Self-employment is satisfying and exciting when you are making money, and even when you’re not making enough. There are however some challenges associated with running alone and being on your own.
Your Income is Irregular
A major advantage of being employed by someone else is that almost always, your salary is highly regular and guaranteed as long as you work. In comparison, in most self-employment situations income is highly dependent on your immediate success in your business. If you don’t make a sale in the month, you won’t have any income that month, and that can be very rough.
To have a smooth income pattern, you save during the bumper times (high sales and profit) so you can survive during the lean business times.
You Decide What to Do
While this is as an advantage, sometimes it can be a disadvantage as well. Being self-employed requires constant self-motivation. If you’re the type of person who thinks things like “Well, I can do it later” on a regular basis, then self-employment will be a challenge. It is not for the lazy person.
You have to work with the same seriousness with which you worked for your previous employers. Do what needs to be done, albeit at your own pace as long as customers are satisfied with your timelines. Laziness should be out of the way. Draw schedules for all activities and follow them
Managing Business Finance
When you are in a regular employment, things like budgeting, financial statement preparation, social security and income tax deductions are handled for you by your employer. Once you become self-employed, you have to handle all of these things yourself, which means being educated and being careful. If you can’t do these things, the Tax Authority will make you pay the penalty – and you won’t like that at all.
Despite the challenges, self-employment can also be interesting, exciting and fun, especially if you know what to expect and what you are doing.