Go Self Employed or Stay Employed: Pros and Cons

This guest post is brought to you by Alex and Real Business Rescue.

At some point in your life you may consider an opportunity to work for yourself. While many people think about the benefits of being self employed, running their own business and taking more control over their future, they fail to think about the benefits of staying employed. It is important to consider the pros and cons of both to make sure your decision is right for you and your family.  According to The Real Business Rescue Experts you should consider the following before making that all important decision.

The Job Security

The majority of the time there is more job security when you are employed. The directors or business owners will hire people when there are vacancies and know when their cash flow and profits are struggling. Those who are self employed run the risk of losing out on money because they struggle to find clients.

However, this has changed in recent years. There are now many large businesses closing and employed people are finding themselves made redundant but with a prospect of no payout available. They cannot control the way that the business is run to help improve the profits while being self employed they would have more capabilities in gaining new clients, new lines of work and changing the way the budget is divided.

Holiday, Maternity/Paternity and Sick Pay

I Wish I could Quit My JobSomeone who is employed is entitled to a set amount of holiday pay each year – at least 28 days including bank holidays for the full-time employed. There is also the benefit of statutory maternity/paternity pay and sick pay should a person become unable to work. This means that a person can take time off without worrying too much about their income.

Someone who is self employed does not have these benefits. While it is possible to take out insurance in times of sickness and there is a maternity allowance available, there is no holiday entitlement. If you want to take the time off work for a holiday, you will have to do it knowing that you will not earn anything for the time being, which could stop you from enjoying your time off. It leads to many self employed people suffering from burnout, especially in the earlier months.

However, you can take time off when you want as a self employed person. There is nobody to answer to or ask for the time off – unlike how you ask an employer and are not guaranteed the dates, depending on when others have asked for time off. You can arrange a longer period of time off for a longer holiday but you will need to think about how you will get your clients or customers back when you return.

Ratio of Hours Worked and Money Earned

When you are employed you are contracted to a set amount of hours for a set amount of pay. You are entitled to minimum wage but the contract will limit the amount that you can earn each year. When you are self employed you have the potential to earn much more but work less time. You have control over the amount you charge for services or products and the number of hours you choose to work per day.

You have more freedom when you are self employed. You can take extra days off a week; unlike only having two per week if you are full-time employed. You can choose to work half days to spend more time with your family or work longer hours to make up for a week off; but you know that you are always earning when you work. When you are employed, you run the risk of doing overtime but not earning for it; you accumulate the time back to take at a later date.

The Type of Work You Do

Those who are self employed usually find something that they enjoy doing. It makes them want to do more and means that they are more likely to want the jobs to go well and the business to succeed. Those who work for someone else will not necessarily feel an enjoyment for their work; they may not be passionate about the area of business. Many simply have the job so that they can keep earning money for their family.

There are pros and cons to both types of work. The financial security and having paid holidays may be the ice breaker for some while being able to love their work and have the opportunity to earn more for fewer hours may be it for another. It is important to consider the needs for your family and talk to everyone involved before making the decision.

Alex writes many business related articles for Real Business Rescue.  Over the past year she has covered topics relating to HMRC, VAT, Corporation Tax as well as a wide spread of information relating to business insolvency.  Real Business Rescue are corporate insolvency experts who offer free advice and support to company directors

img credit: Day 339: Only for Now By quinn.anya, on Flickr

I Quit My Job: Where I Went Wrong

I tried, through my previous posts, to adequately cover the reasoning, and process, of quitting my job.  One thing that I didn’t cover, however, was the mistakes I made along the way.  I think that, partially, I couldn’t because I hadn’t had enough time to ruminate on them.  I also think that I couldn’t because I didn’t want to expose my weaknesses.  Now, I’ve had time to think about it, and I think I can easily identify the things that I would do differently should I have the opportunity to try again.  Maybe they aren’t all mistakes (I don’t count some of them that way).

Quitting Your Job The Right Way

One of the biggest changes I would likely have made would have been to quit the right way.  The decision I made, while necessary, was made quickly (over two days), and without much fore-planning.  Part of the motivation was that I had wanted out of the job for quite some time.  How much I wanted out wasn’t really clear until after I was out.  In hindsight, I should have started making moves well before I did.  Unfortunately, I was mired in the comfort of a position that I had held for over seven years.  Lesson learned: comfort is nice, but freedom is nicer.

Have a Full Plan B

Because of the hastiness of my departure from my position, I didn’t have a full plan B.  I had no idea where the money was coming from to even partially replace my income.  What income I had wasn’t dependable.  In a way, I was smart enough to at least get a part-time job.  But, without a full plan B, I think it was likely doomed to fail.

