January 2, 2012, 5:00 am

The Pros & Cons of Full-Time Self-Employment

by: The Financial Blogger    Category: Business,Make Money Online
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Hey! I hope you had great Holidays! I’m still on vacation but I’ll be returning to my regular posting schedule soon (I just have too much fun playing with kids right now!). In the meantime, my friends over at Money Crashers offered me this good guest post. Stay tuned for Wednesday, we are starting the year with our Best Stock Pick contest!


David Bakke runs an online reselling business out of his home in Atlanta and contributes his thoughts and analysis on small business, entrepreneurship, and money management on Money Crashers.

I’m currently in the process of transitioning out of my day job and into full-time self-employment. I have always wanted to own a small business, and through hard work, my venture now generates enough income to replace my full-time job.

There are many advantages to self-employment, but this endeavor also presents a whole new set of challenges. To make the transition as smooth as possible, carefully weigh the pros and cons of self-employment before you quit your full-time job.

Pros & Cons of Self-Employment


1. You Can Set Your Own Schedule
Once you take the leap, you can say goodbye to the nine-to-five grind. You can work the hours you want and follow your own schedule. Having such a flexible schedule particularly benefits Internet-based small businesses, as you can get much accomplished during non-traditional working hours.

2. You Have More Time to Spend With Family
This was the top reason why I wanted to become self-employed. While working a full-time job, I feel as though my son is growing up without me. As a divorced father, the time I get to spend with my son is precious, and working 40-plus hours a week, Monday through Friday, severely limits my quality time with my son. As I transition into full-time self-employment, I plan to spend as much time as possible with my son.

3. You’re the Boss
As a small business owner, you decide how to run your company. You report to no one, and have complete control of your company’s direction, success, and growth. With a little confidence, an organized business plan, and a willingness to take risks, your business can thrive under your leadership.

4. Income Potential Is Unlimited
Spending a lifetime climbing the corporate ladder chasing the almighty dollar works for many people, but this limits the amount of income you can earn.

By running your own small business, you have unlimited opportunities to generate income. Sure, you will have to work extremely hard in the beginning and your business may grow slowly, but if you stick to it and remain passionate about your endeavor, good things will happen. Once you have gained experience and established your business, the growth of your venture can be exponential.

5. You Have More Freedom and Flexibility
Without a boss to answer to, you have increased freedom and flexibility with your work schedule. If you are self-employed, you do not have to request time off for a doctor’s appointment or for your children’s events. Instead, you simply rearrange your schedule. If you create a work schedule for yourself and stay on top of all engagements, you can easily balance your professional and personal responsibilities.


1. Personal Health Can Be Difficult to Maintain
You don’t want to ignore your personal health when you start your small business. I currently get plenty of exercise at my job just doing my day-to-day activities. However, once I make the transition into self-employment, I know that I will need to create and maintain a scheduled exercise regimen to stay physically fit. This will involve a time commitment, which I have to factor into my new work schedule.

2. Time Management Is Challenging
If you thought managing your time while juggling a full-time day job and running a side business was tough, wait until you become self-employed.

First, you must figure out how to schedule vacations for yourself without letting your business suffer. This is especially challenging if you don’t have a business partner.

Next, you will quickly learn that you cannot work seven days a week for a long period of time. This is counter-intuitive to the benefits of self-employment, so you’ll need to manage your time in a way that allows for days off. In the beginning, you may have to work long hours and you may have to work on the weekends. But remember, this is only temporary. Once your business gets off the ground you can begin taking time off.

3. No Steady Paycheck
Along with saying goodbye to the daily nine-to-five grind, you can also forget about that steady paycheck. You may experience inconsistent revenue streams, especially when you first become self-employed.

Have a backup plan in place for the instances when you don’t generate enough income. Save money wherever you can, and if you have to temporarily suspend retirement savings or other investment contributions, commit to getting back on track within a scheduled time frame.

4. Responsibilities Greatly Increase
Being your own boss is a benefit of becoming self-employed, but it also comes with certain risks. You will be personally and financially responsible for all decisions made, and one wrong move could cost you your business.

However, most small business owners have an entrepreneurial spirit and a willingness to take risks. With hard work and a surplus of self-confidence, you can overcome the challenges of being the boss.

5. There Are No Health or Investment Benefits
I had a number of concerns about health insurance for my son and myself, as well as concerns about maintaining retirement and college savings investments when I began to consider leaving my job.

I found plenty of health insurance options for the self-employed, but it took careful research to find the best coverage plan. Many options also exist for retirement savings plans, but this requires additional financial oversight to ensure that you adequately prepare for an enjoyable post-work life.

6. You Must Cut Personal Expenses
Once you make the transition to full-time self-employment, saving money will help you achieve your business goals. This involves cutting back on personal spending and finding new ways to save money every day.

Once you have established your business and you achieve more consistent revenue streams, you can begin increasing your personal expenditures. But plan to have some frugal times when you first become self-employed.

Final Thoughts

If you have a passion for it, I highly recommend starting your own small business in the hopes of someday walking away from your day job. There is an entrepreneur inside all of us – it is only a matter of uncovering one of your talents and deducing how you can turn it into a money-making opportunity. The benefits of full-time small business ownership far outweigh the drawbacks, and it can lead to a much more rewarding life for you and your family.

What are your thoughts on walking away from your day job? Do you have any tips for starting your own business and adapting to the new lifestyle?

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I totally agree with you, there are many advantages and disadvantages to self-employment.

I just spent the past week away from work for Christmas holidays and found it tough to get motivated some days. The downside of it, is that I didn’t have a set schedule.

Even though I don’t have a set schedule when I work M-F, I do have a schedule in my head. Go to work, come home, go to this appt. , answer emails and write posts on this day etc…

Good luck with pursuing your passion. Being a business owner my self (even on pt basis) I get a great sense of fulfillment.

good list. curious how your day to day keeps you fit. do you sit on a bouncing ball? or walk from one end to another frequently? do you have a stand up desk?

I mostly agree with you, but I don’t think unlimited income potential is very realistic for 99% of us. So many small business fail or barely get by.
The health insurance is a huge factor. I’m planning to get on my wife’s plan, but I realize that’s not an option for everyone.
Good luck!

While the rewards may be great, the lack of a steady paycheck and no health insurance will definitely chip away at you if you plan on being self-employed. Unless you are a highly self-motivated person with great organizational skills, save yourself the trouble and work for a company that offers health insurance and other benefits â?? your life will be much easier.

Working from home is great and offers much flexibility. I really enjoy it, but as others pointed out, if you can’t get on a spouse’s insurance, paying for it yourself, especially if you have a family, can be cost prohibitive.

Just one health insurance alone might break your bank especially if you have family to take care. Self-employment looks like a dream but it is much tougher than most of imagine.