Leaving behind the comfort and familiarity of a regular job and a reliable paycheck is a daunting prospect for many budding entrepreneurs. Indeed, the fear of becoming self-employed often scuppers many great, profitable ideas. Yes, there is no denying that being self-employed has its challenges and that not everyone has what it takes to grow a successful business. But if you feel that you have a great idea, are persistent, determined and resourceful, then being self-employed offers a potential lifestyle you’ll never realize as an employee. What follows is a list of 10 of the biggest benefits of stepping out of your comfort zone and becoming self-employed.Leaving behind the comfort and familiarity of a regular job and a reliable paycheck is a daunting prospect for many budding entrepreneurs. Indeed, the fear of becoming self-employed often scuppers many great, profitable ideas. Yes, there is no denying that being self-employed has its challenges and that not everyone has what it takes to grow a successful business. But if you feel that you have a great idea, are persistent, determined and resourceful, then being self-employed offers a potential lifestyle you’ll never realize as an employee. What follows is a list of 10 of the biggest benefits of stepping out of your comfort zone and becoming self-employed.
1. You control your life
Many entrepreneurs are the type of people that like to take control and make decisions. As a self-employed business owner you have the freedom to make decisions that shape the present and future for yourself and your family. Your destiny is in your own hands. As an employee, however, your financial status is intrinsically linked to the success of your employer.
2. You get to choose your hours
Being self-employed means you get to choose when you work. Rather than being contracted to set hours, you can start as early or late as you want. Although this inevitably provides a much desired level of flexibility, the self-employed entrepreneur must be disciplined in order to run a successful enterprise. Balancing work and family life can be difficult, but running your own business affords you the ability to take time-out when needed. As long as you’re realistic and don’t award yourself too many vacations, a well-run business provides many lifestyle benefits you simply don’t get as an employee.
3. You get to work with people you like
When you’re an employee, you work with people you like and others you very much dislike throughout your career. As an employee, you don’t get to choose whom you work with. If you don’t like your co-workers, tough. But that’s not the case when you own your own business. You get to make the decisions about who to hire and fire, and you can build a team aligned to your personality and goals.
4. You get the rewards
Sure, as an employee you’ll get paid overtime for putting in the extra hours. But you’ll rarely get a share of the profits generated from that work. Whereas when you’re self-employed, you get to see the financial results of your hard work. Yes, starting a business is never without risk, But if you get it right, the rewards far outweigh that risk.
5. You can follow your passion
If it’s just about the money, forget it. The most successful business owners are rarely purely motivated by money. Invariably, they love their product or service or just love building a business. They want to make things better, cheaper or easier. Being self-employed helps you escape the trap of working in a job you hate and allows you to turn your passions into a business.
6. You get to live a varied life
Honestly, I don’t think I could ever go back to punching the clock for an employer. Arriving and leaving at the same time each day. Knowing exactly what each day will hold. Is that in any way exciting or inspiring? Being self-employed is often like being on a roller coaster. No day is ever the same. You’ll get used to dealing with orders, accounts, sales, complaints, celebrations and bereavements all in the course of your working days. It’s rarely dull…
7. You create
Being creative is uniquely satisfying. The very best entrepreneurs are often creative people with a desire to solve problems and make life better. In fact, the actual process of building a business is creative in and of itself. When you own your own business, you get to shape the dreams of yourself and others. You’re always building.
8. You get to help people
Being able to help people is one of the main benefits of being self-employed and running a business. Even a very small local business helps people by creating jobs and supporting a community. Maybe you’d love to create a program that improves education among children? Or create a service that improves the lives of local families? Owning your own business can help you achieve these goals.
9. You can make a stand
Being self-employed means you can stand up for what you believe in. Not only do you get to build a business that provides a product or service that benefits others – you are also able to create a vision, goals and an ethos that inspires those that you employ and serve. You can truly change people’s lives.
10. You are rewarded with self-fulfillment
What if you never took that step? What if you let a fear of failure condemn you to a life of mediocrity? If you find yourself dreaming of running your own business and of making a difference, you must not let anything stand in your way. The lessons you learn and the pure sense of self-fulfillment trump any fleeting fears or failures. It’s a journey truly worth taking.
Featured photo credit: Unsplashvia unsplash.com
There are quite a few benefits when it comes to being your own boss, but the financial benefits are usually not top of mind. They're generally included pretty far down on the list, after thinking about long lunches, no commute, and the ability to stay in sweat pants (or no pants) all day long.
But the financial benefits of self employment can be even more appealing than the sweat pants/no pants benefit. These benefits don't come easily and they don't come without a fair amount of old fashioned hard work. But if you're self employed you're no stranger to that.
1. Understanding the real value of money
I remember when I received both my first paycheck from my corporate job and my first paycheck when I was self employed. I was proud and excited by both. But looking back I realize there was a subtle difference in how I viewed that money. With my corporate paycheck I was excited to see money in the bank because it had been a hard first few weeks of work and I had bills to pay. With my self employed paycheck I loved and appreciated every single dollar. I knew how hard I had worked to earn each dollar and how hard I would need to work to continue earning my own money.
I've always had an understanding of the value of money, but it has never really been so profound as when it came from self employment. I now find myself spending smartly and spending less. Not because I've become more frugal or scared to spend my money, but because I know how much work went into making it and I need to really love how I'm spending it.
2. Knowing you have skills others will buy
While it may seem counterintuitive, there is a lot of financial security in self employment. You may not know where your next paycheck is coming from or how large it will be, but you do know that you have skills others will spend money on. Whether it's creating a product or a service that people buy, you know how to hustle and how to make money on your own. You don't need to worry about layoffs, corporate downsizing, or a bad boss. The longer that you spend in self employment, the more confident you become in your ability to survive and thrive on your own, regardless of the situation.
3. Retirement Savings Options
You may not have an employer match anymore, but being self employed you can still put aside a lot of money tax deferred, and you can choose the retirement plan that works best for you. I won't get into the technical features of how great it is to invest tax deferred dollars, but basically you have the opportunity to prioritize your retirement and create a healthy nest egg.
If you are self-employed and don't have any other full time employees, you can participate in a solo 401k or a SEP IRA. For the solo 401k you can contribute $18,000 as the employee plus 25% of net income as the employer (up to a total of $53,000 per year). With the SEP IRA you can contribute up to 25% of net self employment income (up to $53,000 per year).
4. Expense Deductions
Whenever I tell someone I am self-employed their typical response is "that's amazing. you can deduct everything and you won't have to pay taxes!". While the concept of expense deductions has been blown out of proportion (no, you likely can't deduct your haircut), there are a lot of things you can deduct.If you're a sole proprietor, these amounts will reduce your net income, which is what you pay self employment and income tax on. It's important to stay organized and strategic, and to not treat deductions as an afterthought. Some potential deductions include:
- computers and office equipment used in your business
- auto expenses on a car used for your business
- startup costs, up to5,000
- professional fees (lawyer, accountant, etc)
- travel expenses incurred on a business trip
5. High risk, high reward
There's no doubt about it. Self employment is not for the faint of heart. But with passion, drive, and discipline you can reap not just lifestyle benefits, but serious financial benefits as well. That point was made clear in The Millionaire Next Door by Thomas J Stanley and William D Danko. They found that though self-employed people only make up 20% of the population, two thirds of working millionaires are self-employed.
When you work for yourself, you're in control of your own destiny. The money that you make or save impacts your personal bottom line, not that of a corporation. You're not standing in line for a promotion or hoping that you're included in the bonus pool this year. There is a lot of risk, but it comes with some amazing rewards.
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