If you’ve been sitting behind a desk, pushing paper based on the demands of others, it’s not uncommon to dream of being your own boss one day. That’s the goal, right? Charting your own path, doing the work you want and enjoying the autonomy so many workers don’t have. However, despite the upsides, working as a solopreneur or a full-time freelancer isn’t all fun and games. These are the six hardest things about working for yourself, plus ways you can work through them.
1. A Workforce Of One
When you’re working for someone else, you’re part of a team. The things you do, for better or for worse, aren’t just on you; they’re the product of a group environment. Mistakes can be caught, corrections can be made and subject matter experts can take on the aspects that you yourself can’t master.
When you work for yourself, however, you’re not just the captain of the ship — you’re the entire crew as well. If you miss an important detail or things go sideways, you’re the only person responsible — there is no safety net.
The freedom of self-employment can be a good thing, but if you go into it unprepared, it can be a source of failure instead. Be sure to start with the fundamental due diligence on all major facets of your business, from legal requirements to best practices of customer service, to make sure your solo venture isn’t headed for rough waters.
2. Structure And Scheduling Woes
Making your own schedule is a large part of the appeal of freelancing, but working alone still offers up some scheduling struggles. While it’s often possible to plan work around the more important things in life like family obligations, not having anyone to cover for you when things come up can be a big downside. If an emergency arises on the night of an important event or simply at an hour far later than you planned to be working, your only options are to disappoint clients or to keep pushing forward.
While you certainly enjoy more flexibility when flying solo than you do as an employee, the flipside is that there’s no coverage when the work starts to pile on. Hiring a subcontractor is a possibility, but finding good people is hard, and there’s no guarantee that your contractors will be available when you need them to be. At the end of the day, self-employment usually means the work is yours and yours alone.
3. Overhead Costs
Usually, when you take a job in an office, you’re provided with the basics, like a computer, phone line, office or cubicle space and office supplies. Working solo, however, means that you are now responsible for covering all of these costs and assets. Depending on the context of your business, you may also need other tools, like software subscriptions, a tablet or smartphone, a commercial internet connection and/or room to store inventory.
These overhead expenses can add up, especially if you didn’t already have the services and equipment when you decided to make the transition into self-employment. To manage such costs, take time to note which expenses are deductible at tax time and keep a careful register of what you spend.
4. Unstable Pay
Working a day job comes with a few luxuries, and the most prominent is the steady paycheck. Whether work is busy or slow, your shifts yield a consistent hourly wage or your standard salary is paid.
But when you work for yourself, nothing is for sure. The money you bring in depends on the contracts you sign or products you sell, and for new businesses, these events can be few and far between. It’s not uncommon for solopreneurs to have slow months during the early days, as well as for work to ebb and flow even months or years after launching.
When no one is signing your checks and it’s up to you to generate cash to put in the bank, you have to face a lot of uncertainty when it comes to your wages. Setting aside several months’ worth of savings and putting in place a contingency plan before you launch can help lessen your fears as you wait for a freelance payday.
5. Unfamiliar Paperwork
Whether you know it or not, running a business requires a lot of paperwork, the extent of which isn’t often clear to general employees within a company. Whether you choose to incorporate, start an S-corp or put together an LLC, you have to face the costs and logistics of this yourself. Any legal issues will be on you, and so will drafting contracts to keep yourself covered when negotiating with clients.
This kind of specialized work isn’t easy. Large companies have lawyers on staff to make sure everything is kept above board, but such a luxury isn’t available when you’re working for yourself. You may require the use of third-party legal or financial consultants to keep you out of hot water in serious situations. For example, if you design any products to sell, you need to do the legwork to protect the rights to them before heading to market. Be sure your consultants are familiar with trademark and patent laws, too.
6. Self-Employment Taxes
For the average employee, tax time is relatively straightforward. Taxes are withheld from a paycheck and then W-2s are issued to aid in the preparation of Form 1040 for income taxes. However, the story is different for independent contractors, freelancers, and self-employed individuals.
Without a paycheck that automatically withholds federal and state taxes, as well as Medicare and Social Security, the burden falls on you to address these tax requirements. While it’s still possible to file taxes annually yourself with the right software, handling tax payments is a little less simple. Most self-employed individuals pay their taxes quarterly throughout the year to avoid penalties, and knowing what to expect isn’t easy for non-tax pros. Monitor your liabilities with a self-employment tax calculator and be sure you’re following IRS rules as closely as possible.
There are plenty of benefits you can reap by going into business for yourself, from flexible scheduling to complete independence in operations. However, not everything about working solo is sunshine and roses; downsides to solo entrepreneurship are unavoidable. A big part of succeeding involves knowing your pain points and making a plan to overcome them.
Laura Gayle is a full-time blogger who has ghostwritten more than 350 articles for major software companies, tech startups, and online retailers. Founder of www.BusinessWomanGuide.org, she created her site to be a trusted resource for women trying to start or grow businesses on their own terms.