Should you leave full-time employment behind and start your own business? There are pros and cons to both options, and, in this article, we’re taking a look at what they are – and whether you’re ready to dive into self-employment.
As contractor accountants, we can help you in your sole trader, locum or limited company journey. So, let us handle your accounts and maximise your profit, no matter the type of venture you’re running – or if you’re still thinking about setting up your own business.
Should You Stay Employed?
While there are many benefits to becoming self-employed, there are also many reasons why you should remain in full-time employment. Take a look and see if any of these reflect your current situation:
You’re Not Sure if Self-Employment is Right for You
A good way to try your hand at self-employment when you’re still not entirely sure if it is for you is to set up a side gig while keeping your day job too. A sole trader structure is likely the better option since it doesn’t come with as much admin or legal responsibilities as limited companies do, and you can also close the business for good a lot easier when you’re a sole trader.
You can also incorporate later, which can bring a host of benefits, such as increased tax efficiency – AKA, more take-home pay for you.
You Worry About Job Security
While being a sole trader or limited company owner can be incredibly rewarding when it comes to higher wages, it’s also true that it’s impossible to be certain about job security. Freelancers and contractors have to find new gigs all the time, while small business owners must handle suppliers and partners, for example.
This means that nothing is certain when it comes to being your own boss – however, full-time employment comes with uncertainty as well, as we’ve seen even before the pandemic. Jobs aren’t secure, and we believe that building your dream career should take priority.
For many, this means setting up a business. There are also several ways to mitigate this job insecurity. For example, if you’re self-employed, you can work with several clients at once, which will help you to maintain your cash flow even if you lose one client.
You Wonder if You Can Stay Motivated
When you’re a freelancer or contractor, you must stay disciplined and motivated at all times since you’re the only one responsible for your schedule and for finishing your tasks. However, transitioning to self-employment can be hard, especially because you no longer have a manager to report to, a timesheet to fill, a certain number of hours to work in a day, and more.
When you become your own boss, it’s important to be realistic about which hours you can work and the amount of time you can take off, as well as organise work in a way to complete all your projects’ tasks in a timely manner.
If you struggle to self-motivate, try to have a schedule in place with a set number of work hours and breaks to get used to a routine. Motivation is important for freelancers and contractors, as you have to be the one getting your name out there, talking to potential suppliers, networking with peers, etc.
You May Not Achieve Your Dreams
Staying employed may not be what you truly want to do in your professional life so, if that’s the case, it might be time for you to try something different! Self-employment can help you achieve your career goals, allowing you to follow your passion and feel more satisfied.
Building something from the ground up can also boost your satisfaction levels, especially because it’s something you can be proud of and even invest in as a legacy for your future.
You Might Never Earn as Much as You Want
A big one for everyone looking to break through the ‘ceiling’ of employment wages – while there’s a limit to how much you can make when you’re working for someone else (and, if you’d like to earn more, you typically need to apply for a new role or company), there are technically no restrictions to how much you can make when you’re self-employed.
Of course, your rates will depend on several factors, including the industry rates, your experience, the type of business you’re running, and so on, but you can set your own wages and charge clients as much you’d like.
This means making enough to cover living expenses and having enough profits to live comfortably, travel the world, invest in an expensive hobby, etc. Of course, you can always negotiate better rates as you go along as well, including as you gain more experience and skills.
Why You Should Become Your Own Boss
We’ve said it many times before, but we’ll say again: running your own business will provide you with many benefits, so why not look at what to expect?
Maybe these can help you to make a decision – if not, don’t worry, we’re here to answer any questions you may have about becoming self-employed, so get in touch today to speak to a member of the Gorilla team.
You Can Learn New Skills
While you should only become self-employed when you feel confident that you have a set of skills and expertise to offer, you don’t have to be the absolute expert at everything when you first start. Running a business allows you to keep working on your skillset and develop new skills you may never have worked on before.
