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Thursday, February 2, 2012

Self Employment Pros And Cons

Like every other profession, self-employment too has its own pros and cons. If you want to know, what will be your likes and dislikes later, first let's see: "I ask because I am considering self-employment." What are the reasons that prompt you to consider this?

1. Many people think once they are self-employed, they will be their own boss. Wrong ! Once you become self-employed, you will have so many bosses and you will have to meet their standards and their deadlines. (Every Mary sitting at the reception desk of a client now becomes your boss and if you are not friendly with her, she can curtail your access to the boss.) So, if you want to start a business, to become 'boss-less', well, you have a shock coming your way.

2. You want to become self-employed to make more money: well, you might make some dough, but, it will take at least 2 years, assuming you are lucky and/or you have an incredible product or service.

3. You want to be self-employed to spend more time with family. Not a good reason, unless your spouse already is earning in buckets. Self-employment means commitment to your work and clients, 24x7x365.

4. You want to become self-employed because you want to realize your potential and you feel money earned from it is incidental. Well, if this is the reason, you should take it up.

To be truly self-employed is almost always to be an entrepreneur, however small the scale of that role may be. Self employment is _not_ the same thing as being a contractor - a common enough role that is more often than not just a thinly disguised form of employment. To succeed at self-employment means having to take on a whole range of new skills or to amplify and use existing skills to best advantage; one is a sales person, a marketeer, a book-keeper, a designer, a manager, a writer, a logistics person and then when all those tasks are completed one still has the paying work to do; in short one may well be working 18 hours a day 7 days a week.

This is not a role that fits everyone; it requires passion, committment and motivation and a realistic understanding of the scope of the project.

In other words one is setting up in business - the fact that you are or will be the only employee is irrelevant. Like any other business it's necessary to have goals and a plan and not start out with the expectation that you will be making money - let alone a profit - from day one. These days one is lucky indeed if one can take any new business from startup to to break-even in a year. It's essential to be realistic about the funds you will need to get through that first year - and where they are coming from; maxing out credit cards or borrowing to get going is rarely a sane or sensible move *unless* you have already secured at least a couple of clients at sensible rates of remuneration.

Which raises the issue of how one calculates tha daily/weekly or other rate. In order to do that you need to know what simply staying alive costs you every year, and what your business expenses are likely to be; that allows you to calculate a daily rate, knowing that in the first 6 months you will probably only be working for money at 25-40% of your capacity - somewhere between 5-7 days a month.

If you choose this road, it is an act of entrepreneurship and should be seen as such. Entrepreneurship can be chosen as an act of desperation or a conscious choice. To say there is no security on this path is an understatement. However, once you accept responsibility for your career and its management you become the "boss", you set your own objectives, and although no one is really in control, you have the freedom to set your own agenda.

The best advice to give to someone about to walk on this road is to strongly suggest to view this act positively. Make a "business" plan even it is simple and set yourself milestones to achieve. Work methodically and with a clear sense of purpose.

If you handle this the "right" way, and I might add that there is no one right way, You will wonder why you didn't become an entrepreneur sooner.

Now, ask yourself: why do you want to become self-employed? Therein lies answers to the likes and dislikes of the profession !

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