Many people dream of retiring early from their long career and starting their own business working for themselves. There are Pros and Cons of Self Employment which should be considered together and with open eyes before starting a business. This is especially true for people who have never done so before.
With business ownership, whether it’s a freelancing career or traditional brick and mortar type business, you will have to wear many hats that you may have not had to do before as an employee. It will all be “just you” now. It’s best to go in being fully aware of it.
It is easy to be swept up by your new business venture passion and over-look some of the downsides of self-employment. That being said, there are certainly many benefits that can outweigh the downsides if you do what is necessary to mitigate them.
The Pros and Cons of Self Employment
The Pros of Self Employment
As a self-employed business owner, consultant, or freelancer you get to create your personal work environment. From office comfort to location.
2- Commute Control
Being self-employed means you can control your travel times to finally remove yourself from rush hour traffic. You can do this by either working at or very close to home or by selecting a different schedule to travel.
Being self-employed means you set the rules.
4- Work Hours
Being self-employed means you can set your own hours. Even if you have to adjust to clients or other business needs you do so because you want to.
5- You Are The Boss
Being self-employed means you don’t have to answer to a boss or supervisor. You are the boss now. However you do have to answer to your customers and any investors you may have. Keeping them happy is how you make money.
Being self-employed means you have more flexibility if you design your business for it. You can have more freedom for taking a vacation or sick time. That is as long as you can still meet your business and client’s needs.
Being self-employed means you control your earning potential instead of a set salary. It is all related to how much work you decide to put into it.
8-Personally Making a Difference
Being self-employed means you as the business owner have a direct impact on whether your business is a success or failure and how much income you make.
9-Perks and Benefits
Being self-employed means you get to decide on your own perks and benefits. Just keep it legal to avoid IRS trouble down the road.
Being self-employed means you have an opportunity to create and grow something of value that you believe in and can be proud of.
These are just a few Pros associated to starting and running your own business. I am sure there are many others. There are also some Cons associated to self-employment and running your own business. Some of which can be over-looked when deciding to jump in head first into self-employment.
The Cons of Self Employment
1-Self Induced Distraction
As a self-employed business owner, consultant, or freelancer you get to set your work environment. If you make it too comfortable the more distracted you can become since there is nobody else but yourself to keep you focused and staying on-track.
Being self-employed often means having a heavy workload which can be time-consuming. You have to wear many hats from marketing and sales to book-keeper and CEO. Many business owners find themselves working more hours than they did when they worked as a full-time employee. Some of the hats may not feel comfortable if it is something outside of your normal competency.
3- Time Off can be Challenging
If your business is a one-person service-oriented business where you regularly deal with clients, being able to close down shop and take a vacation can be very difficult to pull off. Especially when doing so spontaneously or with little notice. It will always require a great deal of advanced planning.
4- Fluctuating Income
Those who are self-employed can’t count on a steady paycheck. Regular paychecks are a rarity. Most self-employed folks find their business will cycle through periods of boom and bust. The self-employed and even freelancers must plan for those income fluctuations and handle it within their financial and business plan.
5- Client/Customer Pressures
Depending on the type of your business your customers and/or clients can feel like and become your employer. As a business owner you have to answer to them. Even if you are the one who is the boss running the business. Unhappy customers and/or clients could mean business failure and at very least loss of business.
6- Responsibility and Stress
Being a business owner or freelancer can cause feeling the weight of having a heavy responsibility and overall stress. Being able to handle this means having to rely on skills and being able to delegate, prioritize, and cope to get through it.
7- Lack of Life/Work Balance
The self-employed can at times be so business focused that they will neglect their home life. By being so busy with work and driven by their enthusiasm for their business or in the worst case because of business survival needs, they will neglect what is important in life like family and friends. Things that need to be done are forgotten like errands and home projects. Simply because they are too busy running the business. Life/work balance is nowhere to be found.
It is very important to weigh the Pros and Cons of Self Employment before deciding whether being a new business owner is a good option for you. When we are excited about a new business prospect it is easy to only focus on the benefits. Taking a deep breath and listing some of the Cons will help you make the best decision for your specific business case.