If you value personal and professional development, this might be the best option for you!
You’re Not Keen on a 9 to 5
While there’s nothing wrong with having a set schedule every day, such as the typical office 9 to 5, it’s also important to remember that these types of hours are not for everyone. For example, if you’re someone who thrives early in the morning or can only work well by taking several breaks during the day, then a more ‘unconventional’ option is right for you.
Of course, many self-employed individuals prefer to keep the same schedule as they did when they were employed, as this can help them to stay disciplined – however, once you’re a freelancer or contractor, you can make your own hours and work the way that suits you best.
This can lead to increased productivity as well!
You Want to Make the Rules
Tired of answering to someone else? When you become self-employed, you don’t have anyone to manage (or micromanage) you or to decide how you must spend your workday. For some, this can be a downside because it makes it harder to stay disciplined – however, for many others, this allows them the freedom to thrive since they prefer to make their own rules.
As a freelancer or contractor, you still need to answer to your clients, although in a different way than if you were being supervised by an employer. You’re still free to create your own schedules and set your own deadlines, which you may not be able to do if you’re employed.
You Can Have Job Security
This may seem contradictory to what we already said above, but the truth is that a successful business can help you to have a regular income. Of course, if you’re just starting out, you may not feel this way but, the more you invest in your business and take the time to nurture and grow it, the closer you are to having something that will give you job certainty.
Working on multiple projects at once can help with this, as you don’t have to fear major loss of income if a client chooses to go with someone else. Having several customers at once will also leave you feeling more confident to review your rates and even raise them. So while you may lose a couple of clients, you won’t lose the majority of your income and will soon supplement it with high wages.
Owning a business also means not having to climb the corporate ladder – having to chase promotions or constantly apply for better roles can be stressful for many people, while setting up a business means you’re making all the decisions and don’t have to depend on anyone else.
What About Both?
As mentioned, if you’re unsure whether you should quit your full-time job to start a business, why not opt for both, at least for a while?
There are some pros and cons to having a full-time job while you build a business on the side, so it’s up to you to decide whether it’s worth it. For example, you may find that you don’t have as much time to focus on your new venture when you also have to work for your employer, which means you may have to work on the weekends and after hours instead of spending time with family and friends.
Not everyone will be happy with such an arrangement, although this may only be temporary – many self-employed individuals start like this but, eventually, quit their jobs and focus on their business full time.
After all, you have more time to dedicate to your business if you leave full-time employment. You’ll be free to research the industry and your competitors, put a marketing plan in place, start contacting potential clients, begin networking, and more.
Another benefit of doing both is that you don’t have to feel the pressure of being successful right off the bat. It can take a while for a business to grow, so when you already have the buffer of a job, having a side gig won’t be as stressful as it could be if it were your only source of income.
If you’re looking to build a creative business, then having a side gig can help you have this outlet without outright quitting your job, especially if you’re not sure whether your business will take off soon.
Because we’re small business accountants and also work with start-ups, we understand that taking the leap can be daunting so, if you opt to have both at the same time, you only have to choose one or the other when you feel ready.
Where Does Gorilla Accounting Come In?
As early as you’d like! We can help with everything from helping you to decide which business structure is right for you (for example, limited vs umbrella) to setting up a limited company and preparing all your tax returns. We also provide ongoing expert advice designed to maximise your profits.
Our Gorilla team also know everything there is to know about your industry. We work with many different sectors and keep on top of the latest rules and legislation, whether you’re a landlord looking to expand your portfolio or an IT expert wanting to set up your own consultancy business.
What’s more, as sole trader accountants and limited company accountants, we’re on hand to answer all your pressing queries, including on the same day if you contact us by 3pm. We also offer 24/7 access to FreeAgent accounting software, which helps you stay on top of all your accounts no matter where you are in the world.
Talk to us via our website chat function or call us on 0330 107 9673 to learn more.
