How to be an entrepreneur

Losing your job is the worst. Even if you didn’t like your job or the company, and even if you understand why layoffs may be necessary, being shown the door is upsetting. But there is a way to ensure that you never get laid off again – start your own business.

Even if you think you don’t have the requisite knowledge or experience, you have likely developed skills that other people or companies will pay for – it’s just a matter of setting yourself up and getting the word out. How to overcome imposter syndrome as an entrepreneur is something nearly every new business owner faces, and knowing you're not alone is the first step.

Determine what kind of business you want to start

In broad terms, there are two ways to go about starting your own business; you can continue your current career, just working for yourself, or you can go off in a completely different direction. If you don’t know which one to choose, give some thought to what each might look like.

If you want to continue to do what you’ve been doing, understand that even though companies may be laying off full time employees, the work still has to get done. How do they make sure that happens? They bring in contractors or consultants to do just the work that’s needed, without paying benefits and other overhead costs. Big tech layoffs are a perfect example of this – that software still needs to be developed, so tech titans will bring in contractors to do the work of those they laid off. These 9 rookie consulting mistakes could cost you big — so if you're considering the consulting route, make sure you go in prepared.

If you want to do something completely different, you may already have a business in mind, even if it’s not quite a business yet. The Hiscox Side Hustle to Small Business podcast features guests who started a business on the side and then turned it into a full-time job.

Further Reading: Who Becomes an Entrepreneur?

• Do you know what makes a successful entrepreneur?
• 10 Important personal characteristics of entrepreneurs
• Characteristics of successful entrepreneurs: Commitment
• Characteristics of a successful entrepreneur: Hands-on involvement
• Characteristics of successful entrepreneurs: Continuous improvement
• Dream big! Devoted entrepreneurs now helm Fortune 500 companies 

Start with a side hustle

Often, a business starts as side hustle and grows into a full-time business. If you do something on the side, consider whether you could make that your primary job. It may not even be something you’re getting paid for right now. A lot of people find they are the ‘go-to’ for certain things among their friends. Are you the one everyone asks to review their resume before they send it out? Resume and cover letter help is big business, which sometimes grows into career coaching.

Brie Sodano had a fun, fulfilling job as the director of a Boys and Girls Club. As interesting and important as her job was, it didn’t pay a whole lot. So she taught herself how to trade stock options to generate some extra cash. When doing both of these things got to be too much, Brie decided to become a financial advisor. She found that a lot of her clients needed help with the basics: budgeting, reducing debt, etc. So she started Sheep to Shark to teach the strategy of money, how to create good money habits, and how to manage the emotions around money. “I don’t sell investments,” Brie says. “It’s just really helping people get out of their own way in their relationship with money.”

Data from the Infographic: Turn your side hustle into a small business study shows that on average, entrepreneurs spent 20 hours per week on their side hustle before going full-time — and it took about 19 months before they felt ready to make the leap. If you're wondering whether you have what it takes to make that transition, you're not alone.

Further Reading: Side Hustle & Early-Stage Entrepreneurship

• How to be your own boss (and avoid layoffs for good)
• Buying a small business vs. starting your own: Navigating your entrepreneurial journey
• Creatorpreneurship isn't a vibe, it's a business. Here's how I learned to treat it like one.
• How a lawyer turned her love of yoga into a business
• Former teachers turn passion for art into full-time career
• Marine veteran turns his craft into a small business 

Find your passion

Your business doesn’t have to be in the same industry you’ve been working in. Sometimes a company is born from a passion that has nothing to do with a ‘day job.’ Rob Friedman of Pitching Ninja started his career as an attorney in a big law firm, but his passion has always been baseball – specifically pitching. He started analyzing video of pitchers and posting it on social media. Today, he has 400,000 Twitter

followers, 100,000 Instagram followers, and his own merch store. He is also starting a new website called FlatGround to help aspiring pitchers get noticed.

Friedman started Pitching Ninja because of his love of the game – and of technology. “I’m a fan as well as a coach, as well as a technology guy. So, there’s technology, physics, all that stuff involved, which is fun to unravel.”

Take the leap Angle Hendrix of NC Solution Group was in the insurance business, and started a side hustle as a Notary Public, primarily doing real estate closings. She began to partner with real estate attorneys to increase the number of closings she could do in a day, building the business to the point where she had to make a choice to make the notary business her full time job. “As an entrepreneur, you just never know. That season may not be there. So, if I’m going to take the leap, I have to do it now while things are hot. Because I may not get this opportunity again.”

