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
Someone 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