1. Why become self-employed?
Ambition and drive can be good reasons to become self-employed – to be your own boss and reap all the rewards from your own efforts. It's good to have definite reasons for becoming self-employed, and a clear idea of what you want to achieve. Ask yourself these questions as a starting point:
- Do you know exactly what you are going to do?
- Does it use your strongest skills?
- Do you get personal satisfaction and thrive on solving issues and overcoming challenges?
- Can you earn enough money doing it?
- Where would you like to be in five years' time, and will self-employment get you there faster?
- Are you well motivated and able to forge your own path?
There are plenty of good reasons to become self-employed but discontentment with your current job, or being unemployed, may not be the best reasons.
Here are some of the potential advantages and disadvantages to help you think it through further.
Potential advantages of self-employment:
- The potential to earn more than your current salary.
- More independence – you decide what you do and when you do it, and potentially where you work too.
- You can select your own working hours and potentially enjoy a better work/life balance.
- The chance to maximise any opportunities you spot and pick projects that excite you.
- The opportunity to improve your quality of life and experience more job satisfaction by focusing on what you enjoy. You could possibly cut out the daily commute, and ideally create a work culture that you can thrive in.
- You’ll have the freedom to play to your strengths by making the most of your skills.
- You’ll have the authority to develop and shape the direction of your business as it grows.
Potential disadvantages to self-employment:
- Increased responsibility – aspects such as success, failure, loss and profit all lie with you. You won't have paid holidays or sick pay, and you could earn less in the short term.
- You have to rely on your own intrinsic motivation as you won’t have a line manager directing your efforts and backing you up.
- It could feel isolated and lonely.
- You could end up working long hours and spending less time with your family.
- The responsibility for your own tax affairs and pension.
- Having to go out and find customers or clients for yourself.
Looking ahead
When contemplating self-employment, a useful exercise could be to evaluate how you would like your future to change because of taking this step.
Think about how you want to see your business growing and developing. Will you take on more staff or could you franchise your business and create an income stream that way too?
It’s also worth thinking about how you could manage if things changed at home. For example, getting married, having children or caring for elderly family members. Many people can find these positive motivators, such as wanting to provide a legacy for their children.
You might also want to consider working with others in partnership in your new enterprise. Having one or more partners can help in both setting up and running a business. This is because you can divide and conquer while playing to each other’s strengths.
