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What are the advantages and disadvantages of going self employed?

The advantages of being self employed are:

  • You are your own boss – something which can be very satisfying.
  • You will naturally work in different roles and for many different companies – this will help you to build a unique range of skills and experience.
  • You have the freedom to work when and where you choose, and for however long you like.
  • There is a direct link between work effort and reward, which sometimes doesn’t exist as an employee.
  • You have more flexibility over the payment terms that you can negotiate.
  • You can work for multiple clients at the same time, on many different projects, which can also increase your pay.
  • Depending on your individual skills and the state of the industry in which you work (or the market in general) you can command very high rates of pay.

However you also need to consider the following:

  • You do everything yourself and are responsible for the day-to-day running of the business.
  • You will rarely have the resources at your disposal that are available to an established business owner, and this may mean doing tasks that you dislike.
  • Large salaries or income are rare in the early days – but you could be lucky!
  • It is not unusual for newly self employed people to have a second job to help provide a guaranteed source of income for day-to-day living costs. Or you could even start working for yourself when you are still in full time employment, providing your employer is OK with it.
  • You need to offer a product or service for which there is demand. This may depend on projecting a certain image, perfecting a technique or making a product unique.
  • Expanding too rapidly, or conversely not being quick enough to seize a chance, may be detrimental to your business.
  • Working from home is the most effective when you have the space and facilities to do so. If you work from other premises, you will need to pay rent and other overheads.