Could You Earn Enough Money Being Self-Employed?
Could self-employment become a reality for you? Or are you just fooling yourself? With the right pieces in place, becoming your own boss could be the right path for you.
You’re burned out on your job. Or maybe you have a marketable skill that you could do independently from home.
When making rough calculations about what your salary versus what your boss charges for services, you know that your company’s earning boatloads of money while you slave at work. Perhaps it’s time to contemplate whether you could earn enough money if you became self-employed, having your own business.
Do you possess these qualities?
Some people have the personal qualities that it takes to be self-employed.
They work well without supervision and are self-starters. They are also highly motivated and well-disciplined individuals. They typically have good people skills and some creativity to help give their business an “edge” over the competitors. They have gumption and are skilled at “thinking outside the box.” And they know they must ultimately take ownership for anything that goes wrong with the business regardless of how many employees they have.
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What product and/or service would you sell?
If you already have an idea of what you would sell, you’re on your way to operating your own business. Maybe you have a hobby you’d like to turn into a business. Or possibly you could start a cleaning service or perhaps a maintenance and repair company.
Calculate what level of income you need to live at the standard of living to which you are accustomed and figure out realistically how much money you could earn with the small business you are considering. Writing a business plan is a necessary part of this process. There are many sites online to assist you in creating a business plan, and also local resources in your area are available, such as The Service Corps of Retired Executives (SCORE) at Score.org and also the Small Business Association (SBA), SBA.gov.
You will then need to determine if having your own small business and being self-employed is a reasonable option for you and your family and if you should simply quit your job and get rolling with the idea or transition into it slowly while you are still employed, so you can test the feasibility of working for yourself.
What legal considerations and tax obligations can you expect by being self-employed?
Before opening your doors for business, you will need to determine if you will be a sole proprietorship, a partnership, or some type of corporation such as LLC, a popular way to go these days. A consultation with a business attorney may be money well spent to make this decision on how to legally organize your business. Each of these structures has its own advantages and disadvantages.
And let’s not forget taxes. If you purchase property for your business, you will be required to pay real estate taxes. If you sell a product and certain services, your state requires you to collect and then pay state sales tax. Many states require an unemployment tax to be reported and files quarterly. And you will need to keep precise accounting records to determine your state and federal income taxes and probably make quarterly estimates.
How will you find your clients or customers?
So maybe you do have all that it takes to be self-employed. You have self-discipline and a marketable product or service. And maybe the income potential is really there. You have a certain number of clients to bring in a necessary level of revenue. Is that the guarantee for a successful business?
The missing piece here is that you need a market niche, something that makes you stand out among your competitors. You need to have a sense that there is a need for the service or product that you are selling. And perhaps most of all, you need to have a solid marketing plan or a way for customers to know to come knocking on your door. It involves much more than just having a cute or catchy name for your business or a clever website. Potential customers need to have a sense that you are the right “go to” person or company for the job.
Reviewed February 2021
About the Author
Debra is an occupational therapist, accountant, teacher and freelance writer. She is a writer for Advance for Occupational Therapy Practitioners. She also writes for Grand Magazine, has some items (fiction and non fiction) selling on Amazon.com (Kindle), has written several travel articles for the Champaign-Urbana News-Gazette and several articles for freelancewriting.com and volunteers as a money mentor for the University of Illinois Cooperative Extension money mentoring program. Learn more about her at DebraKarplus.blogspot.com.