Is self-employment right for you?
The idea of self-employment has become a bit glamorized across the internet and social media. It’s a status symbol to be your own boss. But that doesn’t mean working for yourself full-time is right for everyone. In some cases, having a full-time job and running a business on the side is actually a better fit. Is self-employment right for you? Here are some questions to ask yourself before becoming self-employed to make sure it’s the right step:
Are you comfortable with a lack of stability and certainty?
It’s true that no job is without risk — you could get laid off or fired from your full-time job tomorrow. But a full-time job does typically give you a consistent paycheck. A consistent paycheck is easier to manage and budget.
Self-employed workers tend to have a variable income. Even with recurring clients, your income can change from month to month which can be a bit unnerving. There’s always a sense of urgency to keep working to close deals and land customers to keep income consistent and growing.
Saving up an emergency fund of cash for a cushion is important for months where you may not bring in as much income. If this is something you can manage, self-employment full-time may be for you. If not, growing your business on the side of a full-time job may be the better option.
Are you ready to give up employment benefits?
It’s easy take for granted the number of benefits that employers offer. You may get access to a healthcare plan through your employer that has great coverage. Your employer may offer a retirement package with 401(k) match. Employers may give vacation time, sick time, and leave for new parents.
These are benefits you’ll have to manage yourself as a self-employed worker. You’ll have to find your own healthcare, and it can be expensive. You’ll have to manage your own retirement plan. If you want to take time away from work, you need to also make sure the show can run without you or you could face a loss in income.
Employer benefits are factors you need to think about carefully before quitting your full-time job. Managing your own benefits can be costly, and a headache. Have a plan before setting out on your own.
Are you ready to be the visionary?
Self-employment means running the entire show. You make the decisions on the direction of your business. You decide where you want your business to be in 5 to ten years.
This freedom can be exciting for some business owners and terrifying to others. A lot of responsibility is resting on your shoulders.
Building a business on the side of your full-time job can give you something to fall back on if your business has growing pains while you figure out your plan.
After answering these questions — Is self-employment right for you? If not, no problem. There doesn’t have to be a rush to self-employment. Business owners should have a deep understanding of the implications of becoming fully self-employed before taking the leap. This way you can take the leap with confidence knowing your ducks are in a row.