A self-employed person works only for themselves while dealing with clients. They have no employers and do not wage consistently. In self-employment, you must update your taxes by yourself, and it is not withheld directly by the government. Self-employment creates room for flexibility with an enormous risk of employment.
Employed Versus Self-Employed
Employed people have a specific employer and expect consistent salary after a while, which could be weekly or monthly. The success or failure of the employer does not affect them directly. The employed also enjoy employment rights, benefits, and compensations.
Self-employed people work for themselves, whether it is freelancing or blue-collar jobs, and are solely responsible for the success or failure of the business. There is no consistent wage and also employment benefits like life insurance.
Types Of Self-Employment Are:
- Business Owners
- These are professionals not tied down to a specific employer.
- Salespeople
- Farmers and fishers
- Actors and Musicians
- Writers
- Make-up Artists
- Photographers
Kinds Of Self-Employment
- Sole Proprietors
They are the sole owners and operators of an incorporated business, primarily a single individual. Being a sole proprietor does not mean the owner runs the entire operation alone. He/she can hire employees to assist.
The sole proprietor gets all the profits gained in the business and covers any losses faced.
- Independent Contractors
These are individuals hired to perform a particular job for a client and are only paid for that job. They do not get employee benefits and compensations as they are not considered employees. Their taxes are not withheld by their clients from the payments of work attained.
Some examples of Independent contractors include blue-collar job workers, doctors, journalists, freelancers, and actors.
- Partnership
A Partnership is an organization between two or more people managing and operating a business together. The partners get to share the profits, and in case of losses, they also face them together. The difference from sole proprietorship is that there is two or more people in the operation and managing.
Benefits Of Being Self-Employed
- Power, Flexibility and Freedom from a daily routine
The people or companies you choose to work with are your customers and not employers. Customers can say what outcome they expect from the work, but they do not have the power to command how you work. Self-employed allows individuals to work for things they have a passion on and enjoy doing. Here you are the boss of yourself and can determine what to work on and how. It frequently allows you to work from home, saving time and money that would have been lost on commuting. However, you have to please your clients’ needs to get more referrals.
- Monetary Rewards
Self-employed businesses can be very profitable as companies prefer independent owners to run their business. Companies don’t need to engage in long-term commitments like a pension with permanent employers by choosing independent contractors,. Thus they will be more than willing to pay self-employed contractors more than is required.
- Creative Freedom
Decision-making depends on you and thus, allows you to find creative solutions which might arise. You can make abrupt changes that need urgent solving without going to a position higher to ask for permission. And have the satisfaction of seeing the outcome of your problem-solving skills.
- Independency
You have the independence to customize and set your working hours to fit other commitments you might have around you.
- Job Satisfaction
The satisfaction of reaping rewards of work done while doing what you love and enjoy.
- Location
What better place to work from, other than home? A place where you are 100% comfortable and you don’t have to worry about a mean colleague or office politics. You can enjoy a family vacation with your family while still running your business comfortably. Most self employments will give you the privilege of location flexibility.
- Control Over Your Business
You have control over all areas of your company. You can choose designing elements to make your brand unique and the clients you want to work with. It is also up to you to decide the location of the business and its working hours.
- Putting Your Skills To Work
Developing a business from zero needs you to determine the goal. People mostly decide to start a company within an area they are passionate about or are well skilled at. If employed, you will be limited on exploring the scopes, making your skills dormant. As the owner, you get to control what to do. You can also hire someone to help you run parts of the business you are not comfortable doing, such as book-keeping or marketing.
- Flexibility in Your Work
Traditional jobs have a set 9:00 am to 5:00 pm, and one is expected to follow the time religiously. It also has a limited number of vacation days in a year. In self-employment, you have total control over your working hours.
Negative Side of Self-Employment
- Job Security
There is no guaranteed job security. It is up to you to always work or be without income.
- Fewer Benefits
You miss an opportunity of the free benefits that come with permanent employment. The missed benefits include life insurance, paid sabbatical leave, and retirement plans.
- Payment Of Taxes
Filling paperwork and payment of taxes on time is entirely your responsibility.
- No Employee Benefits
There is no sick pay, health insurance, sabbatical leave pay, life insurance and other employee compensations.
- Long Working Hours
Your working hours will be longer and irregular before you establish your business. Making you spend less time with your loved ones.
- Isolation From People
Working alone can be lonely, and there will be no people to interact with and share experiences within the work environment.
- Unpredictable Finances
Income in self-employment is very unpredictable, more so during the early days. You can go for a few months without any profits, yet you have to support the running costs.
Being your boss and wanting to be self-employed can be the big move to building your dream company and making your dream true.
