The Pros & Cons of Being Your Own Boss
Working on your laptop on a beach in Bali, choosing your own work hours and holidays, only working with clients you like and choosing the direction of your career – being your own boss sounds great! But as with many things in life, many of the pros have their opposite con – Yin and Yang, baby!
In this article, I’ll cover some of these pros and cons, matching them up when they’re a pair.
If you’re unsure if you want to work for yourself or someone else, I encourage you to do your own personal Pros and Cons analysis. This is a useful tool for any decision that you have to make in life when you’re not fully confident about which option is best.
Holidays & Work Hours – Can You Handle The Freedom?
When you are your own boss, you can decide when you start and end work, what days you work, and when you take holidays. Great Pros!
The Con comes in if you’re not a highly disciplined person. Let’s say you plan to work 30 hours a week. By Thursday evening, you’ve worked 20, and have all of your client’s work done. The next 10 hours should then be spent developing your business, improving your work systems, improving your existing skills and learning new ones. If you’re employed, you have to stay in work until it’s over, even if your main tasks are done. This is not the case with self-employment, and without a strong ability to discipline yourself, it’s easy to stop working when the essential tasks are done. It takes commitment and discipline to push through and do the work that isn’t essential this week, but is vital for your career to grow. I suspect this is a challenge for many setting out on the self-employment path, as the kind of person who resists the idea of having to work for someone else is often the kind of person who wants to maximise their freedom and hence get away from their desk as soon as possible.
Parkinson’s Law comes into effect here. It states that
‘Work expands so as to fill the time available for its completion’.
This means that if you have three weeks to finish a project for a client, it will probably be three weeks before it’s finished, even if you could finish it sooner. This can become an issue as projects start to build up. Tackling this issue requires the discipline to set self-imposed deadlines on your projects.
Another issue here is that sometimes you’re going to be forced to work long hours.
When you work for yourself, you have to do enough hours to make enough money to support yourself and the business. That’s not negotiable. If you’ve done 50 hours Monday to Friday and haven’t made enough to pay your bills for the month, you’re going to be working during the weekend. If there are issues with a project or a client, you may have to do hours outside of your office hours, even late into the night – though as your business grows and you grow as an entrepreneur, you’ll get better at preventing those situations.
Counter-balance your desire for freedom with the discipline to work on growing your career, and not just doing the critical work. Be prepared to work for longer than expected some weeks.
Hello Unrestrained Income, Goodbye Employee Benefits
A big Con of self-employment is that you kiss goodbye to a consistent wage when you start your own business (at the outset at least). Many self-employed people will often go through periods of ‘feast and famine’; months where you make a lot of money, and months where you don’t make enough. The end goal is to be able to provide yourself with a consistent wage, but that’s often not something that happens until the business is well established and has a lot of clients.
You essentially lose all the benefits associated with being an employee – holiday & sick pay, health benefits, etc. You can take sick days whenever you want if you’re self-employed but you’re paying yourself out of the business bank account and that’s not something you can do regularly.
The Pro (which tends to come after months of living through the Con) is that there is no upper limit on your income. If your goal is to earn €500 a week, and you’ve done this by Thursday, you can try to find work for Friday that gets you an additional €100. If you finish your important work by Thursday while being employed, you’re going to be working Friday for the same amount of pay.
In a job, your boss dictates your rate of pay and your pay rises. When you work for yourself, you can increase your rate of pay by continuously upskilling and improving your skills, allowing you to produce more value for a business per hour of work, and hence charge more money (see Working For Yourself Pt.1: How To Earn Create Value For Other People for more on this).
Filling Many (chicken) Roles
Being your own boss requires you to fill many business roles, or said another way, to wear many hats, such as:
- Manager – managing your own time, prioritizing tasks and projects
- Sales – bringing in enough work to keep your company functioning
- Accountant – managing your income and expenditure, paying tax, paying bills
- Technical work – the hour-by-hour work you’re carrying out and billing for
- Entrepreneur – coming up with new ways to earn money and grow your career
You might not like wearing all of these hats, in which case this is a Con. Some people will enjoy the challenge it presents and the wider variety of work, others will only want to do their core technical work and dislike the rest. Part of your decision on whether or not you will become your own boss will depend on whether or not the overall Pros of working for yourself and doing your enjoyed technical work outweighs the Cons of having to spend time each day wearing these other hats.
If you do enjoy wearing these many hats, rejoice in this Pro!
An important point here is that since multitasking is a bad idea, you need to be able to manage your time well, in order to batch the tasks that fall under each ‘hat’ together; if you’re switching between these ‘hats’ constantly, you’re trying to multitask and this reduces your productivity. Best to take care of your sales work in one go, then the accounting work, then your technical work, and so forth.
Choosing your own Career Path
As an employee, you work generally follows the direction set out by your boss. But when you enter the world of self-employment, the direction that your work & career takes is completely up for you. This is a Pro if you enjoy this freedom and want to be able to explore different industries, skills, and ways of earning money and providing value to other businesses or customers. It can be a Con if you’re not confident about the direction you should take. It’s a big, bad world out there, and often it can feel overwhelming, especially when you’re the captain of your own ship. Employment brings the advantage of steering the ship for you – your boss takes care of the navigating and you do the work that the particular course brings. Consider whether or not you have a good enough grasp on what you will be doing to earn money in light of the fact that how and what is done is entirely down to you!
Working with a Partner
One thing that’s worth mentioning is that all of these cons can be mitigated by working with a business partner. My business partner, Oliver, can solve some of the problems that I can’t, cover my hours if I need to be somewhere, wear the hats I don’t wear well, look at my decisions in a different light, etc. We support each other by supporting the business together. While it’s possible to hire people to do these things for you if you have enough money, you can’t beat having a business partner; if I hire someone to help with web development on a tricky project, they can’t be too flexible since they have other clients, and usually won’t (for good reason) work outside of their hours for me; Oliver, being committed to the running of the business, will. The cons of being a business owner are much easier to face and overcome when you have another person by your side, whom you trust and work well with. However – make sure you choose the right partner, as picking the wrong one can turn into a con in itself. I worked with Oliver on a big school project (F1 in Schools Challenge) that brought us to Abu Dhai, and had a go at running a hardware startup with him that brought us to Boston; we had worked hundreds of hours together and travelled the world together before we decided to work together on a business that would be our livelihoods.
I feel that the best way to handle these challenges & cons is to start small. Sell a service part-time while you work your main job. Learn the ropes, send your first contract and invoice, get experience step-by-step. I was working as a freelancer on and off for six years before I was able to move to Thailand and support myself – don’t jump into the deep end unless you know you can swim!
Having said all of that, the pros outweigh the cons; otherwise we wouldn’t still be doing this. If you have the determination, skills and qualities needed to make the pros outweigh the cons, then being your own boss can be a viable and enjoyable alternative to being an employee.
Hopefully, the above information has helped you to work out some of the potential Pros and Cons of working for yourself. Be sure to think on these yourself and work out what other ones there are which will apply to you – there will be others depending on what skill you choose to learn, what industries you choose to work in, where you live, and other factors that change from person to person.
Let me know if you think I’ve missed any crucial pros and cons, or have any questions about them.
If you’re still unsure about whether or not self-employment is the right path for you, have made the decision that it is, or just want to learn more about what’s involved, check out the first post in my series ‘Working For Yourself’.