The more I look around me, the more self-employment seems to be the way to go for many people. I’m not sure if this is just my observation or if it’s indeed a global phenomenon, so I’d like discuss it with you.
There are two reasons why self-employment seems to be the way to go:
- Necessity
Many people lose their jobs because of the recent financial crisis. I read many stories about people with high salary who suddenly found themselves out of work and found it difficult to get new jobs. For them, self-employment could be the only way to go because the job market isn’t as good as it was. - Opportunity
Many other people choose self-employment not because of necessity but because of opportunity. They find that self-employment gives them more freedom and flexibility, not to mention the potentially big financial reward they could get.
I am an advocate of self-employment and over time I become more and more convinced because of the stories I hear from people around me. I often hear about those who lose their jobs and how it could take them months to get new jobs, if ever. I imagine that if only more people went through the path of self-employment, I would hear less such stories.
More specifically, here are some reasons why I advocate self-employment:
- Your income source won’t depend on one party
If someone works for a company, his boss could fire him and eliminate his income source. I don’t know about you, but I don’t feel comfortable giving the control of my entire income to someone else. Being self-employed means that nobody can fire you. - Your income won’t drop to zero if something bad happened
If someone got fired from his work, his income practically dropped to zero. Those who are self-employed won’t experience that. Sure, you might lose clients, but it’s unlikely that you lost all of your clients at once. If something bad happened, it wouldn’t be drastic. Instead of having your income dropped to zero, it would drop gradually and therefore give you time to work on something else. - You can cut work-related expenses
Since you work on your own, you have more control over the way you work. This often translates to saving on work-related expenses such as transportation costs. - Your have more control over your time
In most cases, you can arrange your own work time. This flexibility means that it will be easier for you to allocate time for other things in your life. - Your reward is more proportional to your effort
When you are in a corporate environment, providing twice as much value doesn’t necessarily mean getting twice as much reward. But when you work on your own, that can happen more easily. You contact with the market directly so any extra value you provide is more likely to be rewarded. - The Internet opens new opportunities
The Internet allows you to deliver your value directly to those who need it without any middleman. In addition, the Internet helps you aggregate potential demand. Let’s say you have a specific skill that only 1 in a million people need. Without the Internet, it will be difficult to find even one client in your local area. But thanks to the Internet, you now have access to over 6000 potential clients. It means that your ability to make a living from that specific skill increases exponentially.
The first and the second reasons are the most important, in my opinion. Self-employment can give you more security. You are less likely to suddenly fall into a deep financial trouble because of lost income.
Of course, there are also negative aspects of self-employment. First of all, it’s not easy to start a self-employment career. It could be difficult to get consistent income in the beginning because of the difficulty to find clients. You might also need to work harder than when you work for a company since you are now on your own.
That being said, I think the freedom and security is still worth it. With the world and the job market becoming more unpredictable, having your destiny in your own hand seems to be the best alternative.
This is just my opinion, of course. I’m interested to hear yours. What do you think?
Photo by mescon
I certainly agree with your points and the last one about internet has really increased the opportunities for those who go the self employed route. The only thing I would add is that self employment is not for everyone. There will be folks out there who will not have the discipline to run his or her own business. These are people who have very little tolerance for risk taking. So one must also be brutally honest with oneself if this is the way to go despite the many benefits of self employment.
Thanks Donald,
A solid reminder why I chose to be self-employed. I think working for yourself is not all milk and honey, but once you find the right formula for you, it is a great way to work.
I’m currently advocating for the corporate way of life. Still considering self-employment, but here are some pitfalls:
1. Starting from zero. What if it doesn’t work? Where would you turn to, after having quit your employer?
2. An entrepreneur ends up working much more than a 9-to-5 employee (this is a proven point!), and it’s only normal, since it’s your business, you have every interest to work as much as you can, to attract the money you want.
3. “No matter how little they pay us, we can always work less!” is the phrase I like to think about, when I get frustrated. Then I can browse one or two Internet pages, or call in sick tomorrow. My paycheck stays the same. Not the deal with being self employed!
There’s always some ups and downs…it’s all about making the choice that’s best for you at that moment.
I was a rising corporate star, then in 2001 I was gripped by the entrepreneurial myth. I set out on my own and swiftly gave birth to an elephant.
