Employed Vs Self Employed Pros and ConsPosted by ICS Admin Under Financial Planning On July 10, 2018
Have you been wondering whether to continue working with your employer or to start something on your own? This can be a challenging situation especially if you are trying to strike the family-work balance. Before reaching a decision, it is important that you understand the difference between the two options. The transition from an employee to an entrepreneur is not an easy one. If your goal is to have more focus on your area of interest or have more quality time for yourself, then you must enter the self-employed status. Self-employment can also be a great option if you have a passion such as cooking, teaching or designing. Although there will be an initial struggle of launching your business, if it turns out to be a success, you can enjoy awesome rewards. Self-employment also gives you a sense of achievement, unlike the routine corporate job profiles.
When you transform to be an entrepreneur from an employee role, you will face a lot of challenges. Self-employment is a platform where no one dictates you what to do or what is best. You have to find out the best ways of operating a business and generate revenue. If you are planning to launch a new venture, make sure that you have enough capital fund ready. Nowadays banks offer many types of loans to encourage budding entrepreneurs. When you are making a decision to venture into self-employment, support from family & friends can be extremely helpful.
What is Self-employment?
If you are a self-employed person, you are a business owner, a freelancer or a consultant to various clients. The revenue is received directly on the basis of your service or contract. No fixed income or salary is applicable for self-employment. You may also have a business partnership to carry out the services. When you are self-employed, you can control your work load and enjoy flexible working hours.
Pros and Cons of Self-Employment
- Flexible timings
- No supervisors to control
- Savings on travel/commute
- Focus on your area of interest
- Enjoy the profits/surplus revenues
- Risk involved in decisions
- Lack of guidance & shared decisions
- No fixed amount of salary
- Losses involved in business
- Income Tax should be filed independently
- No Insurance coverage & Provident fund
Working as an Employee
The major benefit of being an employee to an organization is the regular salary that you receive at the end of the month. The responsibility of work is limited to certain fixed domain and may not require new skills. Thus the employee only needs to focus on the most relevant area of work allocated by the employer. On the contrary, if you are self-employed, you may have to learn the nuances of almost all business segments such as sales, marketing, technology, customer service, etc.
You have to make a choice for yourself based on your interest or passion. If you are looking for more freedom at work, go for self-employment. In case you are more comfortable working as a paid employee; you are eligible to enjoy benefits like expert guidance from senior managers and work incentives.