Updated: Nov 28, 2020
Are you planning on becoming self-employed? Well it helps to know the advantages and disadvantages of venturing into the world of self-employment. Frankly, we can say that self-employment is not that as easy as it is often made out to be. Yes, it has it upsides and perks associated with it, but there are a number of drawbacks as well. Here are some common advantages and disadvantages you may encounter on your self-employment journey.
Advantages of Self-Employment
The following are some of the advantages of self-employment.
Time Flexibility - Working On Your Own Time Schedule:
Self-employment often allows you to work to your own schedule. You are rarely dependent on anyone else in this regard and can create your own working hours based on what works for you. There are no time limitations and you don't have to restrict yourself like you would in a 9-5 employee role. In the case of many freelancers, they often work based on their own time flexibility. They are seldom bound by time; instead, they are bound by the task itself. Once the task is done, they can deliver the project to their client and move on to the next task or simply take a break from working, if it so suits them.
Remote Working Opportunities:
Another significant advantage of self-employment in the age of online products and services, is that for some professions/ small businesses ideas, you are not bound to a particular location, thanks to the ability to provide professional services online, allowing you to work from wherever you feel comfortable. You can work from your very own home and create your own workspace or even work on the move while traveling. There is often no need to report to a particular office and that sense of freedom is priceless
Potential To Make More Money:
Self-employment has the potential to allow you to make more money once you have a viable business idea, compared to many traditional jobs. Being self-employed provides you with the opportunity to scale up or down your workload, giving the entrepreneur the chance to do more when needed. The more work you do, the more you get paid and you won't have to share profits with anyone else, if you are the sole proprietor of the business.
You Can End Up Saving Money:
Working from your chosen comfort zone often allows you to save more money on expenses associated with traditional work environments, like offices. So, instead of spending money on transportation and formal/work related clothing, you can save those funds for a rainy day or simply invest them back into your business.
Deciding Who To Work With:
In standard office environments, you seldom have a say in what colleagues you work with or what clients to offer services to. However, self-employment allows you to work with people of your choosing. If you aren't comfortable with a particular client, you have the option of not working with them, the pros and cons of doing so are completely yours to weigh up before making a decision. If you find someone rude or disrespectful you can skip that client and choose to work with someone else. Unfortunately in the traditional professional work environment, refusing to work with such a person could very well cost you your role in the company.
Disadvantages of Self-Employment
On the other hand, here are some common disadvantages of being Self-Employed.
Self-employed individuals, especially in the beginning stages of starting a new venture, are often subject to income instability. It is quite a common occurrence to earn quite a substantial amount in one month and have to struggle the next, as the business finds it's feet. The first couple of years of self-employment are often trickiest, naturally you have less experience in the role of gaining new clients, which is everything to the survival of the business.
It is common practice among many, to give yourself a small monthly income from whatever you earn and save the rest as a cushion for any unforeseen circumstances down the line. The best solution to avoid hardships is to build a financial cushion and accept the instability as part of the initial stages.
Working For Free:
In the beginning, you may very well have to do a fair amount of free work to market yourself. This occurs when you have little or no work experience to show potential clients. A new client may ask you to work for free or for a lower rate at the start of the business relationship with the intention of assessing the quality of your work. The time frame of these stints can vary depending on your field, but luckily they don't last for forever. In must successful cases, if the client is happy with the quality of your work, you may very well have secured a long term business relationship.
The self-employed individual is the captain of their own ship and as a result, are sole recipient of all successes and failures that come the way of the business. The buck stops with entrepreneur and the weight of this responsibility can sometimes be isolating. Whilst they may communicate with the customers on a regular basis, they are often not at liberty to share setbacks or concerns within the parameters of these relationships.
Regardless of how much you earn or how financially independent you become, it is beneficial to have people with whom you can share your plans and ideas, as well as discuss the ups and down of your business day. In traditional work environments, you often have colleagues with whom you can discuss your plans and setbacks, but a as a person in self-employment, you will have to actively see out a support base, you can often find this sort of support presented in the form of a business/ entrepreneurs networking community.
Having read this article, you may have realized that self-employment can be both liberating and challenging. Along with its perks, it does have some disadvantages too but it does not mean that you should shy away from chasing your goals in this arena. If you are interested in becoming self-employed, set your goals and take a informed steps a long the way. Be aware of the challenges and prepare as much as you can to hedge against them. Success is yours for the taking!
To talk to someone regarding your entrepreneurial en-devours, feel free to book a free business consultation meeting. Sometimes it's just good to talk.