Self Employment Risks
So many people dream of the day they can go into business for themselves and stop making money for someone else. This is not such an unrealistic thought process if you really want the truth. There are many benefits to being self-employed like more freedom and ability to spend quality time with loved ones. On the other hand, there are negative aspects to actually becoming self-employed. Yes, as with most things in life, there is adownsideto the dream.
- An uncertain market
It is certainly no secret that the public at large is a fickle bunch. What is wildly popular and sought-after one month, can fall into obscurity the next. Another factor to keep in mind is your competitors. You must be able to make your business stand out from the crowd and keep it that way. You must keep the economy in mind when going into business for yourself. Ask yourself if your goods and/or services are relevant to the public even in a bad economy.
- The financial investment
You are responsible for every financial aspect of your business. From clothing to promoting to materials to gadgets (phone/service, computer/internet, machines, appliances, etc.), the buck comes right out of your pocket. Not only do you have to foot the bill for your business to stay afloat, you also have to be able to maintain basic living expenses as well. You have to weather the dreaded first year of being in business and manage to make ends meet. Many small businesses fail and close the doors within the first year because they simply cannot make the cash flow.
- Benefits
Established companies can afford to offer benefits like health insurance, 401K and paid vacations. As a self-employed person, you lose all of those benefits and must fend for yourself when you get sick or need to go out of town for that relative's wedding. It is possible to get health insurance as a self-employed person, but you have to have the money to pay for it! Can you match your 401K? Oh wait, do you have a401Kanymore? All of these things are very important for health reasons as well as planning for the future. If you have kids, you simply cannot be without health insurance! You, yourself cannot afford sick days without insurance as a self-employed person.
- The self-motivation factor
Contrary to popular belief, owning your own business is not always motivation enough to want to get out of bed every day. There are going to be days where you are so tired, you just do not care to get out of bed, let alone put in a full day of work. When your business is in its infancy, there are going to be bad days, days where you make little money and nothing goes right at all. These tough days are the times when you may feel like giving up, but must figure out ways to motivate yourself to keep rolling with it. If you have a problem with self-motivation, then your business may never take off.
- It is all on you
The bottom line is that you are the only one to blame for your success or failure. You have to promote your business, keep your business in the public eye and maintain a positive reputation for quality goods or services in order to remain competitive. You literally run your business by yourself, at least until you can afford to pay employees to help you. This is not an easy position to be in day after day. There will be long days and sometimes little sleep while you are trying to get your business off the ground.
Self-employment is not for the faint of heart. You must have a thick skin and maintain staying power in a fickle consumer market. All of these risks can be overcome with a well thought out and executed business plan, as long as you have the self motivation and determination to be successful.
