What motivates (or blocks) people from self-employment?
The lure of self-employment tempts most people at one time or another.
And the appeal is clear: self-employment offers self-direction, increased earning potential, liberty, self-expression – not to mention a chance to escape bad bosses, horrible colleagues, and toxic workplaces.
What were the forces pushing you to consider self-employment? Were you motivated more by the appeal of what you could gain by forging your own career, or by the appeal of what you could leave behind? And if you haven’t yet made the leap into self-employment, what’s holding you back? Do you have a career you’ve invested in, or a team you love?
We surveyed 1,000 UK respondents to discover the main motivations and deterrents to becoming self-employed. To get an overall view, self-employed respondents were asked what their motivations for going self-employed were, and why they didn’t become self-employed sooner. Employed respondents were asked what was stopping them from becoming self-employed themselves.
Reviewing how hundreds of different people feel about self-employment may help you identify and examine your own motivations and concerns, and potentially take another step towards your goals. Let’s dive into the data, and also explore how these factors vary by gender.
Table of contents
- Motivations of becoming self-employed
- How do motivations differ by gender?
- Deterrents of becoming self-employed
- How do deterrents differ by gender?
- How to overcome barriers to self-employment
- In Summary
Motivations of becoming self-employed
We all want to be free to choose a life that makes sense for us and our families. That’s the big picture that we can take from this survey data.
We can interpret the top 4 motivations as all speaking to this need to be free (flexibility, independence, control of time, work/life balance), then it’s clear that freedom is a huge driver for people leaving behind the world of traditional employment.
What does this mean for you? It means that if you are driven by a desire for freedom and the ability to shape your days, then you’re in good company. These are perfectly valid (and popular) reasons for starting your own business.
Another key category of motivation is necessity. For every eager entrepreneur who plans their transition to self-employment in meticulous detail, there are dozens of people who find themselves with an urgent need to transition, either through redundancy, lack of opportunities, or a need to work around other commitments, such as childcare or caring for a family member.
The stories of business founders are often romanticised to include a plucky underdog working tirelessly to pursue a vision, but the reality is that, for many of us, self-employment begins when we least expected and is in response to an urgent need, rather than a long-held plan. The good news is that this is a completely valid way to enter self-employment, and as the statistics demonstrate, a well-trodden path.
How do motivations differ by gender?
The motivations are similar, with only one variance in the reasons included in the top 5. Independence, flexibility, control of time and work/life balance dominate the motivations for men and women.
The only differences in the top 5 are that 31% of men had a specific business idea they wanted to pursue, and 20% of women were unhappy in a previous role. Childcare needs were also more of a concern for women (9.5%) than men (2.4%).
Deterrents of becoming self-employed
Money – that’s the most common cause of hesitation before becoming self-employed. These concerns take several forms, but ultimately, most respondents worry about the financial impact of leaving behind regular employment.
It’s not just a salary that we lose, it’s the perceived financial security that comes with a job that seems stable, as well as the loss of benefits like holiday pay and sick pay (other employment benefits appear outside the top 5, including maternity cover, pension contributions and other employee benefits).
How do deterrents differ by gender?
The short answer is: not much. Everyone shares the same concerns. The top 5 lists feature all the same issues, only slightly rearranged.
Beyond the top 5, we find that maternity/paternity cover was equally concerning for men and women. Slightly more women (15%) than men (11%) reported that they felt a lack of confidence in their abilities.
How to overcome barriers to self-employment
What’s holding you back?
While self-employment promises immense value, freedom, opportunity, and income, all of this does come with a generous side-helping of uncertainty – which is enough to deter many people.
If you are contemplating self-employment, but struggling to convince yourself to get started, try writing a list of the biggest things holding you back.
How do your own concerns compare to the issues reported in our survey? Question your own feelings; you may have concerns not featured in our survey results.
Once you have a shortlist of your worries, try prioritising this list. Which issues are most entrenched, and difficult to overcome? Which issues are easy to resolve?
Here are a few strategies that might help you overcome the perceived barriers to self-employment:
1: Recognise the impermanence of permanent employment
Having a job with a salary usually feels as permanent as a block of stone. It feels like it will last for eternity. And sure, it might. But jobs can also vanish overnight. Your company might fail suddenly, for myriad reasons, and your dead-certain job can disappear in a flash.
Unless you occupy a very senior position in your company, you may never see warning signs that the company, or your role, are in a precarious position. What can feel like security is really faith in the people in charge. Your job might be secure, but would you know if it wasn’t?
While self-employment can feel unsafe and unstructured, it gives you opportunities to take control of your future. You can create the safeguards to protect your work today and tomorrow. If problems arise, you are free to tackle them in the smartest and most effective way.
Work can be safer when you are in control and have full visibility over your fortunes.
2: Test the waters by moonlighting
Unsure if self-employment will pay enough? Or worried that you don’t have the skills or experience to make it work?
Self-employment doesn’t have to be all or nothing; you can dabble in the azure waters of independence in your spare time. This won’t be easy, as it effectively requires you to take on a part-time job in addition to your primary role, but it may reassure you that you are ready to go.
Could you reduce your working hours to give you more capacity to explore your solo ambitions?
Try talking to other independent workers in your industry. There may be professional bodies, networking groups, or social media communities full of your peers, and these can be a rich source of inspiration, insight and support.
3: Plan to replace what’s lost
Becoming your own boss is a bit like leaving home. Of course, you may be leaving behind a lot of comfort and convenience, but you have the skills and resources to create your own nest.
The same is true when leaving employment. Yes, you’re leaving behind the accounts department, holiday pay, admin support, pension scheme and more – but these are all things you can replace.
You can get an accountant, organise a pension scheme, account for holiday pay, join a sick pay scheme, build support networks, pursue additional training, and even get a mentor or professional advisor.
Career progression doesn’t have to halt when you leave a job. In fact, it can accelerate, particularly if self-employment involves you broadening your skills or challenging yourself with more demanding projects.
Position your safety nets, and then prepare to fly the nest.
4: Spreadsheet your way to clarity
Feeling nervous about the financials? That’s natural.
Delving deeper into some financial forecasts may help you feel confident in your prospects. Consider a range of scenarios, including pessimistic, realistic, and optimistic. Consider what you must earn in a month to survive, and explore how, why and when this might happen.
Plan to keep funds in reserve so that you always have a financial cushion in the event of some unexpected crisis. Get income protection so you have a guaranteed income if you’re unable to work due to sickness.
Becoming self-employed can be scary.
But you know what’s scarier? Waking up one day and discovering that you never took the chance.
Self-employment is not right for everyone, and it does involve hard work, an element of risk, and the acquisition of new skills and responsibilities.
If you decide that self-employment is right for you, remember that you can mitigate most risks with planning, research, and the right support team.
When you are ready – register your business with Tide for FREE. Registering your business with Tide is incredibly fast, easy and free. You not only get to officially start your company, but you get a free business current account at the same time, which is the best way to ensure you’re keeping your finances in order from day one. Be your own boss and register your company with Tide🎉
Photo by Mikael Blomkvist, published on Pexels