Is Self-employment right for You?
The question of whether its better to be employed or to run your own business has probably occurred to most of us at some time or another. In fact both paths have advantages and disadvantages. Here are some pointers on how to decide what’s best for you.
The biggest attraction of employment has always been security. You have a contract with your employer to work for a certain rate per hour/week/month and provided you do your job to his/her satisfaction that income is guaranteed. Until relatively recently, employment meant a job for life. This is less true these days with many employed jobs operating on a fixed-term basis. Even open-ended contracts are subject to termination due to “restructuring”, “downsizing” and the like. That said, the degree of certainty of income mostly still exceeds that which comes from self-employment.
Employees can choose to specialize to a greater degree than business owners. If you want to fly a plane, or program in some obscure language, or whatever, you can do it as an employee. If you’re running the show you have to devote time to all areas of your business – hiring, marketing, accounts etc. Even if you delegate you still have to keep an eye to see that things are being done as you’d like.
Perhaps work for you isn’t your passion but just a way of getting food on the table, leaving you to find your satisfaction in other ways. If so, being an employee is probably the right road. Running a business isn’t so much a job as a way of life.
A major attraction of self-employment is that your efforts are directed towards serving your purpose rather than someone else’s. Your earnings are directly linked to your own achievements with no cut taken by your employer. There’s a certain dissonance in spending half your waking hours furthering another person’s goals, though jobs that reward performance by commission or bonus go some way to mitigating this incongruity.
Another big attraction of business ownership is the freedom of being in control. But while you will have the power to set your own hours and style of working, you’ll most likely find yourself working much harder, and longer, than you did for someone else (at least in the early days).
Being the boss means your fortunes and those of your business are inextricably linked. The harder you work, the greater (usually) your rewards. So the motivation to work hard is much greater than when your extra efforts line someone else’s pockets.
Running a business is an experience that most people should try at least once in their lives, but if you’re in a steady, but unfulfilling job, and you have family and other commitments, it’s not so easy to give up security to take a chance. In such cases the best way forward might be to keep the day job but start a business on a part-time basis. The Internet has created many new part-time business opportunities. Starting your business part-time gives you the chance to “test the water” by checking-out the likely demand for your product/service as well as your suitability for the role.
Employment vs. your own business isn’t a formulaic decision that comes out the same for everyone. It depends on your personality and circumstances. Do you have a clear-cut business idea? Have you researched its potential market and competition? Are you passionate about making it work? Do you have (the absolutely essential) support of your loved ones? Are you prepared to risk the loss of your employee benefits and (most likely) your own capital? Are you prepared to work your socks off, quite likely giving up short-term pleasures, with no guarantee of success? These answers to these questions should point you in the right direction.