The Pro's And Con's Of Being Self Employed

Do you imagine yourself sipping away that juice while you type away on your laptop in your garden on a sunny afternoon? You get the picture.

Life is on your terms when you are self employed and working for yourself as a private trader, broker, business partner, or owner, establishing a limited company, and hiring other employees depending on the type of work.

Do you think being self employed is for you? The answer isn’t in black or white. You will have to understand the implications of being self employed before you can decide! 

In this blog, we will discuss whether you are ready to miss a steady salary or whether it’s a non-negotiable for you. 

What Is Self Employment?

Let’s begin with what is self employment. It refers to working for oneself rather than working for a specific employer who pays them a salary. 

Self-employment means that money starts and ends with you. It is quite an attractive option when the boss becomes a little nosy at the office or you are feeling creative energy. 

Some consider self employment because they simply cannot mingle with the monotony of a formal workplace. 

However, the perks of self-employment may not look quite like perks if your freelancing projects face some hiccups, the market is down, or the demand is changing. 

So, which way to go? Stick to the course or explore your talents a bit? Let’s weigh out the pros and cons of self-employment. 

Pros of being self employed

If you are planning to work for yourself, the following pros of self-employment will certainly ring a bell with you:

The Balancing Act: Work And Life 

Whether you have a small tech start-up or you prefer to work as a freelancer, you are about to open the door to traveling and working in your own comfort zone.

While you travel for holidays and work on the go, you can even start a secondary tier of income as a vlogger. You won’t need approvals and traveling for work is no longer an unwanted thing! 

Work-life balance is one of the biggest perks of self-employment. Although work-from-home and hybrid working places are en vogue after the pandemic, self-employment will always have other attractive benefits! 

Embrace Creative Freedom

As a self employed individual, you will have complete freedom to design, pitch, and implement your ideas. 

Business owners are constantly innovating, taking and evaluating risks, and exploring new ways to work. With creative freedom, comes a learning curve as well. 

You will have to take courses or self-teach yourself the skills that you don’t have already. Also, don’t underestimate yourself - you may just be the new creative force we all need! 

Putting aside the freedom of learning, self-learning may take a toll on you, but if you have the capacity to catch up, you will certainly add a fantastic feature to your repertoire. 

Progression On Your Terms 

Self-employment provides better chances of progression in your work. You may learn and earn alongside which adds value to your earnings. 

As a self employed entrepreneur, you may experience a stronger earning potential as you will have better control over your own progression. 

Progression in their career is a major concern of individuals who are employed by companies. 

“When will I become the manager of the company? How many other people are in line for that position?” are just the tip of an iceberg of progression-obsession at companies. 

Self-employment is also not so rosy all around. If you lack the ability to self-navigate and progress yourself, self-employment may have been the wrong signpost. 

Motivation Aplenty! 

Self employed people are more motivated to do their work and meet their goals. That is because they have the freedom to do things as and when they please. 

The pleasure of achieving targets fills self-employed individuals with a sense of achievement and fulfillment to the extent that work becomes happiness.

"Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful." - Albert Schweitzer, German philosopher, physician, and musician.

Act. Take Charge. Be Your Boss. 

Henry Ford said it right: "You can’t build a reputation on what you are going to do." 

Ford revolutionized the automobile industry and paved the way for modern mass production, proving that decisive action with a vision can change the world.

As a self employed marketer or entrepreneur, you will have to be quite confident in your decisions and know when to act. You will not be afraid to make decisions quickly and move forward.

You will have shorter, more actionable, and more productive meetings with your clients. Over time, you will become very assertive and clear about what needs to be done and how. 

Cons of being self employed 

Coming through the challenges of self-employment isn’t as straightforward as it may seem. 

Self employed individuals also have a down phase where doubts and questions may kick in. 

Let’s take a look at the negatives to be aware of: 

Less Frills, More Thrills: Lack Of Employment Benefits

One of the best things about being employed by a company is the regular benefits such as: 

• Pension contributions
• Annual leave allowance
• Maternity or paternity leaves
• Medical cover
• Sports facilities  
• Retreats and more!

Benefits will vary from company to company but will share some common benefits. On the contrary, self-employed will still have to work on all holidays, whenever the work calls. 

That is why self-employed individuals may have difficulty separating their work and personal lives, as their business is often intertwined with their personal life. 

