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Photo by Ashley Sixto Artidiello

When you have worked as a regular employee for most of your life, self-employment might feel like the ultimate breakthrough. You are your own boss, your working hours are flexible, and you are in control. You also have no co-workers drama to deal with every day. However, transitioning from a regular employment routine to being the boss is not as easy as many people usually expect. Read on to know what to expect because at times working self-employed is much harder than you think.

01 | YOU ARE JUST ‘SORT OF’ YOUR OWN BOSS
  You didn't expect this to make it to this list. On the face of it, it is easy to think you are your own boss and beholden to yourself only. The reality check is that other higher powers act as your real employer. For instance, your clients and deadlines. While employed you answered to one boss, when you are self-employed, you answer to several employers which can be stressful.
Why you can still make it work

  • You have the freedom to choose your clients
  • You choose what jobs to take on
  • Your working hours are flexible
  • You can work from anywhere.
02 | THERE IS NO STEADY PAYCHECK
For good reasons, this is the terrifying truth about self-employment. There is no steady income, and the paycheck varies each month. Even when you are good at saving, this factor makes working self-employed a lot harder because of the uncertainty. You don't get to know if today is the last day you work or not. Taking on a mortgage is quite challenging because the salary is irregular. It requires a lot of patience even to have the first client or establish a revenue pattern.

How to ensure you have financial stability:

  • Save when you can
  • Develop a contingency plan before getting into self-employment
  • Make your new job a side hustle for a while until you are sure
  • Get multiple sources of income by increasing your skills and establishing more networks to help you acquire clients from all walks of life. This ensures that when one source of income dries out, you have other sources still running; thus the worry of low and high job season goes away.
03 | SOLITUDE IS REAL
Unless you opened a business and hired other people, self-employment can feel lonely, quiet, or even depressed. It is especially so if you were used to a work environment full of people, colleagues, and workplace noise. The satisfaction of working on your sofa is only short-lived.

How to overcome depression and loneliness:

  • You get to have the freedom of working from anywhere, so if the home environment gets into your nerves you can look for human interaction by, for instance, working from coffee cafes
  • Rent an office space away from home.
  • Join social media groups with other self-employed people
  • Attend work-related events to network
04 | NO BENEFITS
Regular employees enjoy access to health insurance and retirement benefits. With self-employment, you have to figure out all that by yourself, but it is not too hard to do.

  • You can join your spouse's insurance plan
  • Get an insurance plan from an independent company, for both yourself and your dependents. Although it will cost you several dollars a month, it will be worth it. You don't want to be a victim of bankruptcy due to unexpected medical bills. Being uninsured is risky for you and your newly established business.
05 | REMITTING TAX IS NOT EASY
Paying taxes is quite easy when you are employed because the employer automatically deducts it from your salary. Doing this while you are self-employed is challenging but is something manageable.

  • Avoid tax hell by saving at least 25% of your income to cater for tax deductions all year round
  • Pay your taxes four times each year quarterly to have less to worries
  • Hire an accountant who can guide you on how to remit your taxes.
06 | EXPENSES ARE ALL YOURS
You might have taken for granted the reimbursement you get when you attend a summit on behalf of your previous company. As a self-employed individual, you carry the weight of all the costs you incur in your work.

How to manage your taxes:

  • Just like companies are separate entities from their owners, you can make your self-employed business a separate entity from you to ensure you don't feel the pinch when you pay the expenses by yourself.
  • Get an expense tracker app
  • Budgeting software to help monitor your cash flow
FINAL THOUGHTS
As much as the above make self-employment seem overwhelming, it is also the best reward you can give to yourself. The freedom associated with working for yourself is so enjoyable that it makes any stress and negative drawbacks worth all the effort. If not knowing where your next dollar will come from doesn't freak you out, try working self-employed. Nothing is ever easy; you only have to be determined to achieve it. Self-discipline, planning, and the will to do better than the previous day are what steers most self-employed people forward.

FROM THE EDITOR
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