4 types of people who make poor entrepreneurs

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(MoneyWatch) Thinking about going to work for yourself? While entrepreneurship has many perks, like having no boss and working on projects you're more passionate about, some kinds of people are better working for someone else. Here are four examples:

People who hate risk. Going into business on your own is a risk that can be controlled by making smartly calculated decisions, but there will always be the danger of failure, and fear of failure can damage a new business. "Risk-averse individuals that take any level risk will often... be paralyzed by the stress of the day-to-day tidings of what's needed to grow a business," said Scott Gerber, founder of the Young Entrepreneur Council.

People who love their lifestyle. Savvy owners of a new small business know that cutbacks in spending may be necessary, especially early on. "Your time, money, and resources must be committed to your essential lifestyle requirements and your business -- that's it," Gerber said. Examples of shrinking resources could include moving into a smaller apartment, delaying having children or even something as simple as cooking more instead of eating meals out. If you're not willing to make sacrifices, working for yourself may cause more pain than pleasure.

People who need a bi-weekly paycheck. People who can't live without their steady income may not thrive as entrepreneurs. "It may take months to earn your first paycheck," and that's if you're lucky, Gerber said. And even if you do get paid, it could come in spurts. "You may earn all of your annual income within two months out of the year and have to use spread out your payment disbursements to maintain your monthly cash flow needs."

People who enjoy taking direction. Some great employees make terrible entrepreneurs. A prime example is those folks who can execute someone else's vision perfectly, but lack their own ideas or self-starter attitude. "Even introverted founders need to be able to set the company's direction, develop a strategy and delegate responsibilities to employees or contractors," Gerber said.

  • Amy Levin-Epstein On Twitter»

    Amy Levin-Epstein is a freelance writer who has been published in dozens of magazines (including Glamour, Self and Redbook), websites (including AOLHealth.com, Babble.com and Details.com) and newspapers (including The New York Post and the Boston Globe). To read more of her writing, visit AmyLevinEpstein.com.

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