Who’s right for self-employment?People setting up their own business are taking a big step. Those who have never been self-employed before, therefore, should look at what such a step really entails. The only way to find out whether a person is suited to self-employment or not is by looking in great detail at what self-employment really involves.
Self-employment means greater responsibilitySelf-employment generally means a much greater level of responsibility than, for example, an employee has to face. Financial aspects need to be taken into account such as paying towards a pension or how to finance a period of unemployment if the business fails. Furthermore, entrepreneurs are not only responsible for their own position but also for those of his/her future employees.
Self-employment does not automatically mean a top salaryMoving from a “secure” position as an employee to running your own business also entails a change in income. Instead of receiving a relatively constant salary every month, the income of a self-employed person depends on how successful the new business is. Setting up your own business does not mean that you can pay yourself a top salary. On the contrary, during the start-up phase, the boss of a new company may find himself earning less than his employees. Even when the new business is a success, entrepreneurs must often plough profits back into the business to keep up with competition rather than give themselves a larger salary.
A business idea and a sustainable business concept are poles apartPeople looking to set up their own business should realize that there is a huge difference between having a good business idea and having a sustainable business concept. In reality, only those business concepts, which have been planned and developed down to the very last detail, have the potential to be a success on the market. And such a development involves a great deal of work – before, during and after the start-up – and normally with a much greater workload than an employee is used to carrying out. At first glance, self-employed people appear to have much greater freedom which someone tied to a contract would really like to have. However, self-employment also involves many constraints which curb this freedom such as market forces, customer requirements, pressure due to costs or technical problems. When self-employed, though, there is always the freedom to look for the right solutions and not only to implement them but to develop and design them yourself.
Franchising means less freedom for entrepreneursThis freedom is limited, however, in a franchised business as the framework of a franchise partnership means that entrepreneurs are not always free to make their own decisions. On the other hand, setting up a franchise business often means lower business risks that setting up on your own.
Potential entrepreneurs should inform themselves in detail about what self-employment really entails – no matter whether they are considering setting up on their own or as a franchisee. There is a huge amount of information available, both on the Internet and in the local community, to learn more about “making a business start-up a success”.