Understanding the pros and cons of self-employment and why the payoff is worth it
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Have you ever dreamed of being your own boss? It’s a tempting thought many Canadians have. We picture the flexibility, freedom, and the potential to retain more of our income by contracting out our services directly. The allure of a three-day workweek and extended vacations starts to feel incredibly appealing.
But how realistic is it? And what challenges do you need to manage to be successful in self-employment?
Income stability: The biggest hurdle
One of the toughest challenges self-employed Canadians face is building a reliable and steady income stream. For some, the transition can be smooth. Take Jeff, for example. Jeff left his employer and now contracts directly with one of his former clients. He’s doing the same work for the same people but without a middleman taking a cut. In the short term, this seems like a great move, and in the long term, Jeff hopes to establish his own consulting business.
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But the risk for Jeff is that, as an independent contractor, he’s easily expendable. If his client’s project is cancelled, his contract ends, and so does his income.
My advice to Jeff? Start looking for your next client now.
Then there’s Ruth, who has been self-employed for three years. Her consulting business thrived during economic boom times, with a growing client base and steady demand. But now, with rising costs and a slowing economy, her clients are tightening their budgets, which means less work for Ruth. She’s finding that she needs to shift gears and focus more on business development – a skill set she didn’t anticipate needing when she started out.
My advice to Ruth? Get proactive about finding new business channels and work to weather this rough patch.
The need to sell yourself
If you want to succeed as a self-employed professional, be prepared to sell yourself and your services every day. If you enjoy doing the work but find the idea of selling it uncomfortable – or even terrifying – self-employment might not be the right path for you. When the economy is booming, contracts may come easily through your network. But in tougher economic times, more people are chasing fewer opportunities. You need to be ready and willing to fight for your share of the work.
Building structure and discipline
One of the less obvious challenges of self-employment is creating your own structure and deadlines. When you’re employed by a company, there’s always someone keeping you on track, whether it’s a supervisor or looming deadlines. But when you’re on your own, you’re the boss, and that can be both freeing and daunting.
My advice for anyone starting out in self-employment?
- Build a plan. Know what you want to achieve.
- Set priorities. And stick to them.
- Ruthlessly manage your time. Distractions can be costly when you’re self-employed.
- Get serious about your finances. Remember, you’re not just managing your business; you’re managing your family’s livelihood.
Seek out support
Even though you’re self-employed, you don’t have to go it alone. Look for help and support wherever you can find it. Join entrepreneurial support groups, which often provide valuable resources like workshops on business planning or marketing. Finding a mentor or starting your own networking group can also be invaluable. Get all the support you can. The more you surround yourself with knowledge and encouragement, the better your chances of success.
Balancing risk and reward
There’s no doubt that self-employment comes with significant risk, especially in an unpredictable economy. But there’s also an immense reward: When you’re starting out, you’re operating without a net. You have to enjoy the roller coaster. But at the end of the day, your successes are your own. And that’s the best feeling in the world.
If you’re thinking about taking the leap into self-employment, be realistic about the challenges, stay disciplined, and build a strong network. With the right mindset and preparation, self-employment can offer flexibility and freedom and the deeply satisfying reward of building something that’s entirely your own.
Rebecca Schalm, PhD, is founder and CEO of Strategic Talent Advisors Inc., a consultancy that provides organizations with advice and talent management solutions.
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