A self-employed person works only for themselves while dealing with clients. They have no employers and do not wage consistently. In self-employment, you must update your taxes by yourself, and it is not withheld directly by the government. Self-employment creates room for flexibility with an enormous risk of employment.
Employed Versus Self-Employed
Employed people have a specific employer and expect consistent salary after a while, which could be weekly or monthly. The success or failure of the employer does not affect them directly. The employed also enjoy employment rights, benefits, and compensations.
Self-employed people work for themselves, whether it is freelancing or blue-collar jobs, and are solely responsible for the success or failure of the business. There is no consistent wage and also employment benefits like life insurance.
Types Of Self-Employment Are:
- Business Owners
- These are professionals not tied down to a specific employer.
- Salespeople
- Farmers and fishers
- Actors and Musicians
- Writers
- Make-up Artists
- Photographers
Kinds Of Self-Employment
- Sole Proprietors
They are the sole owners and operators of an incorporated business, primarily a single individual. Being a sole proprietor does not mean the owner runs the entire operation alone. He/she can hire employees to assist.
The sole proprietor gets all the profits gained in the business and covers any losses faced.
- Independent Contractors
These are individuals hired to perform a particular job for a client and are only paid for that job. They do not get employee benefits and compensations as they are not considered employees. Their taxes are not withheld by their clients from the payments of work attained.
Some examples of Independent contractors include blue-collar job workers, doctors, journalists, freelancers, and actors.
- Partnership
A Partnership is an organization between two or more people managing and operating a business together. The partners get to share the profits, and in case of losses, they also face them together. The difference from sole proprietorship is that there is two or more people in the operation and managing.
Benefits Of Being Self-Employed
- Power, Flexibility and Freedom from a daily routine
The people or companies you choose to work with are your customers and not employers. Customers can say what outcome they expect from the work, but they do not have the power to command how you work. Self-employed allows individuals to work for things they have a passion on and enjoy doing. Here you are the boss of yourself and can determine what to work on and how. It frequently allows you to work from home, saving time and money that would have been lost on commuting. However, you have to please your clients’ needs to get more referrals.
- Monetary Rewards
Self-employed businesses can be very profitable as companies prefer independent owners to run their business. Companies don’t need to engage in long-term commitments like a pension with permanent employers by choosing independent contractors,. Thus they will be more than willing to pay self-employed contractors more than is required.
- Creative Freedom
Decision-making depends on you and thus, allows you to find creative solutions which might arise. You can make abrupt changes that need urgent solving without going to a position higher to ask for permission. And have the satisfaction of seeing the outcome of your problem-solving skills.
- Independency
You have the independence to customize and set your working hours to fit other commitments you might have around you.
- Job Satisfaction
The satisfaction of reaping rewards of work done while doing what you love and enjoy.
- Location
What better place to work from, other than home? A place where you are 100% comfortable and you don’t have to worry about a mean colleague or office politics. You can enjoy a family vacation with your family while still running your business comfortably. Most self employments will give you the privilege of location flexibility.
- Control Over Your Business
You have control over all areas of your company. You can choose designing elements to make your brand unique and the clients you want to work with. It is also up to you to decide the location of the business and its working hours.
- Putting Your Skills To Work
Developing a business from zero needs you to determine the goal. People mostly decide to start a company within an area they are passionate about or are well skilled at. If employed, you will be limited on exploring the scopes, making your skills dormant. As the owner, you get to control what to do. You can also hire someone to help you run parts of the business you are not comfortable doing, such as book-keeping or marketing.
- Flexibility in Your Work
Traditional jobs have a set 9:00 am to 5:00 pm, and one is expected to follow the time religiously. It also has a limited number of vacation days in a year. In self-employment, you have total control over your working hours.
Negative Side of Self-Employment
- Job Security
There is no guaranteed job security. It is up to you to always work or be without income.
- Fewer Benefits
You miss an opportunity of the free benefits that come with permanent employment. The missed benefits include life insurance, paid sabbatical leave, and retirement plans.
- Payment Of Taxes
Filling paperwork and payment of taxes on time is entirely your responsibility.
- No Employee Benefits
There is no sick pay, health insurance, sabbatical leave pay, life insurance and other employee compensations.
- Long Working Hours
Your working hours will be longer and irregular before you establish your business. Making you spend less time with your loved ones.
- Isolation From People
Working alone can be lonely, and there will be no people to interact with and share experiences within the work environment.
- Unpredictable Finances
Income in self-employment is very unpredictable, more so during the early days. You can go for a few months without any profits, yet you have to support the running costs.
Being your boss and wanting to be self-employed can be the big move to building your dream company and making your dream true.
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