While self-employment and freelancing offer a ton of career benefits, there are also some drawbacks too. As you embark on your freelance career (or figure out your best path if you’re already in the lifestyle!), keep these in mind:
Lack Of Steady Income
If your clients have reduced cashflow, or you’re having trouble attracting new clients, you’re at increased risk of financial trouble. Plan in advance, make sure your clients pay their invoices on time, and save money for those lean months where income isn’t coming through as much as you would like.
You Can’t Bill Every Hour
Freelancers and the self-employed do a lot of unpaid work. You’re not compensated for the hours spent doing paperwork, chasing after new clients, advertising or promoting your business, or managing the myriad other aspects of operating your organization. Remember that you’re not just an artist or a writer or a limo driver or a consultant; you’re a business person responsible for paying bills and keeping accurate books.
No Employer Benefits
While Obamacare and the Affordable Care Act have made it much easier for freelancers and the self-employed to afford health insurance, 1099 employees can’t count on benefits from their employers. Budget for health insurance and especially for vacation time when you won’t be working.
What other disadvantages have you encountered working as a freelancer or a self-employed businessperson?