In this article you will know what are the disadvantages of being self employedhow to overcome them, and what are the 4 quadrants of cash flow.
A self-employed person is that person who is in the second quadrant of the flow of money according to Robert Kiyosaki.
According to this personal finance guru and author of several transcendental works for this sector, there are 4 ways to earn money today.
A these shapes are known as cash flow quadrantsa term taken from a 1998 book of the same name.
Despite the fact that this book was published more than 20 years ago and many things have evolved in the financial world, its substance remains intact and is still valid.
If you haven’t read it yet, here’s a quick summary of each of the cash flow quadrants:
What are the cash flow quadrants?
Employee.
Here the majority of the population is found and they are those who work for others in exchange for a salary, which may or may not be enough.
ANDThis quadrant does not distinguish between employees in high-ranking positions in large corporations, nor among low-wage workers.
It is worth mentioning that the quadrants are not exclusive, that is, a person can be in more than one at a time.
self employed.
They are the people who work under a professional practice or trade, exercising it freely. (later you will find the disadvantages of being self-employed and the solutions)
They are free to set their own policies and conditions, prices, work ethic, among other things.
In 1998 they were known as self-employed, today almost 2 decades into the 21st century, we call them freelancers; but it’s basically the same thing.
Businessmen.
The Those who belong to the third quadrant are those who have dared to leave their comfort zone to start their own business.
Though They may not yet have the financial or time freedom that they have among their goals, they are getting close to it.
If at this moment you are thinking of starting a business, but you still haven’t done it because you haven’t finished choosing the type of business in which you want to invest your resources; we present these 5 business models that Gananci recommends to earn money through the Internet.
Investors.
SThey are those who put their money to work for them and have managed to earn passive income. This is why they do not depend exclusively on your time and effort to generate money.
Now that you know very superficially the pillars of the book, we can focus a little more on the second quadrant of the flow of money; specifically on its disadvantages, but not only seeing them from a negative point of view, but also how to overcome them.
5 Disadvantages of being self-employed and how to overcome them.
1. If you don’t work, you don’t eat.
A Self-employed is a person who is completely dependent on himself to earn money and while this has many benefits, this is a disadvantage that cannot be ignored.
This means that if you ever get sick or need to take a few days off, you will not receive income. Which is quite counterproductive for your economy if it was money you were counting on.
With this we do not want to tell you that you run to look for work in a traditional job with vacations and paid rest; but be aware of this so you are not caught off guard and can take steps to prepare.
A personal accident insurance that includes remuneration for labor incapacity can be a viable option for the self-employed; since its price is not too high and it is a good support in case of unforeseen events.
2. Achieving stability is difficult at first.
The Companies can stand out from their competition thanks to their reputation.
The same happens with people who offer their services autonomously; they need to build a solid reputation for their client base to grow.
While this does not happen, it is very likely that stability will be compromised, but as a wise saying goes “you have to eat the green ones and then the ripe ones will come”.
At first it will be quite a challenge, but as you stick with it and not neglect the quality of performance, it will only be sour at first.
3. In many cases they need to work more than people in the other cash flow quadrants.
This It is common, especially at the beginning where they must work for more clients at low prices while building their reputation.
Many people enter the world of freelancing because they want more time freedom.
Although it is true that they get it, since they are the ones who schedule the appointments and accept or not the projects in which they will be involved; It is also a fact that due to this, on many occasions in order to raise the money necessary to pay the bills, the self-employed must work every day of the week and with very few breaks.
So that you do not have to experience this, the recommendation is that you make a work schedule that suits you, with which you feel satisfied, and that you respect; so that you also have space to pay attention to the other aspects of your life.
4. You will need to develop expertise in various areas.
This can be seen as both an advantage. However, also as a disadvantage, due to the pressure that may exist around.
It is not the same to learn something under pressure because you need it now -with the trial and error method- than to do it taking your time.
A freelancer, when working on his own, must know several areas, since he does not have a team that supports him in his practice.
5. You shall deal with irresponsible people in payments.
Many Sometimes it happens that people hire freelancers and then when it’s time to pay the bills, they take a lot of time, or they miss the contracts because they think it’s not something so serious; this is one of the disadvantages of being self employed more frustrating.
This is one of the “most common evils” of freelancers. If you do not want to be another victim of good will, the recommendation is that you have robust policies that guarantee you, at least in a significant percentage; that both parties will comply with what corresponds to them.
Sometimes shyness, lack of self-confidence or even need, make freelancers too flexible in their conditions to work; what creates these problems with clients.
Although no one is completely exempt, having explicit and previously agreed policies will reduce the chances of non-compliance.
Conclusion of the disadvantages of being self-employed.
What we recommend is that your job as self-employed be a transition to become an entrepreneur. In this way you can have a consolidated work team that is a support for your practice.
If you don’t see how your professional practice could become a company or independent business later, but you would still like to start, look at Gananci these examples of profitable businesses in which you can dabble from today and for which you do not need too much budget.
About the Author:
I am Andrés Gananci, an entrepreneur and adventurer passionate about life. I founded my first online business when I was only 17 years old. 12 years later, I’m still traveling the world while working from home.
Publisher of gananci.com
You can also find me at Facebook Y gmail