Financial Uncertainty Can Wrap Things Up

Income is simply not a steady affair when you are self-employed. If you are planning a start-up, it is very important to be realistic about the finances of the first 5 years. 

While the potential to earn good money is there, income is much less certain for start-up businesses. Also, you may want to choose the niche market carefully because the trends change rapidly.  

So, the question is to find out whether you will have stable a client base and how much risk tolerance you have to make it through. 

Financial instability is challenging when having to pay for rent and care for a family. Therefore, always work out a thorough plan with several backup plans to fall back on. 

Lack Of Success Can Be Real 

If you want to try something new but lack a holistic strategy, you may want to pause and ponder. Many young entrepreneurs gear up too soon for a catchy idea but soon want to exit.

Therefore, it is critical to have a solid experience of your niche market before you step into it unassisted. You may not make it too far without experience. 

The rate of self-employed businesses that fail in the first year varies depending on a number of factors, such as the industry, competition, and the experience and skills of the owner. 

However, it is estimated that a significant percentage of new businesses fail within their first year.

According to data, about 20% of small businesses fail within their first year, and about 50% fail within their first five years. 

All Responsibility Is Yours In Self-Employment

Self-employed individuals are responsible for all aspects of their business, including marketing, sales, accounting, and administration, which can be overwhelming. 

To perform all the responsibilities, you will have to upskill yourself and that may cost you time and money. As a result, your business may slow down. 

Don’t Let Isolation Sneak Up On You

Self-employed individuals may experience isolation, as they do not have regular contact with coworkers or a social support system in the workplace.

Some may argue against this because the normal at the workplace has significantly changed after the pandemic. We are more accepting of newer ways to work. 

We believe that feeling isolated is an individual’s personal perspective on work.  

Stressed Out: The Hidden Toll Of Self-Employment

Self-employed individuals are responsible for their own success and failure, which can lead to increased stress and pressure.

A study found that self-employed individuals reported higher levels of stress compared to those who were employed by others. 

In the study, 63% of self-employed individuals reported feeling stressed, compared to 56% of those who were employed by others. 

This higher level of stress was attributed to factors such as financial uncertainty, the lack of a support system, and the pressure to succeed.

How To Become Self-Employed?

The following tips will help you figure out your way around how to become self-employed. 

• Identify a business idea: Consider your skills, interests, and experience to identify a business idea that you are passionate about and have the skills to pursue.
• Conduct market research: Research your target market to determine the feasibility of your business idea and identify potential competitors.
• Develop a business plan: Create a comprehensive business plan that outlines your business strategy, financial projections, and marketing plan.
• Fund your business: Determine how you will fund your business or start with zero investment. 
• Set up a physical or virtual workspace: Set up a physical or virtual workspace where you can run your business operations.
• Start marketing: Begin marketing your business to attract customers and establish a client base through social commerce. 
• Seek support: You are not alone! Seek support from professionals and social networks to help you navigate the challenges of self-employment.

Discover Your Path: Is Self-Employment Right For You?

The answer really depends on your preferences! If you prefer flexibility over benefits and independence over micro-management, you are in! 

In a survey of self-employed individuals in the United States, the majority reported that they chose self-employment for the flexibility it offers (79%) and the ability to be their own boss (69%). 

It is noticeable that self-employment trends vary across regions with Australia, UK, and USA with the leading numbers of self-employed workers. 

According to the World Bank report, the informal sector in Pakistan, which includes self-employment, is estimated to make up a significant portion of the country's economy, employing around 60% of the total workforce. 

In recent years, there has been a trend towards increased self-employment in Pakistan, as more individuals opt for flexible and entrepreneurial opportunities. 

FAQs

What is social commerce in self-employment?

Social commerce in self-employment refers to the use of social media platforms to sell goods or services directly to customers.

How can I start a social commerce business?

To start a social commerce business, you will need to identify your target market, choose a product or service to offer, create a social media presence, and develop a marketing strategy to reach potential customers.

Is self-employment a popular option in Pakistan?

Self-employment is a growing trend in Pakistan, with many individuals seeking the freedom and flexibility that comes with being their own boss.

What are the common types of digital self-employment in Pakistan?

Common types of digital self-employment in Pakistan include small businesses such as reselling, freelancing, and consulting services.