Tradesmen startup or working for a boss- which is better? Is being a self-employed tradie better than working for someone? Is it better to be a self-employed tradie or work for a company?
As a tradesman with a passion for the job, you may be wondering if you should start out on your own or find employment in an established firm.
Many tradesmen also venture out on their own after gaining some exposure as employees in a large firm.
Either way, before you take the plunge, you should be aware of the pros and cons of either option. Here is what you need to know.
Self-employed or working for a wage: Pros and Cons
The earnings question
Very often, tradies wish to venture out on their own if they feel that they are not being paid enough by their employers. As a salaried employee, you can only take home a fixed pay while your boss gets the profits.
If you think that you are not being paid what you deserve, starting up your own business may be a good move. But do remember that if the firm makes a loss, it’s your boss who bears that too, not you, as long as you are employed.
Who’s the boss
A surprising number of people are miserable at their jobs because they cannot get along with their boss.
If your boss is making life tough for you or if you just don’t like being under someone’s ‘thumb’, then setting up your own company is smart.
But as a self-employed tradesman, the bucks stops with you and you have to drive the business forward on your own.
The immense responsibility
As a sole owner, the entire responsibility of the business is yours. You absorb losses, the costs are yours to pay, you have to file taxes, you ensure your employees are happy, you are in charge of office space/ costs and also subcontractors.
That’s a lot of responsibility that you can happily leave to others if you are just drawing a wage. However, you also get to take the business in a direction of your choice, which you cannot do as a wage earner.
How much work you take up is also entirely up to you if you are self-employed.
Where you work out of, home or office, how many hours you work- these are in your hands when you are self-employed. Your boss can’t make you work late or usurp your family time.
You can stay home and take care of the family while you work. Or you can work half days or a few days of the week so your spouse can also pursue their career. As an employee, you do not have this flexibility.
Is there a specific line of work that you have skills for and would like to explore? Do you want to study more or get more hands-on experience in one area of your work?
Would you like to take a risk and start something new within the industry? Chances are you cannot do any of this as an employee of a firm. However, as your own boss, you can do literally anything you set your mind to.
However, it is all on you to make a success out of it because you take a wrong step and your business suffers. You don’t have a ready-made system backing you up.
A critical first step if you decide to be self-employed
As a self-employed tradesman, you should be aware that protecting your business against risks is your first priority. You do this by taking out the right kind of insurance for tradies.
Apart from the general tradie insurance plans, you take for protecting your business assets, you should also invest in coverage to protect yourself against claims by third parties.
You and your team face situations where you are exposed to clients as well as the general public on a daily basis. If a situation arises where someone is injured owing to your equipment or you accidentally cause some injury, then you could face a lawsuit.
The same could happen if your work or your negligence causes some kind of monetary damage to a third party.
The claim made by the affected party need not be accurate. However, you can only prove this if you go to court and battle it out. For most self-employed tradesmen, the massive costs of court proceedings are a deterrent from fighting lawsuits in the appropriate way.
That means you simply stay mute while your reputation is tarnished. A good public liability tradie insurance cover solves this problem by covering all of the costs of court proceedings and damages.
There are pros and cons to being self-employed as well as for working under someone in a firm. Think these through before you take any decision. If self-employment is the way you wish to go, then do get the right kind of insurance cover for your business.
This includes a public liability insurance plan along with other appropriate tradie insurance plans that keep your business risk well within control.