Not everyone is meant to be a boss, just like how not everyone is meant to be a follower. Being your own boss means that you have full responsibility for your business, but you cannot always be fully in control of what’s happening within it. And while you have the freedom to make your own choices, it can be a lot more difficult than when you have someone else to tell you what to do.
What we’re trying to say is that being your own boss comes with pros and cons. So, before you finally take the reigns in your career, it pays to know some of the most common challenges that you might encounter along the way:
Handling taxes
Business taxes are often complicated, and unless you are an accountant, you likely have to hire someone to help you pay your dues correctly. Furthermore, if you want to take advantage of certain tax planning strategies like a cost segregation study, it takes careful planning and consideration to ensure that everything you do is legal.
Insurance
When you are an employee, your employer sponsors health insurance, life insurance, and other forms of coverage—some mandatory and others optional. When you are self-employed, you no longer have access to employer-sponsored insurance, which means that you have to buy your own coverage.
That said, you must consider the additional cost of paying for insurance when you quit your job to become your own boss, especially if you have dependents.
Motivation and self-discipline
Maintaining motivation and self-discipline can either be easier or harder when you don’t have a boss telling you what to do. You are responsible for motivating yourself and keeping yourself on track with your goals. For some, this can be easy. But for others, not so much.
If you belong to the latter group, here are several tips on how to keep yourself motivated and disciplined every day:
- Minimize distractions. Whether it’s the TV, neighborhood noise, or your pet, find ways to minimize the distractions around you—at least while you’re working. The fewer distractions there are in your environment, the more you can focus on what you’re doing.
- Realize your ‘why.’ Why do you want to be your own boss? What are your short-term and long-term goals? What is the kind of life you are working towards? Knowing what you’re working so hard for can be easier to stay on track and get back up when you fall.
- Improve your time management. Make it a habit to use your time wisely every day. Time is your most valuable asset, so be sure to distribute it properly between all of your responsibilities.
Finances
When you start a business, the first thing you need to do is separate your business and personal finances. On the other hand, when you become a freelancer, you can treat every job as a paycheck. Either way, being the one to call the shots often comes with less financial stability. You don’t know when the next job is going to come through or if you can meet your sales goals for the next month. With that in mind, you must set up a financial safety net before becoming your own boss.
To start, set up a personal emergency fund with at least six months of living expenses. If you have dependents, bump that value up to twelve months. The more cushion you have, the less likely you will suffer a fallout if something goes wrong. Similarly, set up an emergency fund for your business before you start it so that you can avoid going in the red when things don’t work out.
Setting boundaries
Life is different when you’re the one making decisions. You are more likely to work longer hours; you are expected to answer calls outside of business hours. You are usually the first person to respond to business emergencies, which can lead to the line between your personal life and career blurring.
To avoid this, set clear boundaries from day one. Set up business hours, create a home office, and avoid working when you’re not supposed to be. Moreover, help your family understand that you aren’t always available even while you’re at home, and they must respect the boundaries that you have set so that you don’t have to work longer than necessary.
Being your own boss can be an exciting change in your career. You won’t have someone breathing down your neck; you can exercise full freedom with your business decisions, and you can explore opportunities that you wouldn’t have if you were an employee. However, it pays to know what kind of challenges you can meet down the road—and what you can do to overcome them.
