While being self-employed and having your own business seems like an excellent idea, it is usually hard work. Being self-employed is always to expect the worse and be prepared for hardship. You are your own boss, and you make all the critical decisions. In fact, being self-employed is not as fun as it might sound in our brains.
In general, an employed person can have a very relaxing life with low stress outside working hours, but self-employed are under a constant battle to ensure that things run smoothly. Entrepreneurs must look for the employee interest and the customer satisfaction first and foremost; your interest comes last.
You can imagine a self-employed person as the ship’s captain who holds the wheel in the middle of the storm. If you let go, the ship can sink with everyone in it. You are not just responsible for yourself but all your employees.
We can compare Employed Vs Self-employed across different metrics:
|Responsibility||Responsible for yourself only||Responsible for yourself and all of your employees|
|Time||Limited to working hours||It can be very long and almost every waking hour|
|Income||Employees are expected to earn sustainable income paid weekly/fortnightly/monthly.||Self-employed can make, on average, 45% more than employees. Self-employed must have a high tolerance as it might take a long time before the first paycheck.|
|Stress level||Low-stress level and mostly limited during working time||Stress levels are definitely much higher than an employee|
|Decision making||Can make critical decisions but do not have the final say||Have the final say and is responsible for every critical decision|
Why would you open your own business? Besides the financial gains
The motivation to start the company because of the financial gains can severely impact the start-up’s success. While there are high financial gains associated with starting a business, at least when it becomes fully established, it is difficult to find much success without a passion for starting something.
The main goal of starting a business is to offer the best possible services that can seriously impact people’s lives. You can not do this if you are not passionate about your goals and want to minimise your regrets in the future and leave a legacy for your family and kids. Commitment makes all the difference as you need to invest your time and money into it.
What does nobody tell you about your boss?
The dark side of being self-employed is the risk of failure. No one wants to fail, so your boss is always a driven and hardworking individual. Your boss was never prepared for such a challenge, so they are always conscious of their decisions and actions and do everything possible to ensure that the company has the best chance of survival.
As an employee, your duties are outlined in your contract. Your boss does not have that; they are involved in every detail and department in the company. They might not necessarily do the work themselves but are responsible for making critical decisions that impact the company’s future.
Do you need a business partner?
A big misconception is that you need a partner to start a business. The truth is you do not, at least not in the early stage. While having a business partner is good, it is not always the best way to start a business. What you need in a business partner is someone who has the same goals and ambitions as you.
Partners must have some basis of mutual understanding and compromisation. It must be someone you can talk to and rely on and trust with yourself and your future. You do not want a business partner who constantly challenges you and disagrees with your business ideas; instead, you want someone that can encourage you and improve on your ideas.
There must be a mutual agreement and teamwork for the partnership to succeed. Unless what you are trying to do is very complicated, which you need to open a business with someone as an equal partner, it is mostly not necessary or at least not required in your early stages. The best thing is to be patient before you decide to bring someone into the business.
When should I quit my full-time job?
In the early stages of your business, it might be tough to attract paying customers, and it might take a long time before your first paycheck. If you have accumulated enough savings to afford to quit your job and focus fully on your business, you should definitely quit your full-time job. It might sound risky, but you can always get another job if your business idea fails.
However, there is no timeline for how long to make a business profitable, and most people might not have enough savings to live without a job for a long time; quitting your job might not be the wisest thing to do when you start a business.
The best thing a start-up can do is work on their own business in the background while keeping their full-time job. It might sound difficult, but many start-ups find success that way; at least they do not go broke working on their new business. The start-up should keep their jobs until they can get the proof of concept where their business idea actually works and some initial success is found. Then you will have more confidence in pursuing this full time and quitting your job.
The Bottom Line
Becoming self-employed requires a plan, hard work and dedication. To become self-employed, you need to have the right education and mindset to achieve your goals and set yourself for financial success. Therefore, financial literacy and learning from others’ mistakes can help you skip many setbacks.