Wrong Way

Get After IT

This is probably the biggest mistake I made through the whole ordeal.  I quit my job, without a plan B, and then didn’t get after it nearly as much as I could have.  I wanted to focus entirely on my blogs and websites and grow them to at least a part-time income.  I severely underestimated the time it would take to do so, and should have spread my roots a bit and taken on other small projects to fill in dead time, and especially, fill in dead income spots.  Towards the end of this round of self-employment, I started to realize that I needed to pick up my game, but by then it was too little, too late.

Have an Exit Plan

Nobody likes to think that they are going to fail.  Just like nobody likes to think that they are going to get into a car accident or die, but we still buy car insurance and life insurance anyways.  While you can’t just go out and buy entrepreneurial failure insurance, you can have an exit plan so that you not only know when it’s time to move on to the next thing, but you also have a plan on how to get there.  I had none of that.  As a consequence, I probably waited several weeks too long to even begin looking for a new full-time job, and risked not getting something in time to fill in the income I needed when our savings was depleted.  I got lucky.  My first paycheck at my new position came only a few days after the last transfer from the savings account happened.  Even so, we’re still struggling to keep up without that cushion that we had grown accustomed to.

I Would Do It All Over Again

Despite all those mistakes I made, I would still do it all over again.  I know the mistakes I made, and am better able to prepare myself to not make them again.  I’m not afraid of failing.  At least not to such a degree that it prevents me from trying.  It’s a little bit like riding a bike.  You’re going to fall off.  It’s going to hurt.  But, you’re going to get back on the bike because you like riding your bike.  I like riding the entrepreneurial bike!

img credit : Crystl, on Flickr

I Quit My Job: Back to Work

This is a bit of a hard post to write. If you’ve been following the I Quit My Job series, you’ll know that I quit my full-time job back in November 2011 and have been working a part-time job and running my websites ever since.  With any journey that entails so much change, things are always changing.  Several weeks ago, I made the decision that it was about time to start looking for a new full time job.

Resume t-shirt © by WikiThreads

Why, you ask?  Do you want the simple answer, or the complicated one?  The simplest answer is that I’m running out of money, and need to earn more.  Obviously, there’s more to it than that, but that reason is the largest of the bunch.  In truth, it’s less of a reason as it is a symptom for a few other reasons.  One of the biggest of those reasons is a lack of preparedness.  When I quit my job, it wasn’t after months of planning and saving.  It was a decision that I came to after a week and was based far more on an unhappiness with the position I was in.  I don’t regret having made that decision, and I truly feel like I’m in a better situation now than I was there.  The fit of the position and I had fallen out of sync, and it was time for me to go.  Nevertheless, it wasn’t the soundest decision financially.

When I quit, I decided to give the new situation of blogging and a part-time job 6 months to see where it went.  While the part-time job remained fairly stable, the blogging income has been anything but.  My income on that front has fluctuated by several hundred dollars from month to month, and hasn’t grown at the rate that I had hoped it would.  Because of that, and the fact that I was operating on limited funds to cover any differences between my income and what we needed to pay bills, I’ve got to make the right move here and get a job.

In a way, I feel like I’ve failed.  But, sometimes, you have to fail in order to move ahead.  I’ve failed in that I wasn’t able to grow the income from this and other sites at a rate that would allow me to continue doing what I’ve been doing for the last 7 months.  I’ve failed in that I wasn’t able to see that lack of growth in time to find better (other) ways to increase my income.

I’ll be in a better place.  The new job is at a company that I feel is much more in-line with what I want in an employer.  They’ve got a very progressive business model that I feel is very unique in North Dakota, and was key in my making the decision to accept their offer.  While looks can be deceiving sometimes, I don’t think that they’re that far off.  Many of the issues that I had with my previous employer don’t exist at my new employer from what I can tell.  Time will tell, but I truly believe that I’ll like and enjoy my new job.

I’ve struggled a bit over the last few weeks, after I accepted the position, as to what it meant for the direction of this site as well as my other sites.  What I’ve decided is that Beating Broke isn’t going anywhere.  I really, really enjoy the interactions with you, and the writing that I do here.  I may have to scale a few of my other sites back a lot, and will likely get rid of a few of them as well.  I may even scale back how often I write here, but at the moment, I plan on continuing the 3 a week schedule that I’ve been keeping.

That decision is two-fold.  I enjoy Beating Broke as a creative outlet.  I also am not giving up on my dream to do this on a more full-time basis.  I want to continue to grow the site as best I can so that I might, someday, be able to come back to what I’ve been doing the last 7 months.  But, hopefully, next time, I’ll do it right and do a lot more planning and saving in order to do that.

What would you have done in my position?  What other thoughts do you have? How about questions?