I know, I know, I keep banging on about the difference between working for a boss and working for yourself (if you don’t believe me, click here and here and here!) – and what a steep learning curve it’s been.
So why IS it actually so different?!
The first reason that comes to mind is that you no longer care about public holidays (it’s the Queen’s Birthday public holiday in Queensland today).
Or if you do care, it’s not a case of “yay, a long weekend!” but more, “how am I going to squeeze 5 days of work into just 4 days?”. More than likely, you don’t even try – you just work – what public holiday?!
And that brings me to another one of the major differences: if you don’t work, you don’t get paid. That means Christmas, public holidays, vacations, sick days …
I Must Confess however: this is still just the tip of the iceberg, when it comes to the difference between working for a boss, and working for yourself!
The Negatives of Working for Yourself
Here are some others:
- You have to set your own pay rate. Forget what you earned in somebody else’s employ; it’s a whole new ball game. Not only do you have to price yourself competitively, you also have to make sure you pay yourself enough! It’s not just your time that you should be reimbursed for – it also includes the training, skills and expertise you bring to your role. To you, it might seem like easy work, it’s not exactly rocket science. The thing is, to other folk it may as well be rocket science, because they can’t do what you do – and that’s why they hire you!
- As mentioned above, you don’t get sick leave, long service, holiday pay or leave loading (so make sure you remember all this as well, when you try to calculate your pay rate!).
- Your employer no longer has to kick in a certain percentage for your super. Now, it’s up to YOU. Another reason to think very carefully about the pay rate you set!
- Oh, and while you’re at it, don’t forget you will need to make sure you are protected with business insurance.
- You have to keep excellent financial records for tax purposes.
- You don’t have income tax taken out of each pay packet for you; so at the end of the financial year, instead of a bonus, you get hit with a bill. (And if you earn enough to include GST, your book-keeping will include a quarterly BAS and other headaches).
- And – book work isn’t billable! A lot of your work you won’t be able to bill clients for / get paid for – not just book-keeping, but wooing prospective clients at meetings, preparing quotes and proposals, marketing and promotion.
- You also can’t charge a client for time spent on bathroom or tea breaks!
- You have to find the work yourself, and get your own clients.
- If you get a personal phone call, or somebody drops in (and they do when you work from home) – guess what, you’re not working. And not working = no pay.
- You work a darn sight harder – and longer hours – than you ever did for somebody else! (Definitely at first, hopefully you will get a better balance as you go along). Don’t get me wrong, I always worked hard as an employee – but there is a BIG difference.
- It can be really hard to switch off from work mode – and especially if you work from home …
- You don’t have a regular pay day. In fact, often you will have to chase up clients for payment – don’t expect anything in your bank account until it actually hits your bank account!
It’s a lot to think about, and so far I’ve focused on the common pitfalls of working for yourself.
The Benefits of Working for Yourself
There is an upside, and although there aren’t as many points, they more than balance things out in my view:
- If you don’t like your boss (a client) – it’s simple – you don’t have to take the job or work with them. I like to start with a trial period of about 3 months with possible regular clients. After that time, if I’m not enjoying the work, or working with them in particular, I increase my pay rate so that they are not keen to continue with my services. And if they do choose to continue, at least I’m being paid handsomely for my trouble!
- You don’t have to ask anybody if you can take a day off, or leave early, or take a holiday.
- You don’t need to go to the doctor just to get a medical certificate if you are sick.
- Your time is a lot more flexible. Doctors or hairdressing appointments – you can make them whenever you like, because you are not limited by 9 to 5. And you’re already at home, working, so it doesn’t matter if the tradesman or repairman doesn’t turn up on time.
- You can be there for your family (if you have one). Even though my kids are 20 and 17, there are still times when they need their Mum – like when Miss 17 had her tonsils out recently. She needed constant care for at least 10 days, and I was able to give her that and still do my work.
- You get to do what you love!
- And finally – the sky is the limit! YOU are the one to reap the benefits, not your boss (I still remember one job I had where a staff member left, so I took on her duties on top of my own workload – and she was never replaced. Did I get any thanks, kudos, or extra pay for it? Of course not! Only later did I find out that the boss DID get a bonus – for budget savings from not filling that position! It still makes me steamed all this time later!)
The difference between working for a boss, and working for yourself, sounds quite simple now I’ve put it down on paper.
But the reality is, I’d never even thought of any of this when I was an employee.
Have you ever thought about working for yourself? I hope I haven’t put you off – despite the negatives, I really love that I no longer work for a boss!
Linking up with My Home Truths because I love a good confession 😉 .