The Dark Side of Being Your Own Boss

by Kevin M on January 9, 2014

in Make More Money,Personal Finance

Being your own boss is probably something most people think about at one time or another. It may even be a natural human desire. If you have a job, you see things that happen at work and imagine how much better it would be if you were the boss. But as exciting as that thought may be, there’s the dark side of being your own boss.

What is that dark side?

Fully Embracing The Concept Of “Chief Cook And Bottle Washer”

When you work for someone else, the workload is typically distributed among several people. Each person has a specialty, but there are usually extra hands available to pitch in when the workload gets a little heavy. And sometimes new employees or even temporary workers can be brought in to help out.

But when you work for yourself, it’s all up to you. This is especially true when you’re first starting out in business. Though the responsibilities seem endless, there simply isn’t enough income to justify hiring others to help carry the load.

As your own boss, you are responsible for everything that happens in your business – from the most minute details right up to the heaviest tasks. You have to generate your product or service, market your business, maintain customer contact and support, fill orders, and handle all of the back office responsibilities that go with self-employment.

Stress Starting Business

If this type of arrangement doesn’t set well with you, you have two choices:

  1. Find someone to partner with in your business so that the workload is shared – without having to pay a salary, or
  2. Learn to love and appreciate being an employee – though it may be tough, at least your responsibilities aren’t unlimited.

An Unlimited Schedule

Speaking of unlimited, one thing you learn early in the self-employment process is that your schedule seems to have no end! That’s not an exaggeration either. If working 40 or 50 hours per week on your job is tough,  imagine working 10 or 12 hours a day, six or seven days per week. That kind of schedule is entirely possible when it comes to being self-employed.

One of the ways the self-employed manage to get all of the work done – without paying someone else to do it for them – is by working an incredible number of hours to complete all work that needs to be done. For example, you might spend the regular workday – Monday through Friday, 9 to 5 – doing the basic functions to keep your business afloat. This can include product production, marketing, dealing with vendors, and making sales calls.

Since you’re so busy during the day, and on weekdays, you might do all the administrative tasks in the evenings or on weekends. Sometimes you may even find yourself doing more substantial work nights and weekends as well, like making sales calls or designing marketing material.

When you’re your own boss, your schedule essentially has no time limit. You work as long as you need to in order to complete the work that needs to be done.

Cash Flow Insecurity

When you work for someone else, you get comfortable with the idea of having a fixed amount of income arriving at predictable intervals. You may be paid weekly, semi-weekly, bi-monthly, or monthly. There may even be predictable bonuses along the way.

But when you’re your own boss, there is no income except what you generate. That means that cash flow is a constant issue. There may be times when plenty of money is coming in, but others when it’s hard to come by. Many businesses are seasonal, and have to make their money when they’re in season to provide for themselves when they’re not.

It’s a juggling act, and you have to be able to create multiple income streams – as well as a decent sized cash cushion – in an attempt to even out your cash flow.

Paying Your Own Income Taxes

This is an issue that most people never think about when becoming self-employed – until it’s time to file their first income tax return. When you work for someone else and you’re on a salary, your employer withholds income taxes for you. Most times you probably get a refund when you file your return.

But not so when you’re self-employed. The only way that your income taxes are withheld is if you make regular income tax estimates. And that has to include a sufficient amount of money to cover federal income taxes, Social Security and Medicare taxes (15.3% of your net income), and state income taxes. There’s nothing automatic about it – you need a rough idea as to how much money you expect to make, and then make estimates accordingly.

No Benefits

With the possible exception of cash flow issues, a lack of benefits is probably the biggest concern for the self-employed. When you work for a company, especially a large one, they will not only provide you with subsidized health insurance, life insurance, disability, and various fringe benefits, but they will often also provide you with the means to save for your retirement.

When you’re self-employed, none of those benefits are available unless you find a way to provide them for yourself. That will mean maintaining a private health insurance policy – which is never easy to get – as well as establishing and funding your own retirement plan.

Ultimately, you can do all these things when you’re self-employed. But it does take extra time, effort, and money to make them happen.

With All The Negatives, Why Would Anyone Want To Be His Or Her Own Boss?

I know what you’re thinking – why would anyone become self-employed facing all those obstacles? The reality is that not everyone can. Unless you are prepared to deal with the issues above and more, you’re probably better off letting someone else be the boss, then sit back, relax and not have to worry about all of this.

But some people are fully prepared to deal with it all, and there are compelling reasons for becoming self-employed that make working with all these obstacles well worth the effort:

  • The potential for unlimited income
  • Not having a boss to answer to
  • A chance to have creative control over your career
  • A more flexible schedule (despite the need to work longer hours)
  • Having more control over your income
  • Having a business to pass on to your children
  • The ability to live in a place where there might not be many jobs – thanks to the internet, many businesses today are completely portable

You have to balance it out. Some people are willing pay the price to gain the benefits of self-employment. But if you aren’t, that’s okay too. Stay where you are, and learn to love your job! Not everyone can or should deal with the many commitments self-employment requires.

photo credit:

Do you ever think about becoming your own boss? Have you given serious consideration to some of these obstacles?

© 2014, Kevin M. All rights reserved.

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{ 2 comments… read them below or add one }

1 Chaz Miller

As someone who has always been self-employed, I can say that you have definitely hit on most of the salient points here! I’d add that having an honest and accurate understanding of what someone’s ‘personality type’ is will go a long way towards revealing what type of self-employment is the best fit – if any.

Good article.


2 Kevin@OutOfYourRut

Hi Chaz – I agree, you have to know what kind of person you are. Some are naturally better suited to be self-employed, others aren’t. One personality trait is being an extrovert. You have to be willing to talk to people, to take chances, to fail, and to bounce back. Resilience is so important. Some people are naturally resilient, others not.


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