The differences between self-employment and life as a corporate professional are like the differences between night and day.
In many cases, it’s a complete contrast as fundamentally you’re moving from a place that has a high degree of control and being controlled, to a place where you have complete freedom and the autonomy to do as you please.
This freedom and autonomy, however appealing, can also cause much disruption and inefficiency as you are now required to be both leader and implementer. It can take a while for that balance to set in and for you to get back to a level of efficiency.
This is one of the reasons why franchise business ownership can be so great, because you have the structure and process of a ‘corporate business’, yet the autonomy and freedom to implement that structure when and how you choose. It gives you immediate balance and the ability to get things off the ground quicker.
Some of the common differences between self-employment and corporate life include:
Control Over Your Working Life
As a self-employed business owner you have total control over your working life including how much time you choose to work, when you choose to work and where. You are not at the mercy of other agenda’s – you’re the one in control.
Control Over Your Income
As a self-employed business owner you are generally in control of your income. How much you earn is down to you. As you walk further down the path of a business owner you begin to see opportunity everywhere, opportunity that you never would have seen before, and implementing a new product and/or service won’t be an issue for you.
You Get To Choose Your Customers
As a business owner you get to choose the customers that you work with. We know this may seem ridiculous at first glance, but it’s a big benefit of business ownership. If you’ve got a troublesome client who never seems to be satisfied, or worse, never pays their bills, then you have the right to fire them as a client. Some of the best businesses have a handful of regular clients who are a complete joy to work with.
You’re Not Entitled To Employee Benefits
As a self-employed business owner you are not entitled to employee benefits such as holiday pay or sick pay. While you can certainly pay yourself when you’re away or are sick, you still must make sure that you have the money in the business to do so. These employee benefits are often the most missed when transitioning from corporate life to business ownership, but they go part and parcel with the self-employed territory.
You’re Not Entitled To Employee Protection
As a business owner you’re not entitled to protection afforded to employees. The buck stops with you. You are the one that is responsible for all that happens to the business and you.
You Are Responsible For Managing All Tax Liabilities
As an employee the closest you get to tax is seeing the reduction from your pay slip. As a business owner you must upskill your tax knowledge because you are the one who’s responsible for it. You must ensure that all your employees have paid their tax, by withdrawing it from their gross salaries and paying it on their behalf. This includes the salary that you personally draw from the business. You must declare any dividends you receive from the business, if you are a limited corporation.
You Have No Guaranteed Income
One of the biggest shocks that is felt by corporate professionals who transition into business ownership is that lack of guaranteed income. You may have spent years, if not decades, receiving a guaranteed pay slip at the end of the month. However, when you’re self-employed there is no guarantee that you’ll get anything at the end of the month. You need to make sure that the money is the business to allow it to pay you your salary.
There are clearly some major differences between corporate life and self-employment however do not be too alarmed. The underlying theme with of all this is responsibility. As a self-employed business owner, you are responsible for your business, your staff (if you have any), your customers and you. You are the one where the buck stops. If this doesn’t phase you, then chances are you’re ready to be a business owner. If it excites you, then you may have found a new calling.