Self-employment can be a rewarding way to earn an income while enjoying greater flexibility. If you want to take complete ownership of your work and time, it is best to be self employed. To successfully become such a professional, you will need to understand why this work structure is beneficial and how it can advance your career. In this article, we will discuss what is self employed, understand the benefits of self-employment and explore 30 ideas that allow you to work for yourself.
What is self employed?
A self employed professional is someone who runs an independent business and offers their services to different clients. Such a professional can either own a business, work as an independent contractor or perform freelance work. For example, a freelance copywriter is a self employed professional because they can work with different companies simultaneously but are not the employees of those companies.
How do I know if I am self employed?
You are self employed when you do not have a fixed income or salary from an organisation. You either sell your services to other businesses without a long-term contract or engage in business trade, commerce, manufacturing or related activities. Also, according to the Income Tax Act, 1961, an individual who pursues a vocation in which they specialise are self employed individuals. Some examples of such professionals include doctors, authors, lawyers, architects, lawyers, auditors, designers, astrologers and sculptors.
What is self-employment income?
Self-employment income is the money you earn by doing business as a sole proprietor or independent contractor or by working as a freelancer. You may have self-employment income from a profession, business or commission. This includes any income you receive from carrying out activities for profit or with a reasonable expectation of profit.
Benefits of self-employment
Self-employment provides many benefits like:
- Offers flexible schedules: Self employed professionals can create their schedule and decide when and how much to work. This is great for someone who does not prefer working in a 9-to-5 atmosphere. For example, a freelance writer can work three hours in the morning and four hours in the night instead of continuously working for seven hours a day.
- Allows creative freedom: Working for yourself provides you with an opportunity to be creative. You can set your own business terms and shape the business components as you want. For example, when starting a child care service, you can design the daycare centre as you like and market it in your preferred way.
- Expands your skill set**:** When just starting a business, you have to take care of the marketing, customer acquisition, finances, business operations and even taxes. You may already have more than one of these skills, but when you are self employed, you learn about different processes and business aspects. This can increase your skill set.
- Ensures job security: in traditional employment, your job may become obsolete due to a change in technology or the company closing one of its business verticals. When you work for yourself, you have a job as long as your company is in business.
- Increases earning potential: Your earning potential depends on the initiatives you take. Unlike traditional employment where you get a fixed salary, there is no limit on how much you can earn as a self employed professional. The more you work and put in efforts, the more you can earn.
- Supports your goal: It allows you to build a business around your vision and achieve your goals. For example, if protecting the environment while running a business is important to you, you can incorporate eco-friendly practices in your business.
- Builds professional network: In a traditional office environment, you have to work with a team of people every day. But self-employment allows you to connect and collaborate with business owners, managers and other business stakeholders. For example, a virtual assistant may directly work with the C-level executives of a company.
- Provides tax benefits: There are many tax write-offs and benefits for self employed professionals.
Areas of self-employment
You can become self employed in the following areas:
Trading involves buying and selling of services and goods. With a small investment, you can start a trading business. Local grocery or stationery shops, garment, sanitary, furniture, spice and hardware trading are a few options to consider. For those who have high risk-taking abilities and can make a substantial investment, a wholesale trading business may be an appropriate choice. You can even take up a franchise or buy an agency.
Manufacturing involves the production of goods. It can include producing bakery items, manufacturing bricks, making handmade candles, soaps and chocolates, manufacturing paper, producing coconut oil, manufacturing incense sticks and making automobile parts. All these self-employment areas require minimal investment and basic equipment to start.
Jobs that require training and special skills in a specific field can provide excellent self-employment opportunities. Professions like doctors, lawyers, auditors, accountants, architects and journalist fall into this category. To become self employed as a professional, you may require specific qualifications. For example, a financial accountant requires a B.Com degree or any other finance-related degree. They should also have knowledge of accounting principles and expertise in accounting software.
Haircutting, fashion designing, wedding photography, interior decoration and motor repairing are some business activities that offer individualised services to customers. Their services vary from customer to customer. For example, an interior designer may design two different kitchen floor plans for two different clients. This area of self-employment depends on the personal skills of the individual.
Types of self-employment
Here are a few types of self employed people and the work they do:
A freelancer is a skilled professional who offers their services to clients on a contract basis. Often, freelance work offers flexibility that allows freelancers to work on several projects with multiple clients. But certain freelance contracts can restrict who else they can work with until the completion of a project. As they work with multiple clients, it helps in increasing their income and building new connections.
Also, freelancers usually earn money on a per-job basis. They either charge by the hour or set a fixed price for the job they do. In many cases, freelancers can work from home and get the flexibility to choose a convenient work schedule.
A sole proprietorship is a form of business managed by a single person. It is usually not a legal entity because registration of the business is optional. Furthermore, a single proprietor manages the control, decision-making and investment of the business. This person bears all the losses and enjoys the profit the business makes. Since there is no specific law governing it, the business faces lesser compliance issues.
However, based on the type of your sole proprietorship and annual turnover, you may have to apply for a specific licence to continue your business. You can always check the government guidelines to know more about the licensing requirements to avoid any surprises that may pop up when you start your sole proprietorship firm.
Independent contractors are similar to freelancers. While freelancers work on a contract basis, contractors work on a contractual basis. This means that a contractor signs a contract with a single company and work solely for them for a specified period. The time frame of the employment can be a few days or months. However, the client enjoys all the power and decides the outcome of the project. For example, a company may hire a social media strategist for four months to complete an upcoming marketing campaign for their client.
An independent contractor can be a company or individual providing a particular service to the company without being under the company’s obligation as an employee. Interestingly, an Independent Contractor Agreement is necessary for a company or individual to work with any company.
What are examples of self-employment?
If you are looking for a way to become self employed, here are 30 ideas for self-employment to choose from:
- Freelance writing and copywriting
- Graphic designing
- Online teaching/tutoring
- Child care service
- Delivery service
- Event or party planning
- Stock trading
- Life coaching
- Interior designing
- Food catering
- Mobile app development
- Digital marketing
- Candle making
- Travel experience curator
- Pet daycare
- Repairing home electronics
- Virtual assistant
- Web designing
- Reselling on e-commerce websites
- Personal and local business consulting
- Online news correspondent
- Real estate agents and brokers