Phase 1 – When the elephant was born I was bigger than it, could see a great future with it and foresee no problems. The only snag was that I didn’t have any skills in managing elephants – I knew how to do what what elephants did, but not how to get them to do what they did, but I thought that this wouldn’t really be a problem and off I went.
Phase 2 – The elephant soon grew much bigger than I was. I was no longer strong enough to control it and it took over my whole life. It pulled me along, wreaking destruction in its wake. Standing behind it, it blocked my whole vision and I could neither see nor know where I was going. I was so preoccupied by being dragged along by it that I thought that there is no way to ever bring it under control, it ruined my and my family’s life.
Phase 3 – I was trampled under the feet of the elephant and came around in hospital in 2008 suffering a nervous breakdown. The elephant continued (and continues) to thunder forward, but it was stolen by those I trusted with it when I was injured.
Phase 4 – My health has been ruined, my finances have been atomised and I have lost everything I every loved. I work a minimum wage job lifting boxes for an international retailer earning in a year less than I did in a month in 2001.
Would I personally become self employed again. I don’t think so!
Donald, I agree with you with one caveat:
Health care costs can erase one’s profits overnight, particularly for a sole practitioner in any field. It takes a mighty successful enterprise to cover insurance if someone if you or someone in your family has a serious condition. Once the health care reform law is fully implemented, expect some serious entrepreneurial activity to spring up.
Donald:
I agree with you that self employment is definitely becoming more prevalent. I think that you have to really figure out what your personal goals are and determine what makes the most sense for you. However, there seems to be a sense of freedom and a real ability to do things that genuinely interest you when you are not constrained by having to give the majority of your time and days to your employer.
You are right by saying that self-employment gives more freedom and flexibility. And for me it’s perhaps one of the most important factors. And because of it I find self-employment the best for me!
Thanks for sharing this post, Donald!
This is a great article because it gives hope to those who have been let go from their job and have been slightly considering self-employment. These are some great tips, Donald. Thanks for sharing!!
Donald,
I really appreciate this article. I once read one of your article and decided to start on my own 🙂 I quit my job as a software programmer, and I am currently researching on open source enterprise resource planning systems and studying accounting. This article was a boost up. Thanks 🙂
Nice post. Self-employment is definitely the way to go I believe. I can’t even begin to imagine having a boss after all my freedoms. I, as yet, having had a job – I’ve skipped all that nonsense and focused straight onto my own business – it’s working out. 🙂
Clint,
You bring up some very good points.
Eduard,
Yes, finding the right formula is perhaps the key here.
Maria,
Those are useful reminders that self-employment isn’t easy.
Rob,
What an experience. Thanks for sharing your story with us.
Ann,
That’s indeed an important point. Thanks for the reminder.
Sibyl,
That’s right, you need to connect with your personal goals. After all, it’s about your life.
Roman,
We are similar then 🙂
Jarrod,
You’re welcome 🙂
Ashik,
I’m glad this article can encourage you. I wish all the best for you!
Craig,
Glad it’s working out 🙂
I have the theory that you either are an office person or not. That answered next do you want to share your skills on your terms or others? Move on then to when you want to work (9-5, shift, from home) and finally is what you love workable into what you want to do. That leaves you with can this be employed or do I want to do it myself. That’s how I ended up in professional sport now blogging. Simple questions trying not to complicate matters. Or maybe you are a renegade, maverick or innovator who just needs to work your way. It’s how you want to do things that will decide how you want to earn that money; for another or for your self, working their ways or your way.
Some people are born entrepeneurs, others are not. I think that a hybrid is not a bad way to go. If corporate works for you, go for it, but also work on designing an internet business or consulting business that can serve as your alternate profit center. Diversification, in my opinion, is the best way for me personally. But it really depends on each person’s temperament and life circumstances.
John,
Yours is good advice. It can help someone decide whether or not self-employment is for him/her.
Steve,
I like the hybrid approach. In my case, it helped me build my business on the side until I could quit my day job.
[…] I believe that most people should try to become self-employed. But many others don’t think this way. No matter what you think, I recommend you add your thoughts to Donald’s discussion about whether self-employment is the way to go. […]
Definitely agree 100% with this. I can honestly say that I became self-employed by “accident” on a part time basis and loving every minute of it.