What is Self Employment?
Self employment is a practice where the person works for self and not under any employer. Here working for yourself can be in the form of freelancing or owning a business.
Self-employed person is his or her own boss and generates revenue based on the services that they can offer.
They are working as freelancers who help the projects to be executed based on the expertise that they have to offer to the company. The services could range from financial help, technology-related, content writing, recruitment, or any other service that you have expertise in.
It is not the same as owning a business, as a business owner will not participate in the day to day operations of their company whereas a self-employed person will be actively working on all the aspects as they are the sole operators.
- Only 56% of Small Business Owners Have a College Degree, Down From Previous Years Click To Tweet – source smallbiztrends
- The number of self-employed workers has increased from 3.3 million in 2001 to 4.8 million in 2017, according to the Office for National Statistics (ONS). Click To Tweet – source bbc
- In 2017, 18 % of the self-employed in the EU-28 reported having just one client or a dominant client. Click To Tweet – source europa
- In the Netherlands in 2017, 31.3% of the self-employed declared that their client(s) had control over their working time. Click To Tweet
Let us now look at some of the merits and demerits of a person who opts self-employment.
Top Self employment Jobs:
Here are the top 25 self-employed jobs you can start today, which are actually fun by the way.
- Uber Driver
- English-as-a-Second-Language Tutor
- Freelance Writer
- Life Coach
- Academic Tutor
- Stand Up Comedian
- Any Kind of Repair Work
- Buying and Selling
- Video Production
- Music Tutor
- Social Media Consultant
- Career Coach
- Mobile Repairs
- Professional Speaker
- Freelance Web Designer
- Home Staging
- Voice-over Specialist
- Resume Writing Service
- Grocery Delivery
- Light Hauling
Importance of Self employment:
Though there are many benefits of self-employment, the first thing that comes to our mind is financial security. There are also many other advantages you avail when you are your own boss.
Here are a few points that show the importance of self-employment,
- Understanding money’s real value
- Knowing that your skills are good enough that others will buy
- Option for retirement savings
- Expense deduction
- High risk, high reward.
Need of Self employment:
Being self-employed is not that easy. Though there are many advantages of becoming your own boss, but on the other side, the responsibilities you need to handle will also be huge.
There are a few traits that you need to possess for becoming self-employed. Some of them are,
- Need to be flexible
- Need to be a self-motivated initiator
- Look out for opportunities and pursue them
- Need to plan ahead
- Put in a constant and consistent effort
For more information on self-employment, you can refer to this article (pdf file): https://download.nos.org/srsec319new/319EL25.pdf
Advantages and Disadvantages of Self Employment:
Merits or Advantages of Self Employment:
As an employee, you will always be governed by someone superior to you and would always be commanded around. This can be said as a disadvantage of being an employee.
Self employment is for people who hate to be bossed around and are talented enough to generate salary by selling their expertise independently. Let us look at some of the needs of self employment and the benefits of self-employed.
1. You are your own boss:
Do you hate that some lame person who is not as talented as you are, is governing you?
Do you hate the feeling of being told what to do and how to do all the time?
Well, it is time for you to start your journey from a salaried job to becoming self-employed where you are your own boss. You would be more pleased with what you do and hence lead a content life personally.
It is important to be happy and content with what you do that helps you lead a life with luxury. This is one of the advantages of self-reliance.
2. More opportunities to earn money:
Being self-employed, you can earn more than what you can when you were a salaried person, as the company deductions are not included in your earnings and you get what you receive.
You can start with the basic charges and slowly raise your rates based on the positive reviews that you receive for your work. The opportunities will knock on your door if you can give your clients what they want.
It is important to build good reviews as it puts extra weight on the rates that you are quoting.
3. There is less investment:
You can save a lot of your daily expenses based on the work that you choose. You save on gas as you work from the comfort of your home and thus avoiding the long commutes to your workplace like you used to.
Getting up early for meetings and hence going on expensive lunch outs can also be avoided and you can get to have a healthy and delicious home-cooked food.
Leaving your kid behind with daycare and wondering how your kid’s day has been could be taking an emotional toll on you.
One of the benefits of self employment is that you can divide time for your family and profession without taking anything else for granted and maintain a good work-life balance. You can also save on the expensive daycare expenses that adds on to your daily needs.
4. Variety of projects that you can execute:
When you are working in a corporate firm, your roles and responsibilities are defined and you are asked to work within a framework.
The structure does not allow you to explore other options that are creative and innovative as you need to stick to the designed solution as agreed upon by the seniors and clients.
5. Drama Free environment:
We always love to work in a team as we get the responsibility divided and hence also the work pressure.
But does working remotely and being isolated from everyone sounds really bad?
You would be free from the loudspeakers of your team who are continuously over the phone talking out loud. You would not have to hear to the music during work hours as your colleague plays on them on his or her phone. And your work friends will still be your friends no matter what.
