Branching out on your own can be a scary and exciting journey. Becoming your own boss takes a lot of planning, dedication, and some risk-taking. Running your own business has many benefits but also comes with some drawbacks you should be aware of.
We’ve listed the main advantages and disadvantages of being your own boss to give you a good idea of what to expect. We’ll explore:
- Advantages like setting your own hours and being in complete control of your business
- Disadvantages like carrying all the burden and unpredictable earnings
- How Countingup helps make running your own business easier
What are the advantages of being your own boss?
Being self-employed is the perfect option for some people and comes with a number of benefits, including the ones we mention below:
Set your own hours
When you’re employed by someone else, they ultimately choose your working hours. However, working for yourself means you have the power and freedom to decide when you want to work (within reason).
Yes, starting up your own business can mean you have to dedicate long hours to get it off the ground. However, once you’re past the first hurdle and your business starts becoming more profitable, you have more freedom with your schedule.
Having this flexibility can be especially beneficial if you have children since you can work around activities like picking up the kids from school or other activities.
You’re in charge of decisions
Being your own boss means you’re not only in charge of setting your own hour, but you make all the decisions concerning your business. No more bosses or coworkers telling you what to do or how to do your job!
As a business owner, you choose how you want to set up and run your company. You choose where to source materials, what types of jobs to accept, how you treat customers and vendors, how you market yourself, and everything else.
Work from anywhere
Thanks to modern technology, you can do most jobs from anywhere as long as you have your laptop, smartphone, and internet connection. Obviously, some of this freedom depends on the type of job you do. For example, if you run a small bakery, you would need to spend time on the premises to sell your products to customers.
However, even if you run a shop, coffee shop, or restaurant, technology still allows you to complete financial management, marketing, business planning, and other tasks from virtually anywhere.
You reap all the profits
Have you ever been in a situation where you completed a task, and someone else took the credit? When you’re self-employed, the success of your business rests on your shoulders. Your achievements are yours and yours alone.
Additionally, once your business starts to make a profit, you have flexibility on how much to pay yourself. If you want to take a long vacation, you may earn less that month. Or, if you want to take out more dividends to pay for a trip, you can balance that next month.
Find out more about how to pay yourself tax-efficiently in our guide called, How much dividends can I pay myself tax-free?.
What are the disadvantages?
Like most things in life, being your own boss also comes with some drawbacks it’s good to be aware of:
You carry all the burden
While running a business means you can reap all the benefits yourself, it also means everything depends on you. Especially at the beginning, you need to dedicate a lot of time and effort to get things going, which can be stressful and isolating.
You’re also responsible for networking, sales, financial admin, marketing, bills, tax preparation, and anything else business-related. If the company doesn’t do well, you only have yourself to blame.
No promise of steady income
One potential drawback that might cause many employees to shy away from starting a company is the unsteady income. With a regular day job, if you get something wrong, your boss might give you a slap on the risk and tell you not to do it again. However, you’ll likely get a chance to do better next time (unless the mistake you made was catastrophic).
As your own boss, you’ll no longer have a set paycheck coming in at the end of every month. Entrepreneurs have to be willing to take risks and sacrifice that steady salary for the chance of succeeding on their own. You have to give your best every day to make sure your customers/clients are satisfied with your service.
You miss out on employee benefits
Missing out on employee benefits like paid holidays or sick leave can be a major financial issue if you want to start your own business. Even if you secure health benefits or insurance, it might not include as much as a company might. As a result, you may have to pay for medical expenses out of your own pocket.
Should something happen to you, like an injury or illness, you have no one there to pick up the slack. Similarly, if you want to take time off to go on holiday, the business will stop until you get back to work.
Ready to take the plunge?
Starting your own business has more benefits than drawbacks and is the perfect option for anyone who enjoys a challenge and loves being in charge. If you have a brilliant business idea you’re thinking about pursuing, why not take the chance? We hope that knowing the advantages and disadvantages of being your own boss has prepared you for what it might mean.
Keep on top of your business finances from day one
The Countingup business current account makes it easy to manage all your financial data in one simple app. The app comes with free built-in accounting software that automates the time-consuming aspects of bookkeeping and taxes. You’ll receive real-time insights into your cash flow, profit and loss reports, tax estimates, and the ability to create invoices in seconds.
You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward!
Find out more here.