Self Employed or Employee… Pros and Cons

Self-employee or An Employee – Advantages and disadvantages

It can be challenging when you decide to separate yourself from the crowd of salaried employees towards becoming self- employment. A self-employment is a place where you are the master for your own universe. Believe that it is a risk and sometimes it can pay off in many ways.

But meantime one must also understand that each and every risk taken, will yield something. So, when you decide to become self-employed always think of rewards that the self-employment offers against the risks taken. Considering the risks which come with self-employment should be the first step and along with this, it is very important to conduct the cost-benefit analysis as well. So, there are many things to consider before a person decides to enter the field of self-employment.

For the majority of the people who move towards self-employment, it is the dream come true moment for them. Unlike salaried employees, self-employed will have the liberty of setting his own hours, no need to deal with tough bosses, and they he is started doing something he loves. But it is very important to remember that when a person starts his own business, most of the times he will be working for long compared to when he was a salaried employee.

Earlier he will have one boss but when he enters self-employment, instead of the single boss, there will be many. Each and every client will be a boss here. They will come with their own requirements and unique schedules. So, being a self-employed a person has to look into many areas like marketing, taxes and bookkeeping too.

Work for yourself:

There are many entrepreneurs and people who are the owners of the home-based business. These people can be considered as self-employed. So, this self-employment is not an easy task. This is the reason one must always do some self-evaluation before even they make decisions about self-employment.

First and foremost thing that should be done is a list of the reasons even before deciding on self-employment. Dream of making money in a short interval, thinking of flexible hours, issues with your current boss are not the best reasons which turned you towards self-employment. These cannot become building blocks or foundation for structuring your own business.

Otherwise, if a person is ready to work for long hours and has some motives towards building own business cannot be the best reasons to start with. To enter the field of self-employment, one must poses qualities like having complete knowledge and strong foundation along with highest experience in the business they are entering into, self-discipline, and self-dedicated can help you to become self-employed. People with these qualities can easily enter the field of their choice and become self-employed.

Self-employment: benefits

Deciding on the work hours:

This is the first thing which is expected from self-employment. A person, who enters into self-employment, from being a salaried employee earlier, desire for best and flexible work hour. This is the most common reason behind taking up the risks for self-employment. So, when you are self-employed, you are the person who will be deciding when to work. Planning your holidays will be in your hand. Finish the work and take out some time for relaxing. So, everything will be in your hand and it becomes easy to plan on your schedules and balance the life.

Liberty in terms of place:

There are small businesses which are running just by using a mobile phone or a computer with a proper internet connection. Along with this, there is much other business which can be run from anywhere. There will not be any place constraint to run these businesses. So, people can sit in the comfort of their own home or they can sit at the beach as well. This can be the best example for liberty that self-employment brings. Even if the business demands some office location or the shop will be of your choice. This is the best part of self-employment.

Tax benefits:

When you are working as a salaried employee there are many things which are tax deductible. But this is not the case with self-employment. In the case of business, anything which is paid, which related to the taxable income, then that expense can be claimed. For example one can claim expenses like advertising expenses, insurance taken on assets like warehouse and cars can also be claimed.

Control your income:

Here a person has no chance to complain about his income like he should be paid more because in case of self-employment he is responsible for his income. This will drive the person to work hard to achieve the highest income possible. In the case of self-employment, there will be more correlation between the income a person is earning and his effort.

Self-employment: disadvantages

No effort, no earning:

It is hard to enjoy the time off from work in case of self – employment since you will start thinking that the same time can be spent in making some effort towards earning. Each and every minute took off; you will start thinking that it could have been used in a better way. Time is very important in case of self-employment otherwise you may lose a client or customer when you are not on job. So, ideally you will be working more hours when compared to the working hours of a salaried employee.

Pay and its irregularity:

The income will not be steady in case of self-employment when compared to salary. Sometime people will be busy earning with many clients and some other time, they may go down without a single client. So, when the pay is irregular people may find it difficult to settle their regular bills. In case if there are commitments like loan repayments, it will be hard to make.

Bookkeeping- does it yourself:

Even if the business is very small, book keeping is necessary on a methodical basis. When you are self-employed, this will eat up a lot of your time. In case if the person is not trained well, this can become challenging.

No place for – company benefits, annual leave or sick leave:

No leave or no excuses. When you are salaried employee it is not difficult to take sick leave. But when you are self-employed, even when you are too sick you may have to work for an important client. In case if you go on leave, every day will potentially takeout something from your business. You may miss out big earnings as well. There is no place for company benefits or annual leaves which are paid. One cannot think of all these in case of self-employment. Do not think about company cars, insurances, and gym membership, since you are the boss here.