Is self-employment right for you…? The 6 pros and 6 cons of self-employment…

Published 03 January 2020 by Pendragon

Do you Want to work for yourself…?

Many entrepreneurs or home-based business owners are, or have been self-employed. It is recommended before you follow their footsteps, you do a thorough self-evaluation if you are really ready and suitable for adapting the self-employment culture.

Pros:

  • Decide your own work hours.

Yes, you get to decide your own working hours and this is one of the most common reasons for taking up self-employment, as it gives you an opportunity for better work hours. You can take an afternoon off, or an early start and early end, have a long lie-in or take random days off. Freelancing gives you a lot of flexibility with how you arrange your working hours and improved quality of life.

  • Work where you like.

Many office-roles and small businesses can be carried out wherever there are an internet connection, a mobile phone and a computer. Stay at home, work from the nearest café, rent a co-working space – it really doesn’t matter unless and until you are scheduled for a meeting with any of your clients. You get to choose your own location
(or work from home), which saves you from expensive and stressful daily commute!

  • Create your own

In most roles, your hourly rate is going to be much higher than what you would earn in a full-time job. You will never complain about your income as you will be solely responsible for your own success. This could also turn into a major factor of your success and motivate you to work harder as there would be a correlation between your effort and your income.

  • You get to choose your own co-workers.

Self-employed workers are not forced to deal with any frustrating clients or annoying co-workers. You have the power to decide whom you want to associate with. You have a choice to work alone or create your own team.

  • Creative freedom.

By going self-employed, you will be in charge of decision-making. Hence, you have the freedom to explore several creative solutions that arise and have the satisfaction of seeing your ideas through to completion. You are free to carry out more fulfilling tasks that you believe would make the best utilisation of your skills.

Cons:

  • Lack of employee benefits.

Sometimes if you are self-employed, you can’t afford to be sick because you will potentially miss out on earnings. Being self-employed means, you are not eligible for employee benefits like sick leave, annual leave, guaranteed superannuation, or some company benefits.

  • Long hours.

Your working day/hours might be much longer and more irregular than someone who isn’t self-employed. Sometimes business commitments mean you get to spend less time with your family, friends, kids, or the struggle to switch off from work.

  • Social Isolation.

A common experience for people who don’t work in a regular work environment is that they struggle with being alone during working hours for days and weeks at a stretch. You may miss teamwork and basic human contact, as there’s no one to discuss your work with.

  • Unpredictable finances.

When you are self-employed, your income can be irregular, especially in the early days. There would be days when you are very busy with clients and earning profits, and then the days when there is none at all and irregularity in payments. (but you still have to pay rent, insurance, repayment of loans and bills etc).

  • Do your own

Methodological bookkeeping is required for all small businesses and is very time-consuming. Hiring an expert may be very expensive and having to do your own bookkeeping may result in less time and focus on your core business and costly mistakes.

  • High responsibility and pressure.

You are in charge of your superannuation, relevant work-related insurances and completing your quarterly BAS return and your self-assessment tax return. The fact that success or failure is down to you can increase your stress levels.

Therefore, if you are looking to set-up a business of your own in Australia and or become self-employed, we would say it isn’t always going to be smooth sailing…. Look at extracting the good from the bad and make the most of having the freedom to do your own thing.

If you would like further advice on setting up on your own, or perhaps a smoother route please don’t hesitate to talk to us….