Take the leap

At some point, if your side hustle or business idea is going to become a real business, you have to commit to it fully. That means setting real goals, making a plan, and holding yourself accountable. Characteristics of successful entrepreneurs: A step-by-step guide to creating SMART business goals is an excellent resource for turning vague intentions into actionable milestones. Achieve any goal with organization takes that even further, offering a holistic approach to aligning your goals with your values and your workflow.

It also helps to know that countless entrepreneurs have walked this road before you — and succeeded. Top 5 challenges of entrepreneurs and how to overcome them breaks down the most common obstacles and gives you a framework for pushing through them.

Further Reading: Goal-Setting & Growth

• Characteristics of successful entrepreneurs: A step-by-step guide to creating SMART business goals
• Achieve any goal with organization
• Why redefining success is the ultimate business growth strategy
• Top 5 challenges of entrepreneurs and how to overcome them 

Starting from scratch

If you're starting a brand-new business rather than spinning off your existing skill set, you'll need to do more upfront planning. You'll need to determine your market, your pricing, your operations, and how you'll get customers. This is where many new entrepreneurs benefit from a mentor. How to harness the power of business mentors outlines how to find the right mentor, what to expect from that relationship, and how to make the most of the guidance you receive.

No two entrepreneurs take the same path. Some are mompreneurs juggling childcare and cash flow. Others are veterans bringing military discipline to business operations. Some are encore entrepreneurs launching their first company after a decades-long career. Regardless of your background or starting point, there's a community and resources available to you. 

Be prepared to work hard

Running a business is not a passive endeavor. You'll wear many hats — especially at the start — and you'll need to stay on top of operations, finances, marketing, and customer service all at once. Technology can help. The best apps for small business owners in 2026 and Are you using the right technology for your small business? are both great starting points for building a lean, efficient tech stack. 3 Practical ways small businesses can benefit from automation can also help you reclaim time by automating repetitive tasks so you can focus on growth.

That said, hard work has to be sustainable. Do this, not that: How entrepreneurs can obtain more work-life balance is a must-read for anyone who finds themselves burning out before their business has a chance to take off. And for wellness professionals specifically, Well-being pros: Balancing client care and risk addresses the unique challenges that come with running a care-based business.

Further Reading: Running the Day-to-Day

• The best apps for small business owners in 2026
• Are you using the right technology for your small business?
• 3 Practical ways small businesses can benefit from automation
• Do this, not that: How entrepreneurs can obtain more work-life balance
• Everything you need to know about the SHRM-CP certification for HR professionals

Protecting your new business

Once you've launched your business, protecting it from unexpected risks is crucial. Whether you're working as a consultant, contractor, or running your own company, business insurance safeguards the venture you've worked so hard to build. If you're providing professional services or advice, professional liability insurance (also called errors and omissions insurance) protects you if a client claims your work caused them financial harm. This coverage is essential for consultants, freelancers, accountants, IT professionals, and anyone offering expert guidance. If you meet with clients in person or work at client locations, general liability insurance covers bodily injury and property damage claims. Many client contracts require proof of insurance before they'll work with you, so having a certificate of insurance ready can help you land projects faster. Don't let one lawsuit destroy the business you've built after leaving your corporate job. Get a free quote to see how affordable protection can be.

Further Reading: Risk & Protection

• Well-being pros: Balancing client care and risk
• These 9 rookie consulting mistakes could cost you big

Making the transition from employee to business owner

The psychological shift from employee to business owner is real. You go from having a boss set your priorities to being entirely responsible for your own direction. This can be liberating — and overwhelming. Finding a strong support network makes all the difference. Mentors, peer communities, and even formal coaching programs can help you stay grounded during the transition.

Women entrepreneurs, in particular, have built powerful peer and mentorship networks that are reshaping the business landscape. C-suite Sisterhood: The rise of female mentorship programs, The rise of women entrepreneurs, and 4 Major trends in women's entrepreneurship all document how the entrepreneurial landscape is shifting — and how women are leading the charge.

