Many of us dream of having our own company and being our own boss. Being tired of the 9 to 5 and even more hours on top given to our employers. We know we have more to give, we crave the freedom to make our own choices and be in control. We might just as well enjoy the security of having an employer. When going from employee to self-employed, there are trade-offs that all of us should think about.
I’ve moved from one to the other several times: I’ve first started out as a professional basketball player, then became an employee in the banking sector in Luxembourg and, a year ago I went into the realm of being self-employed and owning my own company. This was a very interesting step for me as I’m sure it is or will be for many of you. So, here are the three trade-offs I have experienced.
Trade-off #1: A consistent salary
When you work for an employer, it’s easy to get used to a fixed salary, net of tax, hitting your account on a monthly basis. When you’re self-employed or owning your company, you must always look for clients to secure an incoming cash flow. If this doesn’t happen, then you can’t pay yourself a salary or pay your tax and social security contributions. As an advice, always take the step to being independent when you have a good amount of savings for those rainy days when the economy drops.
Trade-off #2: People’s perception of your role in the workplace
If you move from employee to consultant without a break, it’s very difficult for the management and your colleagues to suddenly see you as “the expert”. The behaviour and stance of a consultant are very different to being an employee and the transition can be difficult. Advice is to stop being an employee, keep the relationship and wait a few months before you start consulting. It will allow the company to disconnect from seeing you as an employee and reconnect with you as ‘the expert’.
Trade-off #3: Self-employed means self-promotion
Many people in companies prefer not to do self-promotion or networking, so working in a company suits their personality. In many jobs, this is not even a requirement, unless you’re a Relationship Manager or Salesperson. When working for your own company, it’s very important to be visible and out in the market. The phrase ‘out of sight, out of mind’ is a reality.
People might link you to your last role and sometimes other stereotypes could come into play. I have been so many years in a company, that people assumed that I wouldn’t be available to coach or train. Another type of feedback that I receive quite often is “oh, I thought you have gone back to the States” and this is after turning Luxembourgish and living here for over 25 years. The perception of an American is that they will always, at one time, go back to the States. Well, this is not my plan!
I hope these trade-offs will help some of you better grasp what it means to be self-employed or simply realise that you feel comfortable being an employee. Both options have their challenges, but with the right mindset, anyone can be successful whether they are an employee or a business owner. Best wishes to all of you in the middle of making that choice!
She’s also a Committee Member of The NETWORK.