1. Risk of failure. Most new businesses fail in their first years. When you are self-employed, it is your own money or money that you have borrowed at risk. Having your own business increases the problems associated with failure.
2. Your decisions can be wrong. There will be no one to bail you out from your mistakes. And as a general rule, you cannot move forward without some mistakes. The big question is, can you learn from your errors and be adaptable?
3. Owning your own business can require a sacrifice of your personal life, you may need to work long, long hours, you may need to work on weekends, and you may not have a vacation for several years.
4. Your income stream may fluctuate throughout the year. You may have very little to live on during the early times.
5. Your health insurance and pension costs are not included automatically. When comparing self-employment income to a job, you need to remember the employee benefits that are associated with employment such as health insurance or perhaps a pension contribution to a 401(k) are not automatically included. You will have to meet these needs from your income.
6. Strict record keeping and attention to detail are very important. You will have the ultimate responsibility for such things as the required licenses, sales tax returns, employment and unemployment taxes returns, payroll information, and income tax returns. The details that are recorded on these documents will need to come from your record keeping system.
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