SELF - Solo Entrepreneur Learning Framework

The landscape of self-employment: starting from fundamentals

Objectives & Goals

At the end of this module, you will be able to:

Understand the landscape of self-employment

Gain a comprehensive understanding of the phenomenon

Explore various types of freelance / self-employment work, common industries for self-employed

Differences between self-employment and traditional employment.

Recognize the benefits and challenges of self-employment and identify the advantages

Such as flexibility, autonomy, and potential for higher earnings, as well as the challenges, such as income instability, lack of benefits, and client management issues.

Develop a mindset for success as a self-employed and cultivate

The entrepreneurial mindset required for self-employment, focusing on self-discipline, motivation, adaptability, and resilience.

Introduction to the concept of self-employment

Self-employment is a rapidly growing segment, boosted in recent year by the booming of “gig economy”. More and more individuals are opting for independent work arrangements that seems better suited to fit their interests both in the sense of professional development, as well as work-life balance.

Self-employed people work, typically, on a project basis, across different clients and industries – and depending of course on their specialization and the kind of offer provided.

The common distinctive factor is that through self-employment people earn an income without being employed in someone else’s firm and organisation.

The activity comes with different degrees of risks, responsibilities and rewards: understanding the fundamentals of self-employment is crucial to understand is this career path is truly viable compared to one’s expectations and ambitions.

Industries where self-employment is thriving

Businesses as well as private citizens often recur to self-employed people and independent professionals to solve specific problem and help them in dealing with specific tasks. Seeking for the advice and action of freelancers and external (independent) professional in very common in:

Professional services (e.g., tax and legal, etc.)
IT services (e.g., graphic design, etc.)
Creative services (e.g., photography, etc.)
Handicraft and labour work services (e.g., plumbing, etc,)

All these works and jobs require all certain levels of specialisation, know how, experience and expertise.

Businesses and organisations heavily rely on the work and activities of external and independent professional – being their use generally more cost-effective rather than employing a new worker or train someone else from within the organisation to perform the same task.

Even normal citizens might have the need to employ a freelancer to deal with specific works: freelancers can decide to tailor their offer and services to the target they prefer to work with and retain full control of the client base that they want to have.

Advantages VS disadvantages of self-employment

PROS

Capacity to decide when to work (and for how long)
Freedom to choose the projects and assignments
Higher job satisfaction (typically)
Potential for higher income (based on efforts invested)
Building of a personal brand
Opportunity to work from anywhere (depending on the case)

CONS

Income instability and uncertainty (i.e., what if things go wrong…)
High fluctuations in income due to varying workload and clients available at any moment
Sense of isolation
High pressure and risks
Greater managerial and organisations responsibilities (self-employed people are responsible for all dimensions of the business)

Pros & Cons: evaluating the path to self-employment

Diving into the evaluation of Pros & Cons

As seen from earlier, there are certain aspects of self-employment that anyone should consider before venturing into this career-pathway.

Self-employment comes with many interesting advantages, but it is not without very challenging risks.

For any “Pros” in fact, there is at least one “Cons” counterbalancing the effect:

“Being your own boss” implies in fact a total responsibility for all aspects of the business, including those that not related to the nature of the service and offer provided (i.e., tax, financial management, legal, etc.).
The sense of autonomy and flexibility that comes with self-employment should be considerate of the intensive efforts that one should make to keep the business up and running (i.e., managing clients and attracting new ones).
Potentials of higher income are very much true, but there is also a very concrete and tangible risk of financial instability.

Flexibility and autonomy

One of the key attractive element of self-employment is the flexibility and autonomy that gives to the person.

Self-employed people are in the position to:

Set their own work-schedule so that it fits and complements their work-life balance expectations.
Decide the work environment, including work location, that best suits their preferences.
Filter the projects and assignments that they want to work on at any given moment – and the kind of clients that they want to work with.

(!) Typical drawbacks comes when people cannot make the most out of the flexibility and autonomy gave to them.

Prioritization and “calendarization” of tasks is essential to avoid:
Overworking
Struggles in meeting important deadlines
Difficulties in managing other transversal part of the business that are instrumental to its financial sustainability

Higher income opportunities

People with very in-demand skills and competences, high expertise profile, and good technical experiences can represent very good candidates for self-employment opportunities.

