Navigating the Choice: Self-Employment vs. Traditional Employment
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Chapter 1: The Desire for Independence
Many individuals aspire to be self-employed, much like they yearn for physical fitness—they crave the results but often shy away from the demanding journey to achieve them.
This sentiment is echoed in the insights of former UFC fighter and entrepreneur Dana White, who sheds light on the common misconceptions surrounding the realities of running your own business compared to being employed by another.
After spending the initial decade of my career working for various companies, ranging from large firms like Lockheed Martin to small startups, I transitioned into entrepreneurship for the next ten years. From this dual perspective, I can weigh the advantages and disadvantages of both paths.
Section 1.1: Benefits of Employment
Tax Season
For those employed by others, tax time is an annual event. You collect your paperwork for a few frustrating hours of navigating the convoluted tax code, then move on with your life. In contrast, as a business owner, you face a constant state of tax obligations, which can involve weekly filings and payments depending on your operations and location. Many are unaware that while employees have half of their 15.3% social security and Medicare taxes covered by their employers, self-employed individuals must shoulder the full burden.
Freedom to Step Away
Whether you need to take a brief sick leave or a permanent exit, employees can leave their worries behind. The responsibilities of vendors, creditors, and employees do not follow you home, allowing for a clean break whenever necessary.
Consistent Paydays
Employees enjoy the security of regular paychecks. On set days, funds are deposited into their accounts—this money is rightfully theirs.
Section 1.2: Advantages of Self-Employment
When Your Business Is Self-Sustaining
The notion of a "turn-key profitable" business implies that it can function independently and generate income. However, this is a rare achievement; most entrepreneurs begin with a hands-on approach and struggle to reach profitability. Even those who attain success often find themselves tethered to their business, unable to step away without worrying about its stability.
The reality is that self-employed individuals frequently endure a demanding schedule, answering to a multitude of stakeholders. They may work around the clock, constantly managing employees, customers, creditors, and regulatory bodies. This leaves little room for the freedom they initially sought.
Even freelancers can find themselves overwhelmed, discovering the many obligations they have to clients and the complexities of their tax situations. The pressure to remain available often results in a continuous work cycle.
Creating a workplace where employees can thrive and go home at the end of the day is a significant challenge. Entrepreneurs who manage to establish such an environment often realize that true freedom is still years away. Those who start a business primarily to escape a difficult job often end up disillusioned and may inadvertently become the very type of boss they sought to escape.
If your motivation for becoming self-employed is rooted in frustration rather than a genuine passion for your business, seeking better employment might be the wiser choice.
Chris Newman is the founder of Sylvanaqua Farms, Skywoman, Pilikeku Media, and the Blackbird Poultry Cooperative. Support this work by sharing this article, signing up for Chris' Patreon, and/or making a donation to our farm's mutual aid pool.
The first video, "Working for THEM vs. Working for YOURSELF," explores the contrasting experiences of employees and entrepreneurs, highlighting the challenges and rewards of each path.
The second video, "Self-Employment VS Working a Job," delves into the realities of self-employment compared to traditional employment, providing viewers with valuable insights into both choices.