Being self-employed is a dream come true for most of us. You finally have no boss to answer to; you can make your own decisions; have a flexible work schedule, and are most likely doing something you love, hence you feel fulfilled in life. However, being self-employed is not as easy as it sounds. You encounter a lot of challenges when working as a self-employed individual which can make it hard and overwhelming.
If you are thinking about quitting your regular job or changing careers to start your own business, it is best if you get into it knowing the challenges to expect when you become self-employed. But don’t worry, we have got you covered. In this post, we discuss the reasons why being self-employed is so hard and tips to make it easier.
Let’s dive in.
Why Being Self-Employed Is so Hard and Tips to Make It Easier
- You are your own boss, but not really
As a self-employed individual, you may have no boss hovering over your shoulder demanding that tasks be done, but now there are more people you have obligations to. When providing a product or service, anyone who writes you the check becomes your boss for that moment. This is one of the major challenges of being self-employed. The clients are in charge, and they expect you to get the work done by their set deadlines. Since you are working with different clients, it can be overwhelming to service all their needs.
Try these tips to make being self-employed easier and regain control over your schedule.
- Develop your organizational skills
- Learn to prioritize
- Learn how to say no to projects you don’t want
- Automate where you can
- Hire more people and delegate tasks
- Don’t take on too many projects at a time.
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- Unstable income
As a regular employee, you can always expect a paycheck every end of the month and already know how much to expect. This is not the case now that you are working for yourself and this factor is why being self-employed is so hard.
When starting out, you might earn so little that you might start questioning whether you made the right decision to become self-employed. However, you only need to be patient and not give up. It can take time for your new business to be successful, hence your income might not be regular at first, but will improve with time.
Some ways to grow your business and make a more steady income when self-employed, include;
- Requesting for referrals from clients you have served to increase your client base.
- Offering discounts and incentives
- Keeping in touch with your old customers
- Continuing to learning new skills and gain experience in your chosen field.
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- Being self-employed is lonely
The solitude you experience as you work by yourself is another reason why being self-employed is so hard. The freedom of being your own boss and not having to socialize with anyone other than your dog may be great at first. However, doing this all day every day can lead to loneliness which can lead to depression.
According to a survey by Aldermore, even though a majority(93%) of the self-employed people in the UK enjoy being their own boss, 39% of them have suffered from loneliness. You have no one to share ideas with and in most cases, there is no one to give you feedback on whether what you are doing is good.
You can reduce loneliness associated with self-employment by;
- Working away from home several days a week. for instance, at a coffee shop or a park.
- Rent a co-working space.
- Meet up with friends after work if your schedules allow.
- Join groups with other self-employed people on social media
- Take a break to go for a walk once a day.
- If you can, hire a team to work with
- Join a gym or book club where you will have an opportunity to meet new friends.
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- No benefits
Another challenge that makes being self-employed hard is that you do not have easy access to health benefits and pension plans.
To enjoy these benefits as a self-employed person, you can;
- Get your own insurance. Although the cost of health insurance for self-employed individuals and freelancers is a bit higher and this is another expense that will drain your earnings and savings, it is better to have insurance than not to have it.
- If your spouse is employed, request to be included in their employer-sponsored insurance plan.
- You spend your own money
At your previous job, you were reimbursed for any expenses incurred in the line of duty. Now that you are self-employed and your own boss, all the expenses you incur are yours. This can make being self-employed challenging, especially if you don’t have much capital or if you aren’t making enough profit to cover the cost of running your business.
You can make work easier and manage your finances when self-employed by;
- Separating your business and personal finances
- Creating a budget for your expected expenses as a self-employed individual
- Get an expense tracker app
- Save for your retirement
- Pay yourself first
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- Higher taxes
Your previous company would usually pay for half of the social security and Medicare taxes. From now on, you will have to pay self-employment tax all by yourself which explains why being self-employed is so hard.
However, you can still keep up with your tax payments by using these tips to remit your taxes as a self-employed individual;
- Keep track of your income and expenses to estimate taxes required.
- Pay the taxes more often than quarterly, for instance, monthly. It will help reduce the burden of paying a lot of money at once.
- Segregate a percentage of your income to pay for taxes.
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Although it may seem as if being self-employed is too hard, the benefits of self-employment far outweigh the challenges involved. You will be required to work a lot harder, but all your efforts will be worth it. With discipline and the motivation to achieve your goals, you will be a successful entrepreneur.