Showdown 2: Money

Sunday, March 18th, 2007 at 10:35 am | Small Business

This is part two of a series exploring factors in self-employment and traditional employment. For more about this series, read the opening article.


Money

How much financial compensation you receive



















Self Boss
Pros Cons Pros Cons


  • You control how much and how often you are paid

  • There’s no artificial ceiling to your earnings

  • You can control your rates and pricing, which directly affects the business

  • Distribution bonuses can avoid Social Security tax (for S-Corp)

  • If sales are bad your payroll suffers – so pay may not be what you think it is

  • Overhead usually takes precedence

  • You’ll notice the other 7.65% in Social Security tax

  • Steady paycheck means reliable cashflow

  • Established businesses can offer commensurate pay

  • You’re at odds with your employer about how much to be paid

  • Negotiating for raises

  • You also support everyone else, which means your individual performance may not come back to you

Conclusions

Working for yourself can pay a lot more than working in a traditional setting. If you can meet your bare minimum – what you absolutely need to maintain your lifestyle – you’ll find a lot more satisfaction in your pay. Meanwhile, arguing with your employer about how much you should be making or constantly looking for a new job that pays better is stressful and distracting. Put another way, is there any way your job can make you rich?


Winner: Self-Employment

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One Response to “Showdown 2: Money”

  1. grundyhome.com » Blog Archive » Battle of the Bosses: Self-Employment vs. a Traditional Job Says:
    March 18th, 2007 at 12:45 pm

    [...] Money [...]

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