There is a quick and simple test to determine if you are ready for this step. First, know that it's not really about working for yourself—so you're asking the wrong question.
The question should really be: When do you know it's time to work for others?
To be successful in your own business, you simply have to have an intense focus on working FOR your customers and prospects. In other words, it is not about you; it's about them. It's not about you simply making money—it is serving them that will bring you what you need.
Too flip? Then here is the simple, unmitigated truth and an answer to your question: If you see a problem that others are having, whether it is opening a too-tight pickle jar or ordering movies online, and you can solve it ... you might have an idea that is worth pursuing.
The next big question: How bad is the pain? If it is big enough, then people might well pay for your solution. (They don't even need to recognize that the pain exists before you tell them, either.)
But it is not enough that your new widget solves their "pain." You need to be able to communicate it to your prospects.
Try this out on your friends and family first. They will listen to your idea, and they almost always agree that, yes, they would buy this new widget from you.
Then find five random people, and tell them about your new widget. If THEY would buy, you might just have something. Oh, and please note: The whole process starts off with a series of questions. You are not really "telling" them.
Telling is not selling. Asking is.
(hat tip: TerriZSoloCEO via Twitter)
G.L. Hoffman is a serial entrepreneur and venture investor/operator/incubator/mentor. Two of his companies have traveled the entire success path from the garage to IPO. Currently, he is chairman of JobDig , and his blog can be found at WhatWouldDadSay.com or at JobDig.com.