Further Reading: Women in Entrepreneurship

• The rise of women entrepreneurs
• 4 Major trends in women's entrepreneurship
• C-suite Sisterhood: The rise of female mentorship programs
• 5 Smart business pitch strategies for women entrepreneurs
• 5 Lessons from women entrepreneurs who were pioneers in their time
• The mother of invention: 5 steps to becoming a mompreneur

Frequently asked questions

When should I quit my day job to focus on my business full-time?  

The right timing depends on your financial situation, business momentum, and risk tolerance. Many experts recommend waiting until your side business generates 50-75% of your current salary consistently for at least 3-6 months. Build an emergency fund covering 6-12 months of living expenses before making the leap, as income can be irregular initially. Consider your health insurance situation. If you rely on employer coverage, research alternatives like COBRA, spouse's insurance, or marketplace plans before quitting. Evaluate whether your day job provides skills, connections, or resources that benefit your business. If client demand is strong and you're turning down work because you lack time, that's a clear signal you're ready. However, if your business idea is still untested or revenue is sporadic, keep the day job while validating your concept. Some business owners negotiate part-time arrangements with employers to ease the transition rather than quitting cold.

What business structure should I choose when starting out?  

Most new business owners start as sole proprietors because it requires no paperwork and costs nothing to establish. However, sole proprietorships offer no liability protection so your personal assets are at risk if someone sues your business. Forming an LLC (Limited Liability Company) provides personal asset protection and costs $50-500 depending on your state. LLCs also offer tax flexibility and increase credibility with clients. If you're providing professional services like consulting, forming an LLC and carrying professional liability insurance together provide strong protection. Corporations (S-Corp or C-Corp) make sense for businesses planning to raise investment capital or those with multiple owners, but involve more complexity and paperwork than most solo entrepreneurs need initially. Start with the simplest structure that provides adequate protection, and upgrade as your business grows. Consult with an attorney or accountant to determine the best structure for your specific situation.

How much does it cost to start a consulting or service-based business?  

Service-based businesses typically require less capital than product-based businesses. Essential startup costs include business registration fees ($50-500 for LLC formation), business insurance ($500-2,000 annually depending on coverage type), website and domain ($100-1,000), basic office supplies and equipment ($500-2,000), and professional services like accounting or legal consultation ($500-2,000). Many consultants start for under $5,000 total. Your largest ongoing expense will likely be insurance premiums, particularly professional liability coverage if you provide advice or specialized services. Marketing costs vary widely based on your strategy. LinkedIn and word-of-mouth cost nothing, while paid advertising or attending conferences can cost thousands. If you already own a computer and phone, your barrier to entry is quite low. Many successful consultants bootstrap their businesses using savings rather than taking loans, which keeps overhead minimal and avoids debt.

Do I need business insurance if I'm just starting out as a freelancer?  

Yes, even freelancers and solo consultants need business insurance from day one. Many clients won't sign contracts without proof of insurance, so lacking coverage means lost opportunities. Professional liability insurance (E&O insurance) protects you if clients claim your work or advice caused them financial harm. This coverage applies even when claims are baseless, covering your legal defense costs. If you meet clients in person or work at their locations, general liability insurance covers bodily injury and property damage claims. For example, if a client trips over your laptop bag during a meeting, general liability covers their medical expenses. Consultants, designers, IT professionals, accountants, and anyone providing professional services should have professional liability coverage. The cost is typically $500-2,000 annually—far less than defending a single lawsuit. Insurance also demonstrates professionalism and preparedness to potential clients.

More Inspiration: Real Entrepreneur Stories

• How a lawyer turned her love of yoga into a business
• Former teachers turn passion for art into full-time career
• Marine veteran turns his craft into a small business
• Spotlight on Vetrepreneurship: How Warrior Rising gets results
• Five African American entrepreneurs whose businesses also impact their communities
• Dream big! Devoted entrepreneurs now helm Fortune 500 companies
• Creatorpreneurship isn't a vibe, it's a business. Here's how I learned to treat it like one.

Learn more about starting your own business

Business insurance 101: Everything you need to know – Get comprehensive guidance on business insurance basics, including coverage types, costs, and how to build a complete protection package for your new business.

Why your LLC needs small business insurance – Discover why forming an LLC isn't enough to protect your business assets and learn how the right insurance coverage safeguards both your company and personal finances.

What is professional liability insurance? – Understand how professional liability insurance works, what it covers, and why it's essential for consultants, contractors, and anyone providing professional services or advice.