by E Pearce

Created on: March 31, 2010   Last Updated: April 02, 2010

DEFINITION OF SELF-EMPLOYMENT: An individual who operates a business or profession as a sole proprietor, partner in a partnership, independent contractor, or consultant.

Many people dream of working for themselves, believing that this is the answer to solving a multitude of employment related problems. But, how many people are cognizant of the true advantages and disadvantages that come along with self-employment. Of course, it seems like there are a lot of benefits to being self-employed–no boss to report to, you can set your own hours, the credit for your hard work belongs to you and so does all of the money that you earn.

Let’s take a further look at the advantages of self-employment.

1. Capacity to set your own hours so the rush hour traffic commutes may not be a part of your life anymore.

2. Freedom to take vacation time or sick time.

3. No boss or supervisor to answer to. You get to set the rules.

4. Freedom to create your own work environment.

5. You choose the projects to work on.

6. Ability to directly determine the value of your own work.

7. As a self-employed person, other than freelancers looking for clients, you don’t have to worry about searching for a job. You already have one!

8. With the exception of face-to-face interactions with clients and customers, you can work in your pajamas if feel like it.

But here is a flip side to self-employment that many people aren’t aware of.

1. When you chose to become self-employed, you are taking a substantial financial risk and you assume ALL the liabilities.

2. You lose the safety net of a guaranteed paycheck and benefits such as health insurance.

3. If you need start up capital, you may need collateral such as your home.

4. If you are used to living “large,” you’d better be prepared to change your spending habits.

5. If you are not working, you are not making money. If you are working by yourself there is zero money coming in when you take vacation or sick days.

6. You have the freedom to set your own hours but it is almost certain that your work hours will increase, possibly dramatically.

7. Because you’re working for yourself, you’re going to have to take care of everything yourself!

8. If anything goes awry, it’s your complete responsibility. The buck stops with you!

 So what is the bottom line? Discipline and Commitment!

If you are disciplined enough to work long hours, able to tolerate risk, cope with the stress, handle the potential of failure, work well alone and figure out all of it on your own, then self-employment may be right for you.

~ If not, then maybe you should keep your current job or continue your search to work for someone else.

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