You might have been thinking about leaving your full-time job to pursue self-employment, freelancing, or entrepreneurship. All of these options allow you more flexibility and autonomy over your work, along with the possibility of increased earnings, which is very alluring. There are however a lot of challenges that most people will face when leaving the comfort of their full-time job.
Here are 5 things to consider before you make the leap:
1. Income & Benefits
The most obvious perk of having a full-time job is the compensation package, which generally includes a fixed salary, and in certain jobs performance bonuses or commissions, and stock options. Even in the case that you get paid minimum wage, the amount you make working full time in the majority of developed countries would in general enable you to live at least a decent single life (although in some cities where the housing market has gone crazy, this may mean sharing an apartment with someone else).
Once you leave your employer and try to make money ‘on your own’, you will be faced with a totally different reality. Instead of getting a paycheck every two weeks or every month, your income may highly fluctuate, stagnate or in some periods even be non-existent. There will be times when wonder if you will make enough money in a particular month to make ends meet.
There are cases where you will face less of a challenge. This includes if you are already at an advanced stage with your new occupation, meaning that while working full time you had already built up your new income source in parallel. The other case is if you have investments that generate a steady and relatively safe stream of passive income.
2. Health Insurance
Most full-time jobs, even the most crappy ones, offer some kind of health insurance. Once you’ve left your full-time job, you will need to shop for health insurance on your own, and you’ll find out that it is not easy to get a good but cheap policy which includes dental and optical coverage. Not to mention the headache of having to research and compare all the different options to get the most suitable one for your needs.
If you have a spouse who is still working, then you might be covered under his or her plan. But if this is not the case, you might need to buy insurance for your whole family, if you have one. Be especially careful if you have any serious health conditions. If you decide to switch to a different insurance provider, a pre-existing condition may or may not be covered.
Our routines are usually built around things in our lives that are fixed. In a full-time job, the working hours are more or less given. Even though there are many jobs nowadays that offer flexible hours, there are core working hours and meeting schedules that employees must follow. So if your working hours are from 9 am – 5 pm, you would schedule your private life around those hours. Meaning that you would typically wake up around 6 am – 8 am and go to sleep around midnight. Then you would squeeze anything else you need and want to do into the remaining time.
This provides structure, as everything in your life needs to be adapted to the time restrictions of your job.
Building a schedule mostly becomes a problem when you leave your job, without having anything else prepared.
When you leave your old schedule and go into a vacuum where you build things from the ground up, things can become chaotic.
If you own a physical business with a store or office with fixed opening hours and employees, you will have less of a problem, as these opening hours will serve as an anchor around which you build your life. Also, if your freelancing work is at an advanced stage, meaning you already have a steady stream of work and gigs by the time you left your full-time job, you will find it much easier. You will have enough commitments that serve as an anchor for the rest of your schedule.
When you are working for yourself and by yourself, suddenly you are free to draw up your own schedule. It may be challenging at first to find a schedule that works for you. Theoretically, you could implement any schedule you like. You could work from 11 am to 7 pm, and benefit from this flexibility by taking care of your kids or pets, or do your hobbies in the mornings. If you’re single and you’re a hustler, you could work from 5 am to 12 am, and risk overworking yourself, as no one sets any external boundaries. But if you are less motivated, you could also easily drift into a schedule with just 2 working hours every day, or arbitrarily change your schedule each day.
If by nature you are very organized and disciplined, you may not find it hard at all to build a schedule. On the contrary, with all this newly found time you’ll be able to set up a very efficient schedule.
However, if you are someone who has struggled with staying on a schedule even when you were given one, then you will likely find it even more challenging to set up and stick to your own.
4. Motivation and Productivity
I would not say that people who work by and for themselves are less motivated and productive. In fact, the opposite is often the case. Doing something you love is likely to increase your motivation and productivity.
What changes however is the source of motivation and the driver for productivity.
When working for an employer, there are all sorts of external motivators and reasons for maintaining productivity. Being self-motivated and wanting to be successful in the workplace is just one of them. The main pull usually comes from the demands of the workplace. The expectations of your boss, the targets and company goals. The effect that your colleagues can have on motivation and productivity cannot be underestimated either. Seeing other people working hard – or pretending to work hard – toward the same goal can be motivating. Most people don’t want to fall short. Although not all people are high-achievers, no one wants to be known as an underperformer. It is like an invisible mechanism that keeps a company running.
Once you leave the company, it is mainly you who provides the source of motivation to yourself. Your peers whose achievements you’ve been comparing your own with are not constantly in your face anymore. Now at best you compare your progress to other self-employed people or business owners you read about on the internet.
At an established company, there are many mechanisms that keep the productivity of employees in checks – whether all of them are effective or not is a different thing. There is your supervisor or your boss who checks on you, or if you’re more senior then there is a board or the CEO you have to report to. If you are working in a project team, then some colleagues need you to fulfill your part of the job so they can do theirs.
Once you are not part of this system anymore, you need to fulfill all these functions by yourself. You need to check on and demand things from yourself. You need to report to yourself and constantly push yourself harder.
It is challenging to judge your own work and progress objectively.
You don’t have access to an ‘objective’ reviewer anymore. You initially run the increased risk of either over evaluating or under evaluating your work.
It will take time to calibrate your own scale so you can assess your progress relatively fairly, and figure out a system where you wear multiple hats. But once you’ve nailed it, you may just become more motivated and productive than before.
5. Social network
Working full time, we spend 35-50 hours a week with our colleagues. That’s quite intense, and therefore it’s not surprising that many friendships are formed at work. If ‘friendship’ is a bit of a stretch, then at least we can say that a lot of our social life happens at work. Conversations, lunches, office parties, and so on.
When you leave your job and do something on your own, then you may miss having colleagues around. As annoying as one or the other colleagues can get, it can be quite amusing to have a bunch of people around every day who you can chat with about the latest news or laugh with together at some joke sent around via internal email.
As a solo employee working for yourself it can get lonely. You can get your dose of social interaction from working with clients, suppliers, and your real friends outside of work, of course. But it can be hard to expand that circle of acquaintances if you don’t actively work on it. If by nature you are a very active and social person, this might not be a problem for you. You may be inclined to seek out new people by joining workshops, conferences, and other events, and even manage to get to know more interesting people.
For more introverted people, it may be the opposite. Many introverts thrive on working alone and enjoy the new set up which allows them to become more reclusive. If they don’t actively try to maintain a social network, then one day they might be surprised to find that they don’t have any social life. And by social life, I don’t mean interactions on social media, but interactions and relationships with real people.
How well you will cope with each of these challenges depends a lot on your particular personality, and to what extent you can adapt and plan to counteract any of the negative effects. Make sure to consider each of these points before making your final decision. If you found a solution, a strategy for each of these challenges you are likely to encounter, then you are off to a great start.