need the benefits offered by
many others ,,," NASE would be less likely to be part of
the organization as well (for example,
"The biggest negatives: not finding doctors, lawyers, architects, and others
young, educated, and motivated with professional affiliations). Thus, the
people,,, (Many) are lazy, unmo- results obtained here may not fully gen-
tivated, brain-dead products of eralize to all self-employed workers.
today's educational system," A second limitation of this research is
that since the data w^ere obtained via self-
Several respondents had developed report responses, common method vari-
some effective strategies for dealing with ance could have inflated the findings.
these problems. Eor some, the solution Research relying more upon archival and
was greater use of financial consultants, longitudinal data would allow^ greater
accountants, and employment agencies confidence in the conclusions.
to deal with the logistics of personnel Third, the present sample largely con-
hiring and bookkeeping. For others, it sists of self-employed workers who are
JULY 2000 65
This research also furthers our under- References
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JULY 2000 67