4 Guidelines for Going Self-Employed

Employment at a large corporation and self-employment both offer different advantages, disadvantages and benefits.  Some people are simply too entrepreneurial to be happy working for a large corporation. Others are way too dependent to be responsible for generating their own income. Is self-employment a realistic option for you?

4 Main Factors to Consider Before Going Self-Employed

Salary. One of the best things about being self-employed is getting to keep all the profits. Of course, the government will still take their share in taxes, but they do that even if you are working for an hourly wage. When working in a corporate environment your take-home pay is based on what the corporation feels you are worth. With self-employment, you get to take home everything you have earned after expenses. The amount that you earn is directly proportional to the amount of effort you put in to your work.  If you sit in a cubicle in corporate America and put in 8 hours of hard work, you are still going to take home the same hourly pay that you would if you sat in your cubicle and surfed the Internet all day. However, you might not have that job for much longer with such habits.

On the other hand, working in a corporate environment almost guarantees you a paycheck. With self-employment, you may not have the business required to cover your overhead costs and still make a salary. Many small businesses do not turn a profit for several years. During this time, the self-employed are required to work long and hard hours just to keep their dream alive. With a corporate job, you know you will be paid if you work.

The question lies with where your motivation leads you.  If you’re the type of person who has a passion and is willing to work hard, you could be served very well by self-employment. However, if you want security and a stable workload, a corporate job might be more of what you’re looking for.

Health benefits. If you work for a large corporation, chances are you are going to be eligible for a group Health Insurance plan for you and your family (if applicable).  The amount that you pay for this insurance through your employer is going to be significantly less than the insurance rates you will pay being self-employed.

In some areas, there are non-profit groups that offer group policy insurance to self-employed business owners at a lower rate, which is a bonus if you are able to take advantage of such a program.  However, those plans are usually limited in coverage and scope. In addition, the cost of the plan versus an employee group plan is still much higher.  So, in the case of health benefits, working for a corporation will save you money and offer you more coverage. This could be very important depending on age, size of family and type of business — as well as other factors.

Vacation. Vacations for the self-employed are highly variable.  If you run a service-based company and you are the only employee, chances are you will begin to forget what “vacation” means.  If you alone operate a brick-and-mortar business, then you can definitely take a vacation — but you will be losing business (and money) while you are gone if the shop is closed.  If you are able to operate a business with employees and trust them to handle the business while you are away, then you can take a vacation while they run the show.

However, a self-employed person on vacation is seldom completely relaxed.  You will continually be thinking about your business. Thinking about the employees you left in charge and worrying about their performance. If you are the sole employer of your business, you will spend your vacation worrying about the money you are losing while the doors are closed.

Working for a corporation as an employee allows for a definite number of stress free vacation days per year.  You can go on vacation knowing that you are being paid a salary for the days you are gone, there are plenty of other co-workers to handle the load while you are on vacation, and the success or failure of the company is not solely in your hands.  With the exception of being the sole operator of a service-based business, both self-employment and corporate employment offer the option of vacation. The differences are the mental and financial impacts of each option.

Freedom from schedule. Generally the corporate workforce works eight hours a day, Monday through Friday.  There are (of course) requirements for overtime, evening hours and weekend hours whenever necessary.  The company you work for and the supervisor that oversees you largely determine the hours you work.  A typical example would be the expectation that you are in your office chair at 9 am, you are allowed one hour for lunch between 12 and 2 pm, and you are expected to remain in your office chair until 5 pm.  You have to apologize when you are running late in the morning, you have to ask permission to extend your lunch by half an hour for a personal errand and you have to request permission to leave at 4 pm instead of 5 pm — and then make up that hour the next day.

Setting up your own schedule is one of the benefits of self-employment.  If you would rather start later in the morning, you can.  If you need to schedule a personal appointment in the middle of the day or in the late afternoon, you can. You are free to arrange your work schedule to fit your personal schedule. If you’re the type of person who likes to work hard and fast in a shorter amount of time then that’s your prerogative.  If you prefer to do a little work here and there with large breaks in between — and that fits with your business model — then that’s what you get to do.  Being your own boss gives you extreme flexibility with your own work and your own schedule.


There are both benefits and disadvantages for choosing self-employment over corporate work, and vice versa. In the end you need to ask yourself what form of work best fits your attitude and needs. By reviewing each of these aspects, you should have a good understanding of where you fit between the two. One thing rings true whether you choose self-employment or a corporate job. Your success depends upon your own hard work.


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Joshua Riddle from www.JoshRiddle.com and www.NorcalTechSolutions.com is a freelance web developer and contributing author. His writing specializes in time management, productivity strategies, technology based tutorials, and work-flow. His development specialties are Web 2.0 style interactive PHP / MySQL database applications.


  1. pierre on the 13th January

    Great article Joshua.

    I’m currently working for a company as a software developer, I’ve doing all the hard work for the past 5 years and getting that fixed amount at the end of each month. I’m passionate about what I do, even when I’m doing it for a company that gets all the credit, i craft every single detail with passion. I can imagine the thrill when doing the same work for me! The benefits must be rewarding.

