Working 9-5 vs Self-Employment
Daunted about making the leap to self-employment? It's a huge decision, so let's compare the pros and cons of each option. Let the fight begin!
June 7th, 2010 by Pete Casale
Working 9-5 vs Self-Employment |
It's likely the biggest career decision you'll ever (or never) make. There are a hundred reasons to stay working as an employee, and there are a hundred more reasons to give self-employment a proper go.
Everyone is different - but which one is the beter option for you? Working 9-5 or going self-employed?
Round One:
The $$$ Potential
Straight away, self-employment makes the claim that it can earn you potentially unlimited money. It's true that there are very few millionaires in the world that are not self-employed. However, if working 9-5 is providing you with a stable, regular income, that can be difficult to give up.
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Working 9-5 |
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Your income potential is limited by your chosen career path. Assuming you are at the top of your field, what would you be able to earn? Is it worthwhile? |
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It's a fairly reliable income source. You know you're going to get a certain amount of cash each payday. |
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You can get fired or lose your job through redundancy or company downsizing. |
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You can work harder and the company you work for will see the direct benefit, not you. |
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Self-Employment |
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Because of your ability to expand, your income potential is limited only by yourself. Even if you get more work than you can possibly complete, you can employ staff to help you. |
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Your income depends on you finding the work. This can be hard at first. Ideally you will be able to survive for the first few months without income. |
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Nobody can fire you when you're self-employed. Of course, clients can discontinue your services, but at the end of the day you'll still have your job. |
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The Verdict: Stability is great, but in my opinion the unlimited income potential offered by self-employment is worth the risk. And remember, the risk is only a risk at first. Once you push through the first few months and do well, you'll have an income source that nobody can take away simply by saying "you're fired". Round one goes to self-employment by a landslide.
Round Two: The Job Difficulty
How difficult is it working 9-5? If you ignore the actual content of your job, you basically just have to turn up on time, do whatever you're supposed to be doing, then go home and forget about work.
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Working 9-5 |
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It is a great thing to be able to forget about work for the weekend. This is not always possible with self-employment. |
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You can choose to do the bare minimum work, only just enough to not get fired. That's easy! |
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You probably have to get up when an alarm clock tells you to, even if you don't feel like it. |
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It is rare that you will be able to choose your colleagues, and you'll never be able to choose your boss. If they are people who make your life difficult, tough luck. Find another job! |
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You get paid holidays, sickness leave and maternity leave. |
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Self-Employment |
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You are responsible for getting money in. If you can't sell your product or service, you can't survive. This is the major turn off for many people. |
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In self-employment, you'll need to take care of everything yourself. Taxes, cleaning the office, marketing, sales, strategy planning, management and all other staff positions are assigned to you alone. |
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Self-employment usually lets you work the hours you choose. If you've done what you need to do for the day and feel like an afternoon nap - just take one. |
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Sick? No pay. Holiday? No pay. |
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The Verdict: Difficulty is subjective, and must be balanced by the reward. In almost every case, self-employment will be more difficult going than working 9-5. But is it worth it? Yes. Of course it is. If it wasn't, we wouldn't be making this website.
Of course, taking the plunge to self-employment is daunting. And it's not for everyone. By no means am I saying working 9-5 is for idiots, most of my friends do it, and my friends aren't idiots. All I'm saying is that self-employment is not as difficult as many people think.
Round Three: The Worst Case Scenario
Did you know: it is very, very likely you'll fail to earn enough money to support yourself if you become self-employed? I "knew" this perfectly well when I took the plunge from working 9-5 to self-employment. Then I found out that it was nothing but a myth.
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Working 9-5 |
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Very little risk that you won't get a paycheck next week. |
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Slight risk of being fired, or the company you work for going under, being made redundant, or anything else that can suddenly obliterate your stable income. |
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Self-Employment |
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Making the leap of faith into self-employment is risky, especially if you do it all wrong. |
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If you are careful, plan, and think things through, you reduce the risk. Low or no overheads can almost eliminate this risk entirely. |
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The Verdict: As I mentioned above, I believed there was a very high chance of failure when I started self-employment. I didn't know anyone else who was self-employed, so I had no advice. So I did the next best thing. I carefully planned and worked out what I would have to do to avoid failing at self-employment. Simply being careful will go an awful long way.
Round Four: Quality of Life
Enjoying your life. How important is it? Ask any really old person and they will probably tell you it's fairly important. Of course, enjoyment can be gained from working for someone else, as well as self-employment.
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Working 9-5 |
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Same overall routine every day. |
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At workplaces there are often better opportunities to be social with colleagues. |
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A phony workplace hierarchy and office politics exist in almost any employed workplace. |
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Self-Employment |
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Choose your own working hours. |
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Working from home is the future, thanks to the internet. May as well get used to it now. |
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Working for yourself means that you get true freedom and you see the benefits from your work. |
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The Verdict: I was going to write more, but I don't need to. The final point in the above box seals the deal for me. If you work for yourself, and you work a little bit harder or do something right, you see the direct benefits.
If I worked for a hammer factory, and I worked really hard and produced 15 hammers that day instead of my usual 10, then the company makes more money, not me. The boss may give me a pat on the back, and I recognize that praise is a strong motivational factor. In Maslow's Hierarchy of Needs, praise is high on the list.
However, if I owned that hammer factory, and I worked really hard and produced 15 hammers instead of 10, I would get all that extra money and more importantly I would see a direct result of my work. This is self-actualization, which appears at the top of Maslow's Hierarchy of Needs. Self-actualization is when we see a direct result of our work, which validates all our work directly.
And The Winner Is...
I'm not saying working 9-5 is less valuable, credible or viable than self-employment. However, I have to say that I don't know many people who go from self-employment back to working 9-5. That has to say something.
I used to work 9-5. Now that I'm self-employed, I can safely say that I will work very hard to keep it this way. In fact, if I was making just half the money I made now, I would still stay self-employed. If only for the fact that I don't have to get up when an alarm clock tells me to.
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