By Erin Tigro
People may decide to open a business or work on their own because of a layoff, a desire to change fields or retirement. They may buy an existing enterprise, purchase a franchise, open a startup or undertake consulting work. Whatever the reason, more and more Americans are going into business for themselves.
Benefits of Self-Employment
If you're currently unemployed the most obvious benefit to being your own boss is that you'll have an opportunity to start working again and hopefully earn an income. Instead of waiting for employers to respond to your resume or attending fruitless job fairs, you are the one controlling your career path. As an entrepreneur, you can work as hard as you want. The hope is that the more planning and dedication you put into your business, the more success you'll have. Another potential benefit is the flexibility of hours. What's more, freelancers, contractors and business owners may be eligible for certain tax breaks and deductions that are not available to traditional workers. Let's not forget about the psychological benefits of enjoying your job as well as the pride that comes from being able to say that you work for yourself.
Disadvantages of Self-Employment
While there are a number of benefits to being your own boss, there may be times when you wish for the ease of being an employee once again. Depending on the kind of business you'd like to pursue, you may need to find a way to fund your venture. Once you get the ball rolling, you won't get paid vacation or sick days. Additionally, health insurance and retirement costs are entirely your responsibility. You are also solely accountable for paying your taxes, a cost that is generally split between a traditional employer and employee.
Planning and Resources
One of the keys to starting a business is effective planning. Consider the type of business you'd like to have and evaluate your potential competition. Take a realistic look at the costs that would be involved, such as marketing, supplies, equipment, stock and utilities. The U.S. Small Business Administration offers a number of free public resources, including articles, multimedia tools and links to information regarding loans, industry regulations and legal needs. With local chapters across the nation, SCORE is another helpful organization. Business owners and those considering becoming self-employed can take advantage of free in-person and online counseling sessions and workshops.
Continue reading to find out what your college degree means in today's job market.