The Downsides of Being Self-employed

Despite some advantages of being self-employed, the downsides are just too many to ignore.

Many highly skilled professionals rush into self-employment without taking time to think about some of the implications.

They believe it’s the same as starting a business, which we have clarified here.

But there is a need to highlight some of the disadvantages that come with being self-employed, which is what we aim to achieve through this article.

Five (5) Disadvantages of Self-Employment

1. Inconsistent Income

One of the biggest downsides of being self-employed is that you are never sure whether you’re going to be paid the next month, or even how much you’re going to be paid.

The inconsistency in income makes it difficult for you to guarantee a consistent source of income, or even pay someone to take on some tasks on your behalf.

2. Work to Earn

Another huge downside of being self-employed is that it is more like having a job than being a business owner because you have to work to earn an income as an employee would.

That is okay in itself, but the problem is that most self-employed professionals quit their jobs to become a boss and have more freedom.

But unfortunately, the freedom they get in self-employment is limited.

They have to work hours to earn an income, and when they take a break or go on holidays, they don’t get paid, just like taking an unpaid holiday.

That is not freedom if you ask me.

3. You Have To Do Tasks You’re Not Passionate About

As a self-employed individual, you have to work long hours doing more tasks than you would have done if you were employed or running a business.

Being self-employed means you have to take on multiple tasks – including the ones you are not passionate about and the others you don’t know how to do so well.

Naturally, this leads to burnout, stress, frustration and impacts the success of your self-employment because it depends on you a hundred per cent.

4. High Risk

Being self-employed is a high-risk adventure.

Firstly, because it depends on you for everything, which means the business cannot exist without your physical presence.

That means in the unfortunate event of sickness or death, your “business” is not structured to survive.

Secondly, the impact of losing a client is higher in self-employment compared to a business owner.

Because self-employed individuals typically have fewer clients and do not take steps to minimize the impact of client loss for whatever reason, as they never have any time to think about the big picture.

5. Difficulty Getting Capital

If you think raising capital as a small business owner is difficult, try raising capital as a self-employed individual.

First, your options are limited to family and friends and your savings and personal loans, since it is difficult for lenders to separate you from your profession.

And secondly, if you are finally able to convince a lender to take you seriously, they would have to lend you the capital you need at an exorbitantly high-interest rate thanks to the high risk associated with self-employment.

Are you self-employed? Please share any disadvantages of being self-employed we didn’t highlight in the comments section below!

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