They can quickly build a loyal customer base and position their offer in the market. This contribute to give great boost to their visibility and overall professional reputation.

Income instability however remains a constant challenge even for established professionals: fluctuations in the market and sudden changes in demand and preferences of clients widen the margins of economic and financial risks.

(!) The most significant different between traditional and self-employment is in fact in the absence of a regular and steady pay-check at the end of every month.

Self-employed people deal most of times with an unpredictable demand curve – specifically in the case if the business is in early stages of development when no solid client base exists yet.

Moreover, when a business is new in the market – despite all the analysis efforts in the best intention – it has no knowledge and experience yet of how that market operates, which represents a risk from a standpoint of revenue streams, and capacity to attract demand.

Work-life balance

The autonomy and flexibility that comes with being “your own boos” is instrumental to favour and guarantee an equilibrate and satisfactory work-life balance.

Indeed, the pleasure of working with clients and customers of own choice, in the format and time windows that best accommodates personal needs, represents the most tangible advantage of self-employment.

(!) On the other hand, a good work-life balance, and the opportunity to enjoy free time whenever needed, requires great work ethic and discipline, solid time management expertise, and great capacity to calendarize and prioritize the items in the work schedule.

The positive effects of self-employment for work-life balance come in when the workers achieves command and control of the boundaries between personal life and work – which is anything but easy…

Burnout is a severe and very concrete risk for people working independently and autonomously on their business.

Reputation, identity and personal branding

The most important resource for people working autonomously and independently on their business is their capacity to inspire trust and sense of reliability.

A robust professional identity is built over time by providing for high-quality services and delivering for solutions the clients and customers perceive of value.

The greater the reputation of the self-employed worker, the greater the capacity of the workers to generate new business (i.e., attract new clients and partnerships), and navigate the market covered by the business.

Self-employed workers based their business on their image and what people says about their business.

(!) Establishing a solid and robust professional identity is key priority for any business of recent foundation and remains top concern at any stage of growth and expansion.

In the same way a positive image as the power to drive and lead a business to success, bad reputation might represent the main cause of its collapse.

Especially in the early stage of business’ life cycle, errors, mistakes and drawbacks might happen frequently due to lack of experience and know how. The important things is that they don’t become lasting scars that would prejudice the capacity of the business to operate in the long run.

Marketing and communication of the offer and service provided

Independent and autonomous workers have the faculty and capacity to market and communicate their offer as they better see fit.

They can price and tailor their services based on their own analysis and estimate, and they can cover the market where they think are best positioned.

Their marketing and communication strategy is tailored based on their needs, and their actual (and realistic) operational capacities. They can use the promotion channels that are best familiar with, and most known to their target audience.

(!) At the same time, marketing and communication efforts can become quite complex and overwhelming for people that are not familiar with this sophisticated discipline.

Some workers might be in fact very good in what they do, but they might light the knowledge and skills needed to promote their offer. Not to mention also that communication and marketing are very:

time-consuming
energy-demanding
budget-absorbing

Diversification of client base and offer

Normally, freelancers, consultants and other contract-based workers work with a multitude of clients and customers from different industries and markets.

This helps them diversify their client base, and most importantly, diversify the market and sector risk.

By working remotely, independent and autonomous worker can also overcome any sort of geographical barriers and conduct their activity regardless of the element of localisation.

Self-employed workers are capable of building a rich client portfolio, expand their business capacity, and extend their set of competences.

(!) When working alone, the diversification of the client base is a long and very consuming process. Independent workers might not have the time, resources and capacities to diversify their offer:

Budget and time constraints

Lack of adequate skills and knowledge to enter new markets

In turn, this reduces the marketability of the business and limit its operational potentials only to one of few distinct areas, hence, to great economic and revenue dependence from a limited market.

Self-employment mindset: cultivating resilience and initiative

Keep motivation high

This might seem obvious in theory, but in practice it is much more challenging and difficult than how it appears…

In the early stage of their business career, people face many failures and challenges that seems insurmountable: drawbacks are intrinsic element of the learning curve of every business.

The difference for independent and autonomous workers, is that they deal with these drawback by themselves with very little or no support available at all…

Celebrating small gains and wins
Seeking for expert advice
Taking time to reflect on errors and what could have been done to avoid them…

…is the attitude that successful business owners put in place to keep things in motion without giving failures to change to break them down.

