Why Risk Self-Employment?
This article applies only in the U.K. It will have some relevance elsewhere but that is outside my experience.
Here are Some of the Things You Will Need to Think About and Decide on Before You Start Your Own Business:
- Training
- What Kind of Business?
- Finance
- Accounting / Book-keeping
- Premises
- Business Rates
- Health and Safety
- Insurance (Public Liability)
- Employing Other People
- Trading Names and Limited Companies.
There are more, but some depend on the kind of business you want to start. Click this link.
If you find this list daunting, please stop. Let me explain: there are ways round these challenges; more later.
I do want you to understand that I am not trying to put you off being self-employed. There are some great sides to it, if you do it properly. I will show you how in just a moment.
Pros and Cons of Employment
There are Pros and Cons to everything and it will depend on the lifestyle you are attracted to, as to which direction you are going in.
The Pros of Employment
Regular Employment:
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- You will have a regular Salary or wage and know how much you will receive each pay-day.
- Paid Holidays and sick days (to some extent.)
- A Pension Scheme you pay into regularly.
- PAYE means you do not have to fill in complicated tax forms; it is deducted from your pay.
- Potential use of health Insurance (private) and special rates for Gyms and clubs.
- A possible social life, meeting new people.
- You know what to expect when you arrive at work, predictability.
Part Time Employment
You will have a good idea what you are being paid but some of the benefits for full-time employed are not available to you.
The Cons of Regular Employment
- You are an employee, you get told what to do.
- Daily grind of travel to work.
- Rigid structure in terms of working hours and days.
- Pay remains fairly static, not much chance to increase salary significantly.
- Child care problems. Pregnancy, child sickness etc.
- Limited holidays in length and time of year.
- If the company does very well, your share of that success is negligible or non-existent.
- Changing jobs can be time consuming and expensive
- You may be obliged to carry out duties you dislike or feel uncomfortable doing.
- No passive income. Stopping work stops pay.
Pros and Cons of Self Employment:
Pros of Self-Employment
- No commuting to work every day, especially if you work from home.
- Flexibility of hours
- Holidays when you choose
- Fit work around family life.
- Excitement and fun of making your own decisions and seeing the benefits.
- You can make as much money as you want, you can promote yourself.
- You get the benefits of your success.
- If you are getting a little bored, you can challenge yourself with a new project, meet new people.
- You can build passive incomes so that money still keeps coming in, even when you are on holiday.
Cons of Self-Employment
Lack of Security of Employment
- Potential loss of earnings if you take a holiday. (See Passive income.)
- If you work from home, you need more self-discipline and to be able to allocate time to tasks.
- It is easy to forget social life and become a bit isolated.
- Working from home means it is more difficult to get away from it.”
Who Should NOT be Self Employed?
- If you do not like taking risks.
- If you want everything to remain the same.
The Secrets Behind Successful Self Employment
- Be in control of your body
- Be in control of your mind
- Have a plan
- The plan must include short, medium and long term goals.
- The goals need to be date-stamped. When you will achieve them.
- The short term goals must be achievable.
- Sort goals into “Urgent” / “important” and “others.”
- Do them in that order. 1. Urgent / 2. Important 3. Others.
- Have a business plan with a cash-flow for at least a year to see what funding you require.
- Get up early and plan your day.
- Build breaks into your day. Make yourself take a break every 90 minutes. The efficiency you get from this will save you time and energy.
- Have fun. Enjoy what you do.
- Get relevant training and support in things you need.
Should I Do It?
If you look at the pros of self-employment and the “Secrets Behind Successful Self-employment”, and it scares you, perhaps you should look again at what you want in life. It is possible that being in regular employment is good for you. Consider a part-time self-employed business with low risk.
My advice (as it was given to me,) is to sit with a sheet of paper and a pen and write a list of what you want in life.
What would you like to achieve over the next five years
10 years.
If being self-employed fits in better than what you have now, go for it.
A good starting point is a business plan and a cash flow over the next 2 years. Go to a bank or financial advisor and show them. Get their advice and ask if it is a viable business.
Have a look at these, they are examples only, (free.)
You may find it necessary to repeat this process until you have something viable.
What Should I Do?
If you are sure you are not right for self-employment, continue with what you are doing. I hope this information has helped you in some small way.
If you are considering self-employment and you are not sure where to start, full or part-time, then here is one way you can dip your toes in the water. The best thing is; it is free to try.
I have worked with these people for a while now and found them helpful, supportive and enormously educational. Everything you need to know, and more, is there in online courses.
It is a community of like-minded people from all walks of life who will answer questions, encourage and challenge you as you work your way along.
Good luck with your future.
Read More: The Power of Positive Thinking Review