    My only concern is: “New income”. The rest can be managed as long as I’m financially secured. But how can I get more projects? What if I wasn’t able to find anything for a whole month? I cannot keep up with that.


  2. TrafficColeman on the 13th January

    My freedom to do what i want and when i want is what gives me joy..I work my tail off each day to make things happen for me an my family..that’s my reward..

    “Black Seo Guy “Signing Off”

  3. Bryan Thompson on the 13th January

    I would agree with TrafficColeman above. This is, as Tim Ferriss would say, the currency of the “new rich.” To have time and mobility at your fingertips. As a family man, the insurance is a benefit that has affected my decision to work from home. Also, my clientele has served me well as a part-time freelancer, but isn’t enough to sustain us long term…yet. Perhaps 2011 will change this. 🙂

    Thanks for the pros/cons list, Joshua. It was a great post!

  4. Daquan Wright on the 14th January

    To the first guy: You’ve got to market yourself and get your name out there, pass out business cards to local businesses as well. It’s ALL about putting yourself out there. A mediocre designer can make millions if he can market himself like a genius, this is the business side of things. Be “confident” in your ability to succeed, and you will succeed greatly. I damn near guarantee it.

    Take a look at music videos, musicians, etc… I look at many things in creative industries.

    Why do bands or groups sell millions of CD’s? Because many people know about them (exposure) and they like what they make.

    Being good at what you do is great, but worthless if no one knows who you are. Getting to know people is more important than any of your precious programming skills. 🙂

    I’ve only done some marketing on a certain forum I go to, and the dividends are already showing themselves. Of course, you at least want a part-time job before freelancing…you don’t just jump into it.

    The part-time job provides a small stable income while the freelancing income becomes stable.

    Personally I want to work for a company, the health benefits are just a necessity for me and the steady paycheck makes me happy. I’ve decided for life to be a user interface designer and web developer, I’ll freelance my skills there while getting a job at a corporation. If you’re scared of freelancing, I really do recommend doing a part-time job alongside it. You have to give yourself time to grow.

  5. Brian Altenhofel on the 17th January

    Great article. The only part I don’t agree about is the health benefits.

    Group insurance policies (at least in my experience) are based on the average health of the employees expected to be covered by the policy. A policy through Wal-Mart, where they employ many younger healthy people, is relatively inexpensive. If I recall correctly, the employee picked up 1/3 of the premium, and mine was around $60/month (so $180 total).

    At my next job, I worked for a school where 85% of the employees were over 50, and most of those had heart problems, diabetes, or other significant health issues. My insurance was paid 100%, but according to my paystub Oklahoma taxpayers were paying $650/month for my policy.

    Finally, when I went freelance, I got my own individual policy. I was prepared for a $300 or so premium. Last year, my premium for a plan that provided more coverage than my previous plans was a surprising $97/month. However, since the first phase of Obamacare has gone into effect, that’s gone out the window – my coverage level dropped and my premium has gone to $160/month.

  6. nucreativa on the 22nd January

    Freedom from schedule is the most important for me 😀

  7. Jon Danzig on the 2nd July

    Your readers may be interested in a 5-minute video I wrote and directed called, ‘Could You Be Self-Employed?’


  8. J. Johnson on the 21st January

    Interesting article, no doubt I have thought about these things (and more) and have weighed them. I’ve had my own home based business for more than a decade, however, I also work at a salaried corporate job for 22 years. Now my business income far surpasses my jobs income and I’m getting ready to say bye bye to my corporate job and run my business full-time, it really takes a good 7-10 years to build a solid business and gain experience. Leaving my corporate job will allow me the freedom of schedule and to grow my business even more. I’ve worked hard over the last decade to make this a reality and its finally coming to fruision, people tell me, “I wish I had what you have” I tell them you can but you have to want it bad enough to get it. You have to put the hours in, you have to have determination. I started my company off with $500, a dream and a lot of determination. when I tell that to people they are astounded, because today, although we might still be classified as a small business we do very well and we have enough saved in both our personal account(s) and business accounts to last 2 years without having to add a single penny to it if things suddenly went awry, which obviously isn’t going to happen but its nice to know you have the back-up if needed.

    Having capitol is an important aspect owning your own business too, if you don’t have the funding to purchase you are limited and I don’t like limits. Being able to work while building my business has allowed me to build up a fair amount of capital, it has also allowed my wife and I to pay off many bills and take care of anything major we wanted to do to the house. Those are also important things to consider before jumping head first into the water, remember, you want things to be as stress free as possible, you’re running your own show now, you don’t want to worry about spending money on a huge expense etc. get it all out of the way while you’re still working at your job and build your business while you’re biding your time at work. Remember, it takes a good 7-10 years to build a solid business…

    Another important thing about owning and operating your own business is to incorporate, your accountant can help you decide which type of corporation is best for you and your business. We incorporated 6 years ago, among other benefits, if someone files a lawsuit against your company, they can only file suit against your company, they cannot go after you personally or your personal belongings, they can only go after the corporation. Protect yourself and your family from lawsuits by incorporating…

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