Right now, you probably have a business idea you would just love to try out. Go ahead – admit it – nearly everyone has an idea like this floating around somewhere in their brains. What stops you from trying it? Maybe it’s a lack of motivation – you simply don’t have sufficient reasons to start your own business.
That’s where we can help. Here are seven reasons to start your own business. If one or more appeal to you, maybe this will be the catalyst that you have been looking for that will start you on your way to being self-employed.
Potential for higher income
Getting a raise or a promotion isn’t as easy as it used to be. Most employers have adopted cost-cutting fever, and it’s falling heavily on their employees. There is no reason to expect this trend to change anytime in the near future. If you’re going to increase your income, it will be up to you to make it happen.
You could try to accomplish this by changing jobs and moving up the pay scale. But most likely, it will just be a question of time before you’ll hit the income ceiling on that job as well. And like raises and promotions, new jobs aren’t that easy to find any more either.
Being self-employed has no income ceiling! You can make as much money as you are able to based on your efforts, motivation and skills. Part of what stops people from realizing the extent of this benefit is the fear that it doesn’t happen immediately. Yes, it will probably take several years before you’ll get your income up to where it is on your job, but once it does, the sky will be the limit.
Spreading your career wings
When you’re self-employed, you can take your business and go in virtually any direction you want to go. That will enable you to do work that you actually like to do, and to take on business lines that you’re actually interested in. By having the ability to define your work and your environment, there will be greater opportunity for both your business and your income to flourish.
Greater control over your life
Having your own business isn’t exactly a walk in the park. But it does offer the opportunity to get greater control over your life. This happens for the following reasons:
- You aren’t locked into working for a single employer.
- You can choose the type of work you do, and the clients you will work with.
- Though you often work more hours when you’re self-employed, you’re not necessarily constrained by the conventional business schedule of Monday-through-Friday, 8:00 to 5:00.
- Though you will have to serve the needs of your customers and clients, you will not have a boss in the traditional sense.
- Depending on the type of business you’re in, you may be able to completely avoid out of town travel.
- You will have greater control over your income and the types of retirement plans that you contribute to.
- Once your business is established, time off will no longer be limited to sick days, holidays and vacation time.
With that kind of flexibility, you’ll be able to create and occupy the professional niche of your choosing – one that works better with your lifestyle and personal plans.
Easier blending of your business and personal lives
It’s hardly a secret that many people become self-employed in order to have more time to care for their children and to be with family. For the most part, typical employment situations don’t provide the kind of flexibility that is needed when it comes to childcare or even a less restricted lifestyle.
If you are self-employed, and especially if it is a work-at-home business, you can pretty much work around whatever personal situation you have. Though it’s not easy to run a business and care for children same time, it is doable and over time it really does get easier too. But employers, by contrast, are not at all sympathetic with an employee’s desire to achieve that kind of blend.
Major tax advantages
Being self-employed gives you an opportunity to write off expenses in a way that an employee can’t. For example, you can write off common expenses, such as telephone, Internet, auto expenses, and even a portion of your house or apartment. In addition, while an employee will have to reduce job-related business expenses by 2% of adjusted gross income, you can take your expenses right off the top if you’re self-employed.
Another big tax advantage to the self-employed is retirement plans. A typical employer-sponsored 401(k) plan might limit you to contributing no more than 10% of your annual income to the plan. If you’re self-employed, you can contribute 20% through your own SEP-IRA plan. Another retirement plan option for self-employed individuals is a Solo 401(k) plan, which offers a similar ability to make large employer matching contributions on top of your individual contributions. Those additional tax write-offs can have a large effect on your annual taxes, and help you prepare for retirement.
No chance of getting laid off
In nearly every job that exists today there is a significant chance of being laid off. While you can lose clients and income as an entrepreneur, it is very unlikely that your income will come to a complete stop. And when you do lose business, there’s always the potential to replace it with new business – even if it is income from unrelated sources.
Now that job security is no longer a given in the workplace, self-employment is looking more secure all the time.
Getting a windfall rather than a gold watch
A major advantage that a self-employed person has that an employee never does is the potential to sell your business and reap a substantial windfall. If you do this just prior retirement, it could provide the retirement life of your dreams. This is especially true if it is combined with a generously funded retirement plan.
A well run small business can provide its owner with a much more comfortable retirement than an employer-sponsored 401(k) plan can. In addition, the ability to sell your business for large amount of money also opens up the possibility of early retirement.
So there you have it – seven reasons to start your own business. What are you waiting for?