Should I work for myself?

Your considering becoming your own boss; starting a business of your own and pursuing an idea that you may have been considering for years.  Naturally, there are risks but there are potentially great rewards and not just from a financial point of view.  

Some of the advantages to being self-employed are:  

• you are your own boss, with more control over what you do and when
• you can set your own hours, giving you more control over how you plan you day
• you can choose where you work, either from home or in rented office space
• you can earn as little or as much you like.

Potential disadvantages include:

• you may find you suffer from more stress, you are responsible for any losses the business may incur
• you are responsible for your own tax and will have to make your own pension arrangements
• you may find you are working long hours, giving you less time for family and friends
• you may find you feel isolated and miss contact with colleagues
• you will not receive any holiday or sick pay.

Advantages and disadvantages aside, starting your own business gives you the opportunity to create something that is uniquely yours; something that can provide employment for other people and that can build a legacy for others to inherit.

Only you can ultimately make the decision.  We’ve come up with some of the typical characteristics of an employed and self-employed person in the table below:

There’s no easy answer to this particular question.  It really depends on whether you feel you can balance both sets of responsibilities.  You’ll need to consider how much time you can devote to your new venture and whether that time will be sufficient without putting your existing work at risk.

Perhaps the most challenging point is to know when to leave your existing job and fully take the plunge into running your own business. Whilst you are in the early stages of planning your business a good option may be to continue on your existing employment – this will allow you to put some money aside to act as a cushion for any bills or expenses that will come up. Ideally you want to be in a situation where you have money to support yourself and your business until it becomes sustainable. Ultimately though, only you know what income level you will need to live on and whether your new business will provide that for you. 

If you do continue in your existing employment we’d suggest that you check your existing contract of employment as some employers require you to declare outside interests and others may insert clauses preventing you from undertaking the same kind of work within a given area or timeframe. This is particularly common if you’ve been made redundant.

As well as considering whether self-employment is right for you from a personal point of view, there are other areas that you’ll need to consider:

• You’ll need to finance your start-up idea and may have to borrow from banks or other sources. When considering this, use a free business bank account to monitor costs and reduce any loans you may need.
• New ventures can swallow up an awful lot of time so you’ll need to be clear about how much time you can devote and consider what impact this may have for you on a personal level
• You’ll need to reflect on whether you have the required skills to run the venture, or whether you’d be happy to devote time to additional training.

Whilst many self-employed people choose to work alone it may be worth considering whether you will be able to run the venture single handed. Working alongside a business partner may give you access to a skill set that you need or to extra finance. Taking on staff at a later stage could allow you to focus on growing your idea.