Self Employed or Bust

The pros and cons of being self employed

July 4, 2008 – 2:38 pm

For all the fun I have thinking about being my own boss, answering only to myself, keeping my fair share of my profits, setting hours that work well for me (I’m a night-owl) and fitting work in around my life rather than life in around my work, I’m also a realist. Anybody who sells you the dream that working from home or being self employed is a cake walk down the path to untold riches is pulling one over on you.

There’s that reality check again. I have no illusions that being self employed will be easy. In fact, I expect it to require some up front hard work and an investment of significant time before I ever find myself on easy street. You should go in with the same clear-headedness and that means first asking yourself one simple question and then weighing the good and bad. The question is – Is being self employed the right choice for me? Now let’s weigh my own pros and cons. This is a long one so click on Read the rest of this entry to bring up the whole post.

Pros:

1. I can set my own schedule (start my day, take lunch, knock off when I want rather than standard business hours)
2. I will keep all my profits after expenses and use them as I see fit (as fat-daddy income or to grow my company if I’m so inclined)
3. I can leverage multiple streams of income to keep my interest rather than being stuck in one mundane role
4. I will be my own boss. I will be free of pompous, ego-maniacal sociopaths who made it to the top by stepping over the corpses of those they stabbed in the back
5. I will never find myself surprised and unprepared as a result of an unexpected lay off or firing
6. If I settle on a work from home solution, no commuting
7. No commuting means I can manage my time more efficiently rather than wasting 2 hours a day sucking exhaust fumes
8. No commuting means a tremendous savings in gas expenses
9. If I settle on a work from home solution, I can realize tax benefits on home office and home office equipment
10. I will save money on clothes as I won’t have to have an extensive “work” wardrobe
11. I will save money on lunches, being able to chose to eat from my own kitchen
12. Depending on the type of business I run (let’s say it’s a website on Adventure travel) I can legitimately write off travel to fun destinations if they honestly add to my ability to run my business
13. I will get more time with family even if it isn’t all quality time
14. I can set my own life balance (accept a dip in profit in order to enjoy some free time) rather than being tied to boss/board/shareholder expectations
15. I can do light, five-minute chores at intervals during work (laundry, dishes, etc) rather than being stuck at office and having to give up my free time to do them after work or on the weekend
16. Once my business is profitable, I can sell it and keep every dime for myself (after Uncle Sam gets paid)
17. I can hang what I want on my walls without having to worry about the “image” it conveys
18. I can listen to whatever music motivates me without worrying about the boss walking in or the guy in the neighboring cubicle/office complaining
19. I can invest my profits in training/classes that I feel will benefit me and my company rather than only receiving training my boss feels I should have (and I’ll be able to write it off as a legitimate business expense)
20. My dog will be welcome to hang out with me while I work

Ok, I think that’s enough. I could go on all day. The minute I think I’ve listed every upside to being my own boss, two more spring to mind. I think that’s a trap that lures many self employed wannabes to their doom. It’s easy to get so excited by the potential upside of the experience that one forgets there are some very real negatives that come into play, too. With that in mind, let’s go over some of the cons.

Cons:

1. I assume all the risk (personally and financially)
2. I am solely responsible for my success or failure. No scapegoats and nobody to bail me out if I’m struggling
3. Until I realize profit from my venture I’ll still be stuck with my day job. That means essentially working two jobs until I begin seeing enough profit to quit the rat race
4. I will have to be self-motivating, organized and maintain an office (home or otherwise) that facilitates the back-end elements of my business (expenses, taxes, timesheets, receipts, record keeping, client notes, etc)
5. Though I can set my own hours, I will still have to put in enough of them to make my home business (or independently owned brick and mortar establishment) successful
6. Doing this for the first time will mean making mistakes which may be costly in terms of finances and/or time
7. I will be responsible for finding and funding health insurance for the self employed
8. I’ll be responsible for my own retirement plan/saving. No 401K match or pension
9. Depending on the business model I settle on, I may need to borrow startup capital and that may be difficult in today’s economy
10. I need to protect myself by separating my personal finances from my business finances in case of litigation and that means learning about my legal options and incorporation (which I expect will be some dry reading)
11. If I hire employees, I will be responsible for their financial health to some greater or lesser degree as well as make provisions for their benefits/health care
12. If I hire employees, I will have to learn everything I can about human resources as well as federal and state employment laws
13. I’ll probably need to take some accounting classes and I LOATHE accounting

On the upside, the cons list is shorter than the pros list. On the downside, not having been self employed in the past, I assure you I’m missing some important things. That said, though, not all the cons apply to every possible business model I may choose to adopt. So with a rough list of good and bad defined, I’m ready to answer my question which you may remember was - Is being self employed the right choice for me?

YES! It is right for me. I don’t have to rush or grow to the extent that employees, employee health care, fair employment laws or any of that apply. I am self motivated (or I wouldn’t be writing this blog) and I’m willing to accept calculated risks with profit in mind. I need neither scapegoats nor bail outs. I’ll gladly take the credit or the blame for my own success or failure.

That leaves me with very few cons and a big list of pros. Now it’s your turn. Make your own list of pros and cons of being self employed and decide for yourself if you’d like to be your own boss. Nobody else can make that decision for you.

Stumble it!