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| Employer | 31% | 88 votes | Total: 288 votes | |
| Self | 69% | 200 votes |
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Add to FavoritesThere is a lot of talk about working for yourself, starting your own business, benefits of a home business and other at home ventures. For the most part they seem to appear with a positive slant. I have been in both positions; working for someone else and working for myself. I agree; there are many benefits to be had working for yourself; however, there are many benefits when you work for an established organization also.
I seriously think every single worker in America ought to have the opportunity to work in their own home business at least for one year. I think we all need that experience. Were that to be possible we would all gain a certain respect for the people running the big businesses. At the least we would discover what they really pay when they employ us.
I like using the top ten list approach with discussions like this one. I first set about making my own list of items then I pick what I think to be the top ten and write about them. Well, for this topic my hand-written list surpassed 30 benefits. It was very difficult to stick to my top ten rule, but I did. Just remember though, working for yourself is indeed an experience not to forget, but you never know what that company you are working for really does for you until you venture out into the world of self-employment.
So many companies have so many different benefits, that I had to work from a "typical" company. I don't even know what is typical, but I have worked in ten different companies, so I averaged them out and present those top ten benefits. My choice for the top ten benefits of working for a typical first line employer includes;
10) PRE TAX DEDUCTIONS: Many employers today offer a process whereby they will deduct funds from your paycheck for things like medical co-pays, child care and other non-covered expenses. They deduct these funds BEFORE taxes are taken out. This makes the taxable amount smaller and your tax payment smaller. You could make $10 available for non-covered medical expenses and only drop your take home pay by $7.
9) 40 HOURS: Please don't ever think that working for yourself you will ever see a 40 hour week again. They are almost non-existent for those who work for themselves. The rewards are there but so are the labors. Working for a company you will work 40 hours and go home. If you work more, then you most often get paid overtime for it.
8) STEADY CHECK: When you work for yourself you are working in feast or famine. Working for someone else you know exactly what you will be getting and when you will get it. You have a pay check every other Friday without fail, or every Friday or twice a month. Doesn't matter when, you know it will be there. Not so if you are the boss of you.
7) PERSONAL LEAVE: Working for yourself you will certainly be able to take leave anytime you want but you won't get paid for it. When you are self-employed, if you don't work you don't get paid. Companies typically provide three days bereavement pay, three days wedding pay and several other possible packages. You get paid time off to do certain personal things.
6) EDUCATIONAL ASSISTANCE: If you want to go to school you are going to pay for your own tuition. If you work for someone else they will most often pay from 50% up to 100% of all expenses related to your education. Go get that degree while you can!
5) SICK DAYS: Separate from personal leave companies usually provide a set number of sick days; from a day per month up to one day a month. This can be 6 to twelve days a year. At $100 a day that is a clear $600 to $1200 benefit a year that your home based business will not be rewarding you with this year.
4) RETIREMENT: There are many different retirement plans available from most every legitimate employer today. Some of them even offer two. They also offer matched contributions to some of the plans. That means if you put in 5% of your pay they will match your 5% to the dollar. Free money! That could result in up to $1000 a year or even more depending on the plan.
3) VACATION: Let's say you get two weeks vacation at the rate of $100 per day salary. That equals $1000 vacation pay a year, every year. Your very comfortable home based business will never pay you to be off work.
2) HOLIDAYS: Typically a company will have 13 paid holidays. I don't even have to list them, you know what they are. At our example rate of $100 a day that comes out to a $1300 a year benefit. I know when I had my own home based business I never got paid for any holiday. I took the holiday off but without pay because I didn't work. In fact. I didn't even have the choice to work; my clients all had the day off - with pay!
And the number one benefit of working for someone else?
1) INSURANCE: I purchased my own insurance for years. I paid $600 a month for myself and my wife. I since have met people who are paying as low as $500 but also as high as $850 per month. You simply cannot be without health insurance, especially if you have children. At $600 a month that's a $7200 a year benefit. Even if you end up paying 25% of the premium that still leaves $5400 a year the company is paying for you. Truly the one most expensive benefit from working for anybody is health insurance.
There are just so many more; catastrophe insurance, raises, company parties, mileage reimbursement, professional organization assistance and on and on. No doubt about it, being in business for yourself is truly a positive experience, I loved it. But working for someone else certainly has its benefits and we cannot forget that.
All told it is estimated that a typical company pays another 50% of an employee's salary in benefits. If you make the example $100 a day, you are really getting paid $150 a day. Don't let me stop you from taking that entrepreneurial leap but don't do it simply because you think your company doesn't do anything for you. Clearly, they do much more than we might think.