Adaptability and flexibility to change

The way in which business manages to adapt to changes is measure of the capacity of the business itself to remain operative in the long-run, prosper and growth in a sustainable way.

Markets, competition, technologies, preferences of consumers, etc. alter, shape and shift on a constant basis.

For business and business owners it is fundamental to remain open to changes, embrace the uncertainty, and remain ready to capitalise on every emerging opportunity.

There are several ways in which autonomous and independent workers can help their business remaining profitable, sustainable and competitive:

Learning new skills and remaining informed about trends in their and other markets
See for feedback and opinions by experts, colleagues, etc.
Reassessing on a need basis the strategies in place and how long-term goal aligns to current operational scenarios
Take considerate and calculated risks

Coping with risk and resilience

The element of risk is not alienable from business and work.

With that said, it is important for independent and autonomous workers to cultivate a mentality that helps them in:

facing and understand risk as “ordinary” element of their business and operations
bouncing back from setbacks and errors with maturity, serenity and awareness
making of any difficulty time an opportunity for personal growth and professional development

There is an uncountable number of obstacles, difficulties and challenges that business owners are called to face and overcome – specifically in the early stages of development of their business.

Sense of resilience and awareness in their capacities helps independent and autonomous workers to remain focused and positive.

Practicing self-care and allocating the right time to some leisure and decompressing activities is also very important: this helps people to release pressure on their shoulders, recharge energies, find inspiration and face obstacles with a renewed and fresh perspective.

Self-care and healthy lifestyle

To keep motivation and spirit up, and to avoid that work life consumes and devours personal life, physical and mental well-being, it is necessary for self-employed individuals to keep and maintain and healthy lifestyle.

Business can intense, tiring and consuming, it puts people under great pressure and fatigue.

The more people get tired, the more their tough process becomes more fuzzy and less sharp – which is the exact antithesis of sound and strategic business decisions.

Self-care is important to let the body and mind rest, recharge and go back into full shape.

Since a couple of years now, self-care and well-being became a very recurrent topic of discussion in work and business. Typical recommendations provided by professionals involve:

Do not neglect sleep
Consume healthy food
Make physical exercise
Spare some time for hobbies and leisure activities
Spend quality time with family and friends

Build a support network and engage in meaningful professional relations

The myth of the lone-wolf is long gone…

To thrive and prosper in nowadays complex economy and markets it is necessary for self-employed individual to be surrounded by a vibrant network of professionals.

This is even more true for young aspiring entrepreneurship, which lacks typically experience-based know how, an history of work life and knowledge of certain dynamics that have great impact for the success of their business (i.e., how to negotiate a contract, tax and legal implications of certain investments decisions, etc.)

On one hand, self-employed individuals should try to build professional relations with peers, other small business owners operating in the same market and industry, and business owners operating in their same production chain. This opens up opportunities for commercial and distribution partnership, mutual growth and expansion, outsourcing and reduction of costs and time to market.
On the other, self-employed individuals should get in touch and seek the advice of expert mentors and coaches: people with long-standing experience in business that could provide for very valuable insights on how certain things should be organised and managed (i.e., Human resources, PR, etc.)

Summing up

The landscape of self-employment: starting from fundamentals

In the first unit, we provided for a concise and comprehensive snapshot of what “self-employment” is, differences between traditional forms of employment and why this is such a growing phenomenon in nowadays economies.

Self-employment is the quintessential form of being “your own boss” and gives people to opportunity to arrange independently and autonomously their business.

Pros & Cons: evaluating the path to self-employment

In the second unit, we focused on the Pros and Cons of self-employment so that people can be effectively more informed on what embarking in this professional journey will imply for their personal and professional life.

The Pros are many, as well as the Cons, it is up to each and every individual understand and evaluate in these align with the ambitions and expectations they have for them.

Nurturing the self-employment mindset: cultivating resilience and initiative

In the third unit, we explored the attitudinal traits that aspiring self-employed workers should work on, master and consolidate so that they can run their business smoothly, efficiently and effectively.

Resilience, flexibility to change, adaptability to risk, self care and attitude to learn and improve play all a pivotal role for long-term development as much as the quality of the service provided.