Self-Employment - Term Overview

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Self-employment is a type of work that consists of generating income independently. This includes, for example, those who own a sole proprietorship and freelancers who offer their services.

That is, if the person is self-employed, they don't receive the salary of a company. However, it has its own source of subsistence.

Self-employment is then characterized by exercising the activity without depending on a salaried job. In addition, the worker negotiates directly with his clients.

Types of self-employment

As we already anticipated, there are mainly two types of self-employment:

- Sole proprietorship: It's made up of a single individual, who is its owner, manages the business and benefits from the profits.
- Self-employed: The worker doesn't belong to a company, but offers his services independently. Thus, you can have several clients, permanent or sporadic. This may be the case for lawyers, architects, graphic designers, among others.

Advantages of self-employment

Among the advