Looking at Self Employment vs. Traditional Employment

Lifestyle should be your consideration when deciding whether to work a traditional job verses starting your own business. Both options have their lifestyle advantages and disadvantages, and the good news is there's also nothing preventing you from doing both when you're first starting out. In fact, that's how most successful business owners have done it.

The main advantages of working a job are generally predictability, steady income, and sometimes steady work hours. Your income is active, meaning you work a certain number of hours a week, and you get paid a certain amount of money. Gratification is faster, and you see the results of your effort quicker than a business owner usually does.

The trade off with a job is your income is usually capped. You can only work so many hours a week on a steady basis without becoming physically and mentally exhausted by the process. You're also putting your income in the hands of someone else, who obviously can't completely pay you what you're worth to them and achieve a profit at the same time. Sales and commission-type jobs pay better long-term, but you lose a little of the predictability factor in the process.

Home-based and web-based businesses are a rapidly growing trend in our culture, mainly because they require little (if any) upfront capital to fund them and often allow you to work a job at the same time. The Internet has granted people the ability to have storefronts that run themselves, a virtual employee who works for them 24 hours a day, 7 days a week, 365 days a year. These are a great transition point for people with an entrepreneurial spirit but want to do something with a low risk factor.

This has also stemmed growth for franchise-styled business teams, some of which can provide excellent practical training for people of various experience levels. Like any traditional business training however, just be sure to do your homework. There are legitimate opportunities out there as well as scams, so it can pay to be opened-minded but tempered with common sense. Never enter into anything financially before you understand the basics of how and why it works. Most legitimate opportunities will have an education focus to them and will give you time to think, whereas scams tend to get people to enter on impulse.

There are a lot of advantages to owning your own business. The American tax structure can have a lot of incentives available to small business owners that are not available to employees. You'll need to check with an accountant for details on that issue. Having a business can also grant you flexibility and more time, especially with business types that do not always require your physical presence to work. There is also the potential, though not a guarantee, to make more money over the long-term as these businesses grow and become stable. What appealed to me was the ability to get my time back after a time of initial hard work, which in my life holds a lot of value.

The hardest thing for many employees transitioning into business is the lack of almost instant gratification. The work you do does make an impact on your business, but you may not see it until weeks, months, or even years later. There is an passive element to businesses however that allows you to get paid over and over again for previous work, something that employees rarely see in their jobs. The important thing is to not give up too soon, just before your results would have started to appear.

The ability to "call your own shots" is what draws many people to wanting their own business. In the corporate world, job security is an illusion. Virtually no employee is immune from the impact of mergers, downsizing, and layoffs. Through a stable business, or even multiple businesses, a person can develop a safety net of residual income (a term for repetitive income developed from a single effort) that can continue to come in even when the unexpected occurs.

This is also how people can "earn" their time back by developing a steady income that matches or exceeds their living expenses. This takes time and is very rarely an overnight event. It's also not something employees traditionally have the ability to do however.

In deciding whether to go into business for yourself or not, remember the old saying about "putting all of your eggs in one basket." In investing, it is usually a bad idea to stake everything you have on one thing. Yet in our society people do it every day by having only one form of income, usually a job. This does not have to be a decision between two opposites since most people have the ability to do both. It just you have to ask yourself if you're willing to put in the extra effort, lose a little time watching TV or other hobbies, and build yourself something that will help you and your family over the long-term.

It's a decision we all have to make as adults, and there's no right or wrong answer. You have to do what's right for your situation. Only you can decide if your current path can get you what you want out of life or not and what changes to make if it can't. Good luck and best wishes to you!