The Pros and Cons of Being Self-Employed

It seems like everyone wants to be self-employed, even if they don't exactly what it is they want to do. The "no boss" thing sounds tempting I'm sure, but it's not always the carefree life people expect it to be.

Cons:

It's true that there is no boss to watch over you. Instead, you will have hundreds of bosses in most cases. If you are self-employed, the chances are you have multiple clients to sell to, consult with, or provide a service to. Those people are your bosses. And if you make them mad, you're not guaranteed a paycheck at the end of the week anyway. This is both a pro and a con for the self-employed. Owners of small businesses, depending on the market, may get to choose these new bosses but often the opposite is true. An entrepreneur may end up doing work out of necessity for someone completely odious. Once you have someone send you 20-30 emails a day asking pretty much the same question, the old boss back in the corporate world starts to look pretty good.

Being self-employed doesn't have to mean that you have no insurance. There are many, many plans available to entrepreneurs. These will vary from state to state in price, but they usually have one thing in common. They're crappy. They're necessary to protect yourself from serious medical expenses, but they're still crappy. Please see Finding Health Insurance When You are Self Employed for more information on the types of plans available.

If you are able to work at home, great! You get all the work of an outside job, plus more, with the added bonus of all the distractions of home. Add to that the deliveries that come to the door, the personal phone calls coming in, and the people who come over in the middle of the day because you are self-employed and don't "really work." Working at home is often far less productive than working outside the home with fewer distractions.

The self-employment tax is just the amount of taxes that the employer would have paid on your behalf that you now have to pay by yourself. So, you get to pay all of the taxes, plus buy your own health insurance. These factors alone are enough to sink many small businesses.

Pros:

I can eat macaroni and cheese at my desk if I want. No boss watching over me means I can do what I like during business hours, as long as my work gets done and I somehow make some money. No one is there to second guess my plans, and no one will ever know if I duck out to go to the mall for a few minutes.

The money is not capped by a specific salary. The amount made by the self-employed is largely up to us. We don't have to ask anyone for a raise, or deal with any salary caps.

Vacation flexibility is a big pro in my book. The self-employed don't have to ask for vacation time, and they don't have to work a set number of years to earn their specific vacation time. If you are disciplined and can get enough work done to be able to take a week off, bon voyage.

There are hundreds of other little pros and cons to being self employed, but these are the biggies. Deciding whether having your own business is a good idea is largely about weighing these factors.