Learn more about this author, Gary Maclean.
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Self
As an accountant, I get this question a lot. Many people are convinced that being self employed is the way to go, simply because you can be your own boss, establish your own hours, etc. All of that's true (which is why my husband and I are both self employed), but the fact is the GREAT majority of small businesses do not make it.
Despite the fact that most small businesses crater, I still believe that being self employed is preferable to working for an employer. However, there's one caveat: in order to succeed, one must not only do her homework, she must remain very nearly anal when it comes to record keeping. There is no magic formula for success; in my experience, the same basic problems keep most business ventures from taking off. This article starts on the assumption that all of the necessary market evaluations have taken place, and that you've come to the conclusion that your business idea is indeed, a viable one. Assuming this is so, we'll begin where I come in as an accountant, and we'll look at some of the issues that can afford no compromise.
1. Make sure you understand the necessity of establishing a detailed accounting/bookkeepi ng system BEFORE the first transaction ( which could mean loan closing, or initial investments preliminary transactions that must be dealt with before business commences). I have worked with many people who didn't bother to get all of their bookkeeping ducks in a row from the very beginning, and that simple oversight was the kiss of death. I remember one client, a builder, who thought that he was making between $10,000 and $12,000 profit per house he sold. When I finally got his books in order (and this was no small task, I had to locate and enter EVERY transaction, from land closings, to rolls of housewrap, to packages of nails), I discovered he was, in fact LOSING $2000 per structure. By the time I brought this to his attention (he didn't call me in until he'd been building for a year), the bank cut off funding for further development.
2. If you have employees, make sure you stay on top of filing your payroll taxes. I have seen MANY small businesses go under because they are late getting payroll funds to the state and the IRS, respectively. In the case of employee taxes, the states and the IRS show no mercy. This is because when you fail to file employee taxes, you are holding on to money that isn't your own some of those funds were taken from the payroll checks from your employees. So, in essence the government looks as fondly on this as they do embezzling and it takes a grim, GRIM view when it comes to embezzlement. Additionally, the penalties and interest accumulate almost exponentially. Picture how fast the dollars roll by when you're filling your car with gas. This is very nearly how quickly the penalties will rack up on overdue payroll taxes.
3. Be timely filing your monthly sales tax, if you are in retail. Similarly to payroll taxes, sales tax funds NEVER belonged to you; they were the government's from the moment the sale was finalized. If you are even one month late, the state will be on you in fast and furious fashion. On the flip side, when you do business with someone who charges sales tax, make sure you see their state issued sales tax permit (which is supposed to be in plain view). One of my clients was paying sales tax to someone who didn't even have a permit. So, she was charged an extra 9% on top of retail, while her supplier was pocketing it. Said supplier is now under investigation for sales tax fraud.
4. Consult with an accountant. While accounting isn't rocket science, people who practice it have had to go to school for 4-5 years to be qualified to assist you. Let them use their knowledge. You'll save much more money in the long run if you invest in their professional services. Remember the old saying, "Never lie to your doctor, lawyer, or your accountant!"
5. Invest in good accounting software. My personal preference is QuickBooks certainly there are quirks, as there are with any software package, but in the case of QB, the benefits outweigh the quirks by a long shot.
6. Have your accountant regularly go over the financial statements generated by QB or other software. I had one client who couldn't understand why he had very little income after bringing in forty thousand dollars into his lawn care business. He didn't understand that $40,000.00 in gross earnings didn't mean a whole lot if his expenses were out of control. Analyzing your statements will show you which expenses are out of control, and which ones could be reduced with a little care and ingenuity. Preferably, do this at least every quarter, although monthly would be better.
7. Finally, and all of the above suggestions hinge on this, make peace with the fact that keeping immaculate records is absolutely imperative. Most people are afraid of this aspect of running a small business. This fear keeps them from going the necessary lengths to maintain proper accounting records. Don't let this happen to you! Hire some help initially. If a one time consult is all you need, great. If not, don't be afraid to pay for the services of a professional. Again, you will save much time and money if you do this AHEAD of time, rather than hiring someone to clean up the detritus of sloppy bookkeeping, which is much, MUCH more costly in the long run.
And, remember, doing what you love to do is a wonderful thing. If you decide that the self-employment route is indeed for you, make sure you stay on top of the minutia. Doing so will increase your odds of long term success in a substantial way.
Learn more about this author, Rachel Stockton.
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