The Pros And Cons Of Being Self Employed

Self employment is a growing area and there’s no getting away from it. As of November 2021, there were just over 4.2 million self-employed workers in the UK. This grew steadily from a low of just 3.2 million in December 2000 and went to a peak of over five million at the start of 2020 just before the pandemic hit.

Being self employed is totally different for every person who is declared as so. For example, I am self employed, but this is alongside a full-time job. So my self employment is an additional revenue stream. For Luke, he is self employed but is provided work by someone most of the time. Whereas others who are self employed have to promote themselves and go out looking for work. So there’s no hard and fast rules when it comes to self employment.

From the outside, it might seem like there are loads of perks of being your own boss. And while this is trying to some extent there are plenty of negatives including sole responsibility and the additional pressure.

Here are some of the pros and cons of being self employed.

Pro of being self employed- Flexibility

One massive pro of being self employed is flexibility. You’re able to manage your diary and do what you want when you want. If you’re a massive night owl you can work 8 pm-5 am if this fits your lifestyle better. If you want to take 2 hours off in the middle of the day to go on a walk or take an exercise class you can.

You can basically do whatever you want to do, how you want it, when you want it, right? That’s why people love it. You get to make the rules, you get to print out the rules, you get to use whatever marketing materials you want, be it on foam signage, billboards, or even just an Instagram ad. But you get to call the shots!

And you’re able to prioritise what work you want to do and when as you set and work on the deadlines. So if you really want to spend a day being super creative and drawing up new illustrations for something you’re working on, then as long as it doesn’t impact other work you can.

Con- Having to know about running a business

When you’re an employee you don’t need to get into the nitty-gritty of finance rules, tax rules, and HR standpoints. These will be taken care of by a specialised person or team. But when you’re running your own business you will need some knowledge of all of these things. Even if you hire an accountant to do your taxes you’ll still need some knowledge yourself.

This has the potential to be confusing, even down to how to set up your business. Are you self employed, are you a sole trader, etc? There’s so much information out there that you need to be careful to get the information relevant to you. If you have US-based interests or partners, it may be beneficial to seek Goldstein legal patent advice to ensure your intellectual property is protected across borders while managing your business.

Pro of being self employed- Choosing the projects you want to do

Another pro of being self employed is having the freedom to choose your projects and workloads. Some people opt to leave conventional jobs so they can do more of the things they love. While you might not want to be too picky, to begin with when you’re looking for work you’ll hopefully get to the point where you can turn down work that doesn’t interest you or isn’t what you want to focus on.

Con- Pressure to find work

In contrast to this, you will need to go out and find your own work. You may have started off doing some self employed work on the sideline and are transitioning to this full time so you already have some clients or work coming in. Or you may be opening or starting a brand new business and need to start from scratch.

Pro of being self employed- Being able to take time off to suit you

This connects with the flexibility point above, but when you work for yourself you monitor your holiday and days off. So if you want to work a 4 day week great. If you want to take next Tuesday off to go to the spa go for it. And if you want to take a month off over Christmas then good for you. As long as you factor in your workloads, deadlines for clients, cover if needed then you can be off whenever you want.

Con- No paid holiday or sick leave

When you are self employed there’s no such thing as holiday pay or sick leave like you’d get at an employed job. So great if you want to only work 2 weeks a month, but can you afford to not work the other 2? I love that I have a set number of days off from my full-time job so take some days off when I just need a break. Whereas Luke only takes days off when we specifically need to such as for a holiday or wedding.

You may want to consider income protection if you are self employed and would struggle if you got sick for a prolonged period of time or couldn’t work.

Pro of being self employed- Unlimited earning potential

When you start a business there’s unlimited earning potential subject to what your business is and your overheads. So it can be a great way to earn more money. But remember there is also the risk that you may not earn more, even if you work longer hours and harder. There are no guarantees.

Generally, those who are self employed are paid more than a permanent worker. This is due to the instability of their work and lack of perks. Plus you’re paying for a specific specialism. So the earning potential can go up further.

Con- No guarantees of money

Following on from above remember if you’re self employed you have to be prepared to earn differently from month to month. So you need to make sure you budget, have a financial safety net just to be safe and know how much you need to earn as a minimum to survive the month.

The pandemic showed us how difficult it can be as a large number of self employed people ended up with zero work as they couldn’t do their jobs properly.

Pro and Con- Doing your own taxes

Now you may wonder why I’ve put doing your own taxes as a pro and con but stick with me.

Of course, the physical time and having to submit your taxes is a con. When you’re employed it’s just done for you, taken from your wages and you don’t have to think about it. But even if you have an accountant who does most of the legwork for you you’ll still need to collect receipts, keep notes of payments and share them.

But a pro is definitely visibility. When you’re self employed you really look at your incomings and outgoings to see what you’re earning and where you’re spending it i.e. how much your business is costing you. You may find if you incur a lot of expenses you actually end up paying less tax than if you were employed.

Other pros and cons of being self employed

• Pro- only being accountable to yourself and your clients without a real ‘boss’
• Con- it can be lonely as you don’t always have proper colleagues like you do if you’re employed
• Pro- being able to try new things when you want to
• Con- there’s no employer pension scheme to potentially add to your pot, so you’d need to set up your own
• Pro- the additional skills you’ll learn being a business owner will be invaluable
• Con- if you’re a business you will need additional business insurance
• Pro- your business becomes your legacy
• Con- you may end up working more hours than you would in a 9-5 job

Are you self employed or have you ever been?

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