Six of One, Half a Dozen of the Other
You've read many articles I'm sure about the advantages and
disadvantages of working for yourself from your own home. Many
of them I've written myself, in fact. But how many articles have
you read that give equal time to the advantages of working for
someone else compared to working for yourself?
This article seeks to redress the imbalance by comparing and
contrasting the respective pros and cons of running your own
home-based business and working for someone else.
COMMUTING
When you work for yourself from home, your commute is, at most,
a few steps from one end of the house to the other. When you
work in a traditional paid "job" your commute may be a five
minute drive or it may be an hour and a half or worse. Both
ways. That can add up to a substantial chunk of time over the
course of a week, a month or a year.
CHILDREN
If you work from home, you can be around for your kids. If you
work outside the home, you may be spending a fortune on
childcare if your kids are too young for school and worrying
about what they're up to between the end of the school day and
when you get home if they're not.
On the other hand, having kids around while trying to run a
professional business from home can be a major distraction and
constant source of interruption. You may find you need to use
childminding services occasionally to take care of business
undisturbed.
INDEPENDENCE AND AUTONOMY
When you work for yourself, you call the shots, you make the
decisions and you do it without anyone looking over your
shoulder and breathing down your neck. When you work outside the
home, you are subject to the decisions (good and bad), whims and
control of your boss. Your boss dictates your regimen.
On the other hand, along with decision-making autonomy comes an
awful burden. If you get it wrong, you may not make any money
this week.
WORKING HOURS
When you work for yourself, you can set your own hours - both
the actual hours you work and the number. When you work for a
boss, you work when and for how long you're told (within limits,
obviously).
Although setting your own hours may sound like freedom to you,
all too often working your own hours translates into working all
hours so you need to be able to set limits for yourself.
Also, when your boss dictates your hours, that may or may not
fit in with your body clock. One of the real advantages of
working for yourself is that you can choose to work during your
peak concentration time and not at all during your sluggish
times of the day. If your peak time is 5:00 am through to 10:00
am, you can work those hours and another couple sometime in the
afternoon catching up on brainless type tasks. If you work for
someone else, you work when you're told and if that doesn't work
with your body clock, too bad.
STATUS
If you're a professional in the paid workforce, you may enjoy a
certain status and prestige, if that's important to you. On the
other hand, working for yourself you may find it difficult to be
taken seriously at all. Again, whether that's a relevant factor
depends on how important things like "status", "image" etc. are
to you. If they are important, take this seriously. Although it
may sound shallow, if it's going to be a thorn in your side,
give it some serious thought.
BOUNDARIES
When you work for someone else, you have a ready-made structure.
There is a time for work, and there is a time to go home. When
you work for yourself, these boundaries can become blurred over
time, so much so that you may find you have difficulty turning
work off since you are, after all, living in your work
environment and vice versa.
PERSONAL DISCIPLINE
If you're a personally disciplined person, working from home
will probably suit you very well. But if you find it difficult
to motivate yourself to do what has to be done and you find
yourself procrastinating over starting a particular work-
related task, you may find the distractions of being at home
particularly difficult to resist. If you find yourself doing
laundry and gardening when you should be working, this may be a
problem for you.
CASH FLOW
This is one of the biggies. THE big advantage of working for
someone else is that you have a regular paycheck coming in.
Leaving aside any worry of downsizing, assuming you do your job
competently, you can reasonably expect to receive a certain,
known amount of money at regular intervals. When you work for
yourself, however, the amount of money you make and when you
receive it can be, at best, spasmodic.
On the other hand, the money you make from working from someone
else is limited to your salary. When you work for yourself, the
sky's the limit provided you are successful at what you do.
EXPENSES
When you work for someone else, your boss is responsible for
capital expenditure and day to day expenses and you don't have
to worry about it or even think about it, for that matter. When
you work for yourself, however, you're responsible for buying
your capital equipment (computer, photocopier, fax machine) and
paying for repairs as needed. You're responsible for paying your
own electricity and phone bills, printing costs and advertising
expenses ... you name it, it falls on you.
BENEFITS
Similarly, when you work for someone else you get to participate
in your employer's pension plan, you get paid health insurance
and vacations as well as numerous other benefits. When you work
for yourself, to get any of these things you have to pay for
them out of your own pocket.
RISK MANAGEMENT
Your employer pays for various insurances to protect the
business unit from risk. The types of insurance taken out will
depend on the nature of the business but will include, at a
minimum, products liability, business interruption and the like.
Again, as a home business owner, you must foot the bill for this
expenditure.
LICENSES
Your employer is responsible for ensuring that the business
obtains and maintains all necessary business licenses. If you're
the boss, this is your responsibility.
VACATIONS
When you're an employee, you get paid vacations. When you're
self-employed you don't. And even if you decide to take a couple
of weeks off, who's going to run the business in your absence?
