- Personal Finance»
- Income & Making Money
What Are The Disadvantages Of Working From Home?
Thinking of working from home can be very exciting and it becomes easy to forget that there may also be some disadvantages to it as well, so here are some of them for you to consider and if they don’t put you off then you know you truly are ready to give self employment a go no matter what it takes.
There is no set wage at the end of the month like in a regular 9-5pm job and you are solely responsible for ensuring you make enough money to meet the needs of your business, your self and your family.
You will also be responsible for finding your start up funds and paying the money back. You may also need to open up a business bank account.
Doing your own paperwork
It will be up to you to carry out all necessary paper work including the possibility of contacting the housing department for planning permission.
If you need to apply for a loan towards your start up funds then you may need to type up your own business plan to help you keep your costs down.
Responsible for doing your own Tax and VAT
It can be quite a daunting thought for many people knowing that they have to take care of paying their own taxes as when they first leave a job it’s automatically paid for them. Not only that but you will also have to do your own book keeping and accounts unless you can afford to hire someone else to do them for you. You will need to make sure that you can work out your business expenses and tax deductions so that you don’t end up paying over the odds. You may also need to register to pay VAT as well.
You will need several different types of insurance such as public liability insurance, business insurance and more expensive insurance on your car if you are using it for work.
You may also find that your health insurance will be a bit more costly as well.
No paid time off work
Unless you are earning a passive income then you won’t get sick pay, holiday pay or maternity leave and you are unlikely to get compensation if you have a work related accident in your home.
With more responsibilities comes more stress. You become the one who people look to when something goes wrong. Plus if you are planning to hire employees then you are responsible for them too.
Work longer hours
You may find you have to work longer hours to bring in enough income or too meet the needs of clients. This would ultimately lead to less time for your self, your family and friends.
Less job security
There is a lot of redundancies going on at the moment but if you are fortunate enough to already have a job that you are guaranteed to not lose then going self employed could mean you having less job security as you are going to be the one that has to fend for your self and find your own work, even at times when there may not be much work around.
There is no pension plan when you are self employed so it will be up to you to set aside money for your retirement, as will be deciding where is best to save it, either in investments or a bank account.
Needing to learn new skills
There will always be more things that you need to learn in order for you to keep growing your business. You may have to learn these skills or do certain tasks whether you particularly want to or not.
Difficult getting friends to believe you are actually working
I don’t know why but most people seem to think that if you work from home then you don’t actually have to do any work at all and will be tempted to still ring you for an hour at a time or insist on spending the day sipping cups of tea with you, so you may have to be tough with your friends and family and politely tell them 'sorry but I’m working'. You might be your own boss but if you don’t get any work done then you won’t get any income either.