‘If I were boss…I’d pay myself’ more was the headline of an article in Metro sharing research revealing that 70% of people dream of being their own boss so they can raise their pay.
Once I stopped chortling, I went to fact-check just to make sure my cynical laughter was justified.
It was.
‘Median monthly earnings are lower among the solo self-employed than among employees: £1,179 compared with £1,651 in 2018–19. The gap has widened over time, from 21% lower in 2002–03 to 29% lower in 2018–19.’
(Source: Freelance informer)
‘Three years after starting their own businesses, people who went into solo self-employment after a period of unemployment report earning nearly 30 per cent – or £500 less – per month on average. That gap has gone up from 21 per cent in 2002-2003.’
(Source: Smallbusiness.co.uk)
And I know from my own experience this is true – I earn around a third less than I did in my last full-time job even after seven years of running my own business.
I also don’t get paid holidays, sickness or pension payments.
To add more gloom into the mix, the stats on the long-term success rates of businesses remain sobering:
‘Approximately, 20% of all businesses fail within the first year while 60% go bankrupt within the first three years.’
(Source: Cybercrew.co.uk)
Around 40% of businesses fail because there is no market for their products and nearly 30% fail due to lack of money.
For every seemingly overnight Steven Bartlett success or Instagram/TikTok influencer raking in millions, thousands upon thousands of solopreneurs struggle.
You will also need to work your socks off to get your business off the ground, so don’t be thinking you’ll be starting your new business and wafting in and out to do a few hours a week whilst your bank balance accelerates.
I’ve said it often before and I’ll keep on saying it – starting and running your own business is bloody hard work.
I’ve worked hard and suffered financial hardship over the years and there have been times when I thought I would throw it all in.
So, why do I still run my own business? I have the flexibility of hours and I (largely) choose how and with whom I work. These are important reasons for me. I have obligations outside work and being able to fit them in around my working week without having to check in or ask permission is priceless. Somedays I’ll only work a couple of hours, others I’ll work 12. But that suits me – I don’t need to clock in, nor am I expected to be at my desk from 9-5. As long as I deliver, that’s what counts.
Please don’t get me wrong, you can create a thriving business that pays you well and gives you the lifestyle you want – I know lots of business owners who are doing very well and kicking business arse! I simply wish to manage expectations that giving up work to set up in business requires thought, planning, a lot of resilience and the knowledge it’s a long game.
Before handing in your notice:
- Research your market and test your products or services.
- Make sure you have enough money to run your business and home life for at least a year.
- Learn about what’s involved in running a business and what skills you need.
- Create a plan outlining your business and what you can realistically hope to generate in sales.
- Make sure you’re ready to sell and keep selling.
- Make sure you’re supported in your decision – it will be tough if significant others don’t agree with you.
- Be realistic about what you’re doing and why you’re doing it.
If all the stars align – go for it! But if you’re hoping that running your own business is the route to better pay, you may want to think again…