Can you really just walk away for two weeks? In reality, when
you work for yourself, true vacations are a thing of the past.
TAX
As an employee, the most you have worry about is paying your
state and federal income tax and claiming whatever credits
you're entitled to. When you're an employer you have to think
about all of that as well as self-employment tax and a myriad of
other business-related tax issues. An accountant becomes an
absolute necessity. Also, as a self- employed person, no-one's
withholding tax from your checks. Make sure you put enough aside
to pay the tax bill!
SECURITY
Security is relative. For some, security comes only from working
for someone else. For others, this is merely an illusory form of
"security" since none of us really knows what's around the
corner. We could be next to be laid off. For some, real security
can only come from being in control of their own destiny and
that means working for oneself.
SKILL SET
As a self-employed person you need a broad skill set. Not only
must you be able to perform the main skills inherent in the
business you have chosen for yourself, you must also be able to
handle the myriad other jobs around the office that your
secretary would otherwise do for you if you were in the paid
workforce. This forces you to be something of a generalist which
in turn dissipates your focus from the central core of your
business. When you work for someone else, you are generally more
able to specialize in a particular area and, over time, develop
something of an expert status, increasing your marketability in
the workforce.
WARDROBE
In the corporate work-world, you have a certain professional
image to uphold. When you work for yourself, at least on days
when you don't have to meet with clients, you can wear what you
want, even your rattiest sweats, if that's what you feel most
comfortable in.
HARD WORK
Some people think that leaving the paid workforce to work for
themselves from home means they will work less hard and fewer
hours. The reality is usually the opposite. In the early days of
a home business you will probably find you need to work harder
and longer, only to make less money than you did in your paid
job. This will get easier over time but in the early days,
expect to have your nose to the grindstone.
RETIREMENT PLAN
Who's going to provide for your retirement when you work for
yourself? You've got it, you! No more employer-funded pension
plans for you.
GETTING PAID
When you work for someone else you get paid like clockwork, even
if your employer hasn't yet been paid what he or she is owed
from clients. When you work for yourself, whether your client
pays often determines whether YOU get paid. So you need to be
diligent in following up slow payers and take appropriate action
in response to non-payers.
OFFICE POLITICS
When you work for yourself you can kiss goodbye the endless
office politics that used to drive you crazy. On the other hand,
you're also out of the loop.
ISOLATION AND LONELINESS
Along with being out of the loop comes the isolation monster.
Although the early days of your home business may be an absolute
luxury compared to the rigors of your corporate work- life, over
time you may find you start missing the office politics and
lunches with colleagues.
OUT OF THE LOOP
Once you leave the corporate life for home-business
entrepreneurship you may find it hard to get back in, if that's
what you decide to do. Many employers will label you as "not
corporate enough" if you've been out of the workforce for any
length of time. They may also, however unfairly, figure that you
couldn't make it in the corporate world which is why you left to
start your own home business and now that's failed too.
These are just a few of the issues you need to think about when
deciding whether working for yourself or working for someone
else is right for you. It's crucial to be brutally honest with
yourself about your particular strengths and weaknesses, as well
as your emotional and mental make-up. A good way to dip your toe
in is to consider moonlighting - starting a home business on the
side while you continue to work your full-time job.
Sure, this will mean some both-ends candle burning but better
that than making the break and then finding out you made a
mistake. Another alternative that may work well for some is to
telecommute. Work for someone else out of the comfort of your
own home. These types of positions are pretty rare and usually
can only be negotiated by long-term employees in positions that
lend themselves to individual, as opposed to team, projects. But
don't let that discourage you. If you have particular expertise
in a field that lends itself well to telecommuting and your boss
won't go for it, start looking around for companies that will
hire you on this basis.
FURTHER READING
This article touches on some of the major areas that you need to
think about when deciding whether the self- employed or employed
option is best for you. For a more detailed treatment of these
and other issues, check out the following articles at
http://www.ahbbo.com/articles.html : => And Never the Twain
Should Meet => Checklist for the New Home-Based Business =>
Entrepreneurship: Do You Have What It Takes? => Flipping the
Switch: How to Turn Off Your Business and and Turn On Your Life
=> Focus Your Light => Getting Paid ... Minimizing Bad Debts in
Your Home Business => How the 9 to 5 Grind Could Be Costing You
More Than You Earn => Look Before You Leap ... Is a Home-Based
Business REALLY For You? => Moonlighting's Greatest Challenge
... How to Beat the Time Crunch => One Foot in Each Camp =>
Overcoming Isolation in Your Home Business => Overcoming
Procrastination in Your Home Business => Putting Theory Into
Practice ... A Personal Perspective => So You Want to Be a
Freelancer => The 9 to 5 Home-Business Tug O'War => The
Telecommuting Alternative.