6. No worries about the sick leave:
If you are ill then you don’t have to worry about whether you would be getting your sick leave or not. You can inform your clients regarding the health and take a day off from your work or resume a few hours later.
Also, you no longer have to beg or give long explanations on why you were on leave and prove your point on the fact that you were really ill. You have the liberty to choose your own health insurance based on your needs and not what your company has decided for you.
7. It is your work area:
It is your area and your call on, how you want to decorate it.
You can put up photographs of people or places you like. You can have fengshui items on your desk. Also, you can use dual monitors if you want or go for a single one, it is completely on you.
You can keep a standing desk, sitting desk just go for it. It is your work area and you can decorate it how you want to, not worrying about the company norms and what your colleagues will think.
8. You want new equipment, go get it!
In a workplace to get new equipment for your project, you need to go through a proper channel where you need to apply the requirement in the system and support that requirement with needed documents justifying your request.
Being a freelancer you don’t have to get into this channel of bureaucracy, all you have to do is get up, go to the market and buy the needed equipment for your projects. No worries about the approval process and no more waiting time.
9. No Dress code:
If you are not a shirt, pant and tie kind of a guy then this is one of the advantages for you to work as a freelancer.
The same goes with the female workforce also. You don’t like wearing formals and then you would be happy to work in your pyjamas at the comfort of your home or work in funky outfits that define you when you work from any place other than your home.
The only time you would have to be dressed up as corporate employee would be when you are attending a meeting with your clients.
10. It is your time and hence your schedule:
You know yourself best and would love to have the flexibility of working based on your time rather than the time set by someone else.
If you are not a morning person, then you set your schedule based on when you get back and work with an extra zeal and focus. You can ensure that you are able to connect with everyone on your project rather than missing a meeting because you got up late!
It is your schedule hence, making you more responsible regarding your planned day!
11. You are a valued person now:
When you are working in a corporate setup there are many people that you are competing against in terms of recognition and at times your work and efforts do get ignored because some other guy took the share of your cake.
Being a Freelancer, that will never happen as you would be working on the projects and the clients would appreciate your work giving you the full credit and share of recognition.
Your efforts will not go unnoticed and this will give you an extra boost to work harder for the upcoming projects.
12. You choose your customers:
You can choose for the customer you want to work for and avoid some senior guy sitting on your head forcing you to work on a project that you don’t want to.
If you are not happy with the attitude of a client then you will be responsible as you chose to work with him on a project. The responsibility to choose the right clients is on you as a freelancer and not on anyone else.
Hence, you need to be careful when you are bidding for your project and signing the contract.
Demerits or Disadvantages of Self Employment:
Every setup comes with advantages that we discussed above and also with disadvantages. As an individual, we need to take a call and move on the path of self employment accepting all the pros and cons of the setup.
Let us now look at some of the disadvantages of self-employment.
1. Paying more taxes:
Even if you’re a sole person working as a freelancer you would realize that freedom from the corporate world does come with a price.
You would end up paying a little more taxes than you used to as a corporate employee. You would be responsible for filing your taxes on time.
2. No more paid leaves:
There will be no more paid leaves for you. As a freelancer, if you are working on daily requirements and have taken few days off then there is a possibility of you missing out on those requirements and hence on the monthly payment.
You need to keep in mind that as a freelancer there is nothing called as paid leave.
3. Multitasking all the time:
Since you are working as a freelancer, you will have all the responsibilities of getting the project, executing it and closing it.
You would be responsible from head to toe till you start employing other freelancers or employees to your business.
4. Unsteady Pay:
There is no guarantee that every month you would be getting a minimum of say 1000 bucks. Some days or months you will earn exceptionally well while you can also end up with no payment at all as you had no projects in hand.
You need to be ready to face the unsteady pay structure of being a freelancer and plan your finance accordingly. You need to be prepared for the month where there would be minimal payment or no payment at all.
5. Socially you are isolated:
Being on your own comes at the price of being socially isolated. If you are working alone then there would be no social gatherings like that of corporate jobs. There will be no social contacts or friends that you could make through your workplace.
It might get a little lonely after a while and you might begin to miss the charm of working with a huge team and the celebrations that come with it when you reach the milestones in your project.
Working alone might achieve your milestone but celebrating with yourself is not that inviting and exciting!
6. Distractions at home:
Before getting comfortable working from you, you might want to think about the various distractions that come with it.
If you have children then they are running around and the urge to play with you might distract you off from your work. Your helpers making the noise of cleaning and other activities they do.
Your doorbell ringing like an alarm after every hour with some other person trying to get into your way of work can also lead to distractions. You might end up solving your personal issues more than your work issues.
Self employment comes with a boon of you being your own boss. You can get to take calls and clients based on what suits you and you can schedule your work from any place you want, be it your home or a coffee shop. Till the point you are able to execute your projects, the clients are not bothered where you are!
But every system comes with cons also and you need to be aware of them to make you mentally strong whether you want to adapt to this setup of work. If you love and can manage, then you should go for it and be your own boss!