More and more people are turning to self-employment rather than slogging it for somebody else, and it’s easy to see why. You have complete freedom over your working hours and the ability to pick and choose what days you work.
It can be incredibly exciting and aid a flexible lifestyle and can enable you to have more control over your personal life. For example, if you’ve been working so hard that you haven’t had a chance to see your family in a long time, being self-employed gives you the freedom to say ‘no’ and take that time back for yourself. However, like any job, there are elements that can cause difficulty too. Stress and anxiety can common if you are prone to quiet periods in your profession, and sometimes it can be tough to pick up clients and customers yourself, whereas it may have been somebody else’s role back in your old workplace.
That said, there are always positives and negatives when it comes to making a decision as big as turning self-employed. Let’s take a look at nine major points you’ll have to consider before you take that leap.
How Your Partner Feels About the Decision
The decision to become self-employed should not be taken alone, although it will be hard to see it any other way when you first start thinking about it. If you’re young free and single, the decision can be a 100% selfish one, but if you’re in a relationship, the decision has to be a joint one.
To avoid any resentment, confusion or argument, both sides should feel able to lay their cards on the table and discuss the pros and cons for turning self-employed and staying in a job with stability. Once you have had a discussion, you can move forward knowing all of the facts, and begin self-employment without feeling like you’re not supported in the decision.
Your Savings
A solid plan for self-employed people is to have a fair amount of savings to hand before you quit your job and start over in the freelance world. It may take you a few days to get into the flow of things, but it could also take a few months, which means – in all likelihood – that your savings are going to take a hit. If you have your own money saved this isn’t a huge problem, but if your savings are a joint savings account or your families nest egg, there needs to be a discussion before you delve into the pot.
Getting a Mortgage
If you already own a home, the decision to become self-employed won’t make a difference, as long as you can continue to make your mortgage payments each month. For self-employed people who are about to buy a house, it becomes a little tricky.
Banks and estate agents aren’t massively keen on giving mortgages to self-employed people without at least three years of financial statements to put their minds at ease, as they don’t want to be repossessing your home six months to a year down the line because you can’t keep up with payments.
Of course, if you have a wife, husband or partner that is making good money, and/or you have a large amount of cash in a savings account, this makes it a great deal easier for you. But if you have none of these things and you still want to get on the housing ladder, you should maybe reconsider turning self-employed until you have some financial backing, or wait until you’ve been freelancing for a while before seeking a mortgage.
Are You Comfortable in Your Own Company?
This might appear to be a strange question, but it’s one that all self-employed people should consider before becoming self-employed. Being comfortable being alone, with nobody else around to discuss your work, what you had for lunch yesterday and the finale of your favorite Netflix series is something that many people don’t consider before taking the decision to become self-employed, and it’s the main reason they head back to work.
If you’re a social creature who likes having a chat at the water cooler and cracks a joke or two with colleagues in the office, you may want to consider how are you going to compensate for that when you suddenly find yourself at home, at your desk, alone. It’s not quite as depressing as that sounds, but it’s a big change.
Do You Enjoy Being Front-and-Centre?
Another awkward question on the surface, but another important one to ask yourself before you leave your current role. If you’re the kind of person who likes to be handed a task and a deadline and then it’s head down until you hit the finishing line, you’re going to have to discover an ability to put yourself out there if you are going to network and find the clients who will be paying your wages collectively for the rest of your working life. Fortunately, there are hundreds of courses, speaking events and seminars out there designed to help people who aren’t naturally comfortable putting themselves out there to find the confidence to network, win over potential clients and make their self-employment a long-term success. You have to be willing to invest in yourself if you want to be successful in the freelance game.
Dry Spells
If there is one advantage of working for somebody else rather than being self-employed, it’s that you are getting paid regardless of how quiet the business is. With self-employment, a dry spell means you aren’t getting a regular income, which can impact your mental and physical health and your savings, and make you desperate. That’s when bad choices are made, including working for more hours and less money. However, there are plenty of ways to keep busy during a quiet period. Quiet periods are a godsend when you’ve got a steady line of clients, and you can pick and choose when you work due to having built up a nice amount of savings, but if you’re the kind of person who doesn’t like not being busy, self-employment may not be for you. It’s an important factor to consider when choosing whether or not to jump in.
Family Planning
Many families choose to start a family when they are in a comfortable position in their careers and earning good money. It is worth considering whether or not you will be starting a family anytime soon before you become self-employed, as it may have an effect on the savings you have if it takes a while to build your finances up to a stable position where you have money coming in as regularly as you did when you were working within a company.
There is no reason to put off starting a family just because you have decided to become self-employed, however. It may just be the motivation you need to work harder to provide for your family. There are plenty of investment and financial planning services out there, and should there be any complications along the way, FamilyVest special needs planning can cater for families who have children who have learning difficulties, and help them plan for a better future. Whatever the situation, self-employment and starting a family doesn’t have to be a problem, but it has to be given the consideration it deserves.
Your Lifestyle Change
The majority of people build their personal lives around their 40-hour working week, including going to the gym, taking an evening class, seeing family and friends and indulging any other hobbies and interests they may have. If you love structure, being self-employed might not be for you. Gone is the structure and the predictability of the working day, replaced with a working week that is dictated by what work is coming in at any given moment.
For some people, this is exactly what they want from self-employment: the ability to break free from the predictable routine that they’ve been stuck in for years, and being handed back the ability to make a choice as to when they see and do the things they love. Again, it all depends on the individual, but a decision that shouldn’t be taken lightly.
Do You Have a Five-Year Plan?
In our working lives, it’s good to have short and long-term goals to aim towards. In regular employment, chances are your manager will have personal development plans in place for you, with a review scheduled in every six to twelve months to make sure you’re on the right path and heading towards the goals you have set yourself, with their guidance.
In the self-employment world, you are your boss, your HR department, your social media manager and everything else. It’s one of the great pleasures of working for yourself, but you still need to have goals to work towards, you are could end up drifting endlessly from one day to the next. Having plans in place is an essential part of being successful past the first year in self-employment, and it is definitely worth writing down your goals – and how you are going to achieve them – before you leave your current position and become self-employed.