In this article, we’re going to explore the:
- Differences between employment and self-employment.
- Reasons that make self-employment so popular nowadays.
- Ways to curb the risks associated with self-employment.
Have you asked yourself, “Is it the right time to quit my job and start a business on my own?”
The answer, as much as you hate it, is – it depends. Your circumstances are unique; they determine whether this is the right choice for you.
While self employment seems to be a safer option than paid employment in present times, whether it suits you or not depends on a lot of factors. Before you try to determine which option is right for you, you need to understand the difference between employment and self employment.
Employment Versus Self Employment
Employment is Like Renting, Self Employment is Like Owning
The latter option gives you the flexibility to make alterations and modifications according to your wishes. Something you cannot do in the former case.
Employment Gives You a Single Source of Income – Your Employer
Whether you are earning a salary or incentives, all of these come from this single source. However, this is not a constraint if you choose self employment. You may be able to earn from different sources, such as product sales, client consultations, etc.
Employment Can Never Guarantee Job Stability, Even When You’re a Star Performer
Self employment, on the other hand, may take time to establish. However, it can guarantee stability after a specific period – and with considerable effort.
Now that you are aware of the ways in which self employment differs from employment, the next question is: Why should you consider it?
Reasons for Self Employment
No Considerable Difference in Income
While it takes time to earn profits from a new business, once it is up and running, the income can be as much as employment. Moreover, the rewards you get are directly proportional to the efforts you put in. Something that may not be available in a corporate environment.
Ease of Availability of Government Programs
Your eligibility depends on a number of factors. However, if your business idea is viable, you may be able to find assistance from government programs aimed at entrepreneurs.
Options Available Whatever Your Age
It may be difficult to find a new job after a certain age, especially at times of economic crunch. There are no such limitations on opportunities when you work for yourself. Furthermore, you may continue working for as long as you wish when you own and operate your own business.
Achieve a Work-Life Balance
If your work is all that you have, you are losing out on precious “me-time.” When you opt for self employment, you can create a work-life balance and maintain it too.
You Get to Chase Your Dream
The most important reason for self employment is perhaps the fact that this gives you the way to chase your big dream and make something out of it. If you have a vision, but never try to realize it, you may have to live with this regret your entire life. Self employment gives you the chance to be your own boss.
It seems that it truly is the right time to try your hand at your own business. However, it is more easily said than done. This is a big decision and it involves a lot of risks as well. Before you take the plunge, below are a few things you need to know to reduce the risks.
Reduce the Risks of Self Employment
Make Sure You Have Enough Security Money
When starting a new business, the first thing you need to keep aside is ample security money. Nothing can guarantee the absolute success of a new venture. For this, you need to make sure that you have adequate funds to pay your bills for at least a few months.
Make Sure You Have Work Experience in the Same Field
If you are venturing out into a field you know nothing of, chances of failure increase. It is better to acquire some experience before you take any step in this regard.
Make Sure You Have a Business Plan
Creating a business plan can make or break your business. For this, you have to find answers to a number of questions regarding the viability of the idea, the availability of the market for your products or services, the position of your competitors, etc.
Make Sure You Have a Plan of Only What You Can Afford
Big plans may not mean anything if you do not have a sound basis for such plans. The finances you can arrange and attract play a significant role in the business plan you prepare.
Make Sure You Have Additional Financial Resources
Keep in mind that you have to spend more than you plan initially. The costs, almost always, are more than what you planned. In such a circumstance, you may have to arrange for more funds. It is, therefore, important that you have sources from which you can borrow.
Assessing your circumstances is necessary for determining whether it is the right time for becoming an entrepreneur. Ample planning and research are necessary for starting a new business and making it a success.
Self Employed Photo via Shutterstock
I have recently been retrenched from my job of 25 years. At my age it is definitely difficult to find another job at the same level so I am now at a crossroad: keep on looking for another job or start learning the ropes and become self-employed? While working, in my spare time, I have learned the fundamentals of running an online business. However, learning is not enough. One must take action and apply what was learned. What I find most difficult is focusing on the strategies that work. But I guess that is part and parcel of becoming an online entrepreneur. Thank you for your post and wish me luck!
Wish you all the luck for your endeavor! It was great to hear that my suggestions were of any help to you. I do agree that learning something and putting it into practice are quite different; however, I am sure that with hard work and sincere effort, you will be able to succeed. Once again, best of luck for your new venture in the world of online business!
Thank you for this overview comparison of employment and self employments, as well as the considerations that aid success for new businesses. It is helpful to keep fundamentals in mind when developing a new venture, and the necessities of developing a strong business plan and realistic financial resourcing are topics that I couldn’t agree with more. I would add a third key point; family communication. Clearly there are many points that could be made and argued as important but my thoughts are that in starting a new business the support and understanding of family is as important as any.
I appreciate the positive tone of the post and encourage small business owners. They are the engine of the economy and it is a whole lot more fun doing your own thing! Ceirin
Thanks for the great insight into one of the most important things for anyone, and most importantly, for someone venturing into the territory of self-employment – the help and support of the family! It is nice to know that my ideas and thoughts went so well with you. Thanks again for the appreciation as well as for the thought!
Great post. Self employment is definitely the way to go.
Thanks Jeremy! Self-employment has its share of advantages; you just need to make sure that you do it right.