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Is running your own business right for you?

Running your own business is it right for you

If you’ve recently lost your job, or you’re unhappy in your current role, self-employment can seem an attractive prospect. Running your own business, and being your own boss, means no longer having to work for someone else. It can also have significant financial and work/life balance advantages, and bring great personal satisfaction.

But it’s important to be realistic about what self-employment entails, and to be aware of potential disadvantages such as not having a regular income and long hours.

We all know about the perceived benefits of self-employment: choosing your own hours; pursuing your passions and being in control of your professional destiny. If this is your career goal, you should take steps to achieve it.

However running your own business may not be the answer to your employment dreams. Here are some of the potential issues, and some advice on how to overcome them.

Income uncertainty

If you are keen on becoming self-employed, you can be sure it will cost you more than you expected. Unlike salaried employees, business owners do not have the financial cushion of a regular wage or benefits such as sick pay and holiday entitlements. As well as being uncertain, your income may be substantially lower than you anticipated – especially in the early stages of establishing and building your business. And for many business owners, their income will remain lower than their employed equivalent. While it is possible to grow your business into a significant entity, making a fortune when you sell it on, few actually achieve this.

Financial management is critical to the success of a business. Find out how much funding you need, where you can get it and how to manage your financial arrangements. Draw up a budget to ensure you will have enough money to live on.

Daily grind

One of the perceived benefits of self-employment is the ability to set your own working hours. There’s also the attraction of spending less time at work and more time with family and friends, while still earning a full-time income.
But research suggests self-employment doesn’t provide a better work/life balance. While self-employment offers the flexibility to control when, where and how much you work, in reality the uncertainty about future work can make you feel like you have to accept all work offered. The University of South Australia has found self-employed men tend to work almost a full day extra per week compared to men who are employees.

Decide at the beginning how much time you want to devote to your business. And remember that you don’t have to achieve all your business goals in a matter of weeks!

Isolation of self-employment

Office politics is a common complaint of employees, so escaping annoying colleagues, bureaucratic and/or hierarchical workplaces and other irritations is an attractive prospect. However the isolation factor is one of biggest drawbacks of being self-employed. As well as being lonely, it can be hard to maintain motivation when you are working for yourself. The novelty of the first few months can wear thin, leading you to question why you made the decision to start your own business.

Some of the ways to counteract isolation include:

  • Interacting with clients
  • Joining a networking group
  • Meeting other local self-employed people.

Running your own business – the boring stuff

When your manager gives you yet another task that doesn’t interest you or harness your talents, being able to choose to do something you enjoy, and having control of which tasks you do, is tempting. Self-employment should put an end to those tasks you’re not keen on, right? Wrong. In reality, running your own business means you’re going to have to spend time doing things you probably dislike and aren’t very good at as well as the things you love to do. These could include generating work and leads, promoting your business, bookkeeping and administration.

Although you will still need to take responsibility for these aspects of your business, you may be able to outsource some tasks enabling you to focus on driving your business forward instead.

Hanging in there

Businesses often fail when they fail to live up to a romantic ideal. Self-employment, in reality, is often challenging and uncertain. Setbacks can make you feel your dream is hopeless and doomed to failure. Knowing some of the difficulties and potential setbacks won’t prevent them from happening, but it can help you be prepared for the challenges and inspire you to overcome them.

If you want to earn lots of money and work fewer hours, working for yourself is likely to be a disappointment – maybe you should think about making changes to your current job instead. But if you are aware of and prepared for the realities you may face, self-employment could bring you great satisfaction and the lifestyle you dream of.