So You Want to be Self-Employed?

Ah, yes. To be self-employed is the dream of just about every unemployed person. Take it from me, honey; it's more work than a real job. And it won't make you rich.

Oh, I’ve read those accounts by so-called successful consultants who brag about how they work part-time and make more money than they did when they worked for someone else. What they don’t tell you is that only part of the time they work is BILLABLE. The rest of the time that is spent marketing, keeping records, sending out invoices and everything else a self-employed person has to do is UNPAID.

Sure, you can charge $100 an hour for your time, but you’ll be lucky to bill 1000 hours a year. And don’t forget you’ll have to pay EXPENSES: marketing, insurance (health and business liability), office equipment and supplies, phone bills, travel and so on. It is called the price of doing business.

Of course, you have to pay TAXES on your net earnings to the federal government, the state government and sometimes even the city where you live and do business. Figure that you'll pay up to 50% of your NET earnings in taxes. The federal government will take pay self-employment tax for social security and Medicare. Think you'll see much of that money when you retire? Don't bet on it.

And don't even think of hiring employees. In addition to their wages, you'll have to pay a portion of their social security and Medicare taxes plus workers compensation and unemployment insurance.

So before you get your business cards and brochures printed, be sure you have a product or service that people will want to buy AND will want to buy from YOU.

Not discouraged yet? Good. For my next posting, I'm going to write about the BENEFITS of self-employment.