Is it profitable to be self-employed in 2019 and beyond? Well that depends. Do you want the short answer or the long answer?
To answer the question, we need to remember that there are different types of self-employment and also that everyone is different. On top of that, self-employment is a little different to holding down a salaried job because you get out what you put into it instead of just getting a flat fee. In other words, if you’re struggling to make ends meet, you can always take on some extra work.
But this is a double-edged sword, because it can lead to self-employed people working ungodly hours just to stay on top of things. It can also be a case of not being able to see the woods for the trees, as people get so engrossed in impending deadlines that they fail to realise that they’re working 70 hour weeks and only just paying their bills.
Defining profitability
Technically speaking, self-employment is profitable as long as your income is higher than your expenditure. You could be profitable while only making enough each month to buy a cup of coffee. Becoming profitable is easy; the hard part is being profitable enough to be able to make a good living.
For the purposes of this article, then, we’ll define self-employment as profitable if the money that you make allows you to pay for all of your vital expenses (such as tax, rent, food, fuel, etc.) without requiring you to work more than 40 hours a week to be in profit. There will always be weeks where you have to work a little overtime, and that’s to be expected. The problem occurs if you have to rely on that overtime to make ends meet.
With this definition of profitability in hand, the tangible becomes much more tangible. After all, that’s really what it all boils down to. Even if you start out by seeing self-employment as a way to make a little extra cash while working a full-time job, the chances are that you hope to eventually grow it to become your primary source of income.
Is it possible to be profitable?
Now that we have our definition of profitability, the next step is to determine if it’s even possible. The key here is in the choice of words. It’s possible to be profitable, but is it likely? The numbers seem to suggest good news, with the number of self-employed workers in the UK rising from 3.3 million to 4.8 million between 2001 and 2017.
In my case, I became a freelance writer offering everything from copywriting and blogging to custom essay writing help for companies like UK Essay On Time. I made the switch after several years of full-time employment at a marketing agency. That experience made it much easier for me to navigate the freelance landscape and to build longer term relationships. This in turn helps to make sure that I’m not just profitable this month but that I’ll continue to have money coming in during the months and years to come.
This long-term focus on profitability is important, because it’s all well and good making a profit for a couple of months but if you can’t keep it up then you’ll soon start running into problems. That’s why being profitable in the sense of being able to cover your expenditures and your living costs isn’t really enough. You need to make money on top of that so that you can put it away for a rainy day.
The bottom line
Ultimately, everybody is different, and while some find self-employment comes naturally and that it’s easy to keep an eye on the numbers, others are underprepared and overwhelmed and struggle to stay on top of things.
Part of this comes from the optimistic but naïve view that self-employment will allow you to spend more time doing what you love. If anything, the opposite is often true, because there are huge amounts of admin to do that can take you away from why you went self-employed in the first place. And while you might not have to worry about pesky bosses and line managers, you can find yourself with the roles reversed, having to deal with hiring and firing and human resources.
On top of that, it can be hard to determine profitability because many businesses knowingly start out by running at a loss in the knowledge that they’ll eventually become profitable. It all comes down to knowing yourself and your business and understanding how its finances relate back to what you want to achieve. If you keep an eye on them and take steps to actively manage them, you’ll do just fine. Good luck.
