Self-Employment isn’t all Beer and Skittles

Great article by Bob Bly on the drawbacks of being self-employed, but why he loves it anyway.

Yesterday I was staring at the waste basket next to my desk, which was filled to overflowing, and it occurred to me that one of the things that irks me most about being self-employed is having to empty my own waste basket; when I worked for Westinghouse, a janitor I never saw did it for me every day after I had gone home from work.

My stuffed waste basket is a visual reminder that self-employment is not, as David Ogilvy said, all “beer and skittles.”

As it happens, I am a fan of self-employment. I encourage others to pursue it, and have spent considerable effort teaching them how to do so.

Despite that, I think you should be aware of some of the drawbacks of self-employment before you decide to take the plunge – or even if you’ve recently put out your shingle:

** First, without a real job, it’s more difficult to get a mortgage. The banking industry is prejudiced against the self-employed because we don’t have a steady source of predictable income.

** Second, without a regular paycheck, your cash flow is more uncertain. I have had months where I’ve made over $60,000. But I have also had months where I made only a few thousand dollars.

As a corollary to Murphy’s Law, you will find that the months the checks don’t come in are the months you end up needing money the most, such as last month, when my 2000 Nissan Maxima died and we spent $21,000 cash to replace it with a fully loaded 2010 Toyota Prius.

** Third, you don’t get benefits. You have to buy your own health insurance, which in the U.S. can be a huge expense, especially if you have had medical problems. On the flip side, many traditionally employed people now have to pay for part of their health benefits; when I took my first corporate job in 1979, Westinghouse paid the whole bill and the coverage was great. 

** Fourth, you have to pay for your own office space, furniture, equipment, supplies, and services. Talk to your accountant, as much of this may be tax deductible.

** Fifth, you will likely spend your days in solitude with no one around you to shoot the breeze or go out to lunch with. It was nice at Westinghouse that my department went out for drinks after work every Friday.

** Sixth, being sick is a problem for the self-employed. You do not get paid sick days. You can’t afford to be sick because your clients expect their work to get done. There are no coworkers to take up the slack while you are out recuperating. A long-term illness could ruin you. I think it is exceedingly difficult to be self-employed if you are not in good health.

** Seventh, in a 9-to-5 job, your boss gives you work to do. In most freelance professions, you have to go out and get work, convincing potential clients to hire you. This involves marketing and selling that many independent professionals abhor.

** Eighth, you don’t get a company car. So you have to buy your own cars, which is expensive.

** Ninth, you don’t get a pension … but to be fair, that’s also true for many 9-to-5 workers these days. Still, without a pension, the self-employed professional has to make saving for her own retirement a priority.

** Tenth, going on vacation is really hard, because your clients expect you to be available when they want you. For a number of years now, my wife has forced me to go away with the family for a week vacation. If she did not, I would never take more than a long weekend, which is what I still prefer.

If you find this dreary, forgive me. I tell you all this not to discourage you, but to make you aware that self-employment is not an instant cure for all your woes. It will not eliminate all problems in your life. You will merely be trading one set of problems for another. You should know that going into it.

On the plus side, despite the fact that self-employment has many drawbacks, for me these are greatly outweighed by its positive features – including working at home, no boss, no commute, freedom, and more money.

To find out more about Bob and his books visit bit.ly/bobblyauthor

Have a great day and happy writing.

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