As you might assume, there’s a big difference between being self-employed and being an employee for a company. Very quickly you’ll notice that being self-employed has its own array of pros and cons. On the plus side there’s a large amount of freedom to make your schedule, but there’s also greater accountability and responsibility for the schedule you create. Depending on the nature of your business, you may find yourself with more workload or pressure than ever before. And if that excites you, or you’re up for the challenge, then it can be very rewarding. In this article we will cover the basics of what it takes to be your own boss.
- Make your home conducive for work
Many self-employed business owners work from home, or at least have a home office set up for times when the workload spills over after the typical clock out time (you may find yourself on call 24/7 to handle any arising crisis). A smart thing to do early on is to get organized. That doesn’t necessarily mean arranging a spotless, obsessively categorized office space. Simply do what works for your style/ brain frequency (you did this for yourself in the first place, so set your own terms). Whether you’re right brained or left brained, just set up your workspace in a way that makes sense to your methods.
If you have a family, you’ll need to make sure everyone understands and respects your working hours. For example, just because you happen to be in your home doesn’t mean you’re free to do a load of laundry real quick, or can play catch in the yard. Let everyone know that you’re not neglecting them because you won’t step out of your office for a minute. It may sound silly, but it is an issue that many self-employed people face. And if you’re not careful, getting constantly distracted by things at home can quickly become a serious pitfall in your productivity.
- Understand the possibility of income uncertainty
The income situation for being your own boss is sort of high risk, high reward. Those who are simply employed by a company typically can depend of a fixed income for the work they do. But as a self-employed business owner, you may be paid only when you are making a profit. There may be a degree of uncertainty at first while you are still finding your feet. Perhaps you have a great idea that you’re sure will skyrocket to success right away, but it is still wise to plan for the possibility of income uncertainty, especially if you have a family depending on your income from your small business.
- Prepare with suitable health insurance When it comes to acquiring the health insurance you need, you’re a little less equipped to negotiate when self-employed. There is no longer a higher-up employer to cover the cost, nor do you have a team of associates to stand beside and negotiate a better health plan. And while our country is still hashing it out over implementing free health care, you may still have to decide how best to get coverage while self-employed. If you have left a company to start your own business, you may still be able to get coverage from your former employer for a time (18-36 months) under COBRA Law. However, there are many stipulations and restrictions, and it is not something to stake your life on. Do your research and see how you can qualify while you’re rethinking your health insurance in the long term. Also, if you’re spouse is in the workforce under a health plan, you may consider coverage under his or her plan.
- Save what you can for retirement
Part of why it is so important to have your health care sorted out is to make sure you don’t suddenly find the need to spend a fortune on an unexpected health crisis that is not covered by a health plan, and eats into your retirement fund. It may be tempting to think of retirement as a long ways away and something to worry about in the future, but making a steady decision to save money will cause you to thank yourself later. Having the discipline and foresight to plan for the future is certainly part of what it takes to be your own boss.