“No one ever got rich working for somebody else”
About two and a half years ago, I made the decision to become self employed.
Leaving a very stable job in a relatively small but successful family run company is not a decision I made lightly, but after working there for five years I had learnt one important thing.
There would always be a limit to how much I could earn at this company, no matter how much work I put in or extra skills I took on.
The reason for this is simple – If you are employed by somebody else you will ultimately be earning them more money than you are earning for yourself. Think about it; the job you’re currently working in pays you a certain amount of money each year. If a company pays you say £15,000 per year and the work you have carried out in that year has made the company £10,000 they have employed you for a year at a loss of £5000. This of course makes no business sense whatsoever. Therefore if you are working for someone else right now, I can safely say you are earning them more money each year than they are paying you. A simple enough concept to get your head around, but has this thought crossed your mind before today? This idea should spark the next important question in your mind.
‘Can I do my current job in a self employed capacity instead of making all this money for someone else?’
Of course the answer to this question is yes, the hard part however is letting go of that stable position you’re holding in order to go-it-alone. I think a general misconception is that it is very difficult to set up for yourself, however I believe this to be largely untrue, especially if you have a marketable set of skills that can help you supply a demand.
Initially I was perfectly content staying in my job earning an average wage and working for someone else until the time my dad approached me with an offer I would have been silly to refuse. He had been self employed for about 13 years within the training industry, running training courses with a decent amount of success and wanted me to become self employed so he could train me up to take over the business. I had realised sometime before that no matter how much I tried to further myself in the company I was working for, all of the top jobs paying the big bucks were held by members of the same family who owned the company. The simple fact is that regardless who you work for there will always be a reason for you hitting this salary cap, and as a result the only way around this is to become self employed. This notion further encouraged my decision to accept my dad’s offer and become my own boss which of course I did and haven’t looked back since.
Becoming self employed is a huge ongoing learning curve for me. The more I learn the more I realise how much financial sense it makes to work for yourself. This in turn has made me want to branch out into other businesses and become more entrepreneurial in my way of thinking. I realise that not everyone is in the same position I was in, having the opportunity to take over their dad’s business, but then again you may have a set of skills that someone like me doesn’t possess.
So, should you become self employed?
Well, a wiser man than I once said “No one ever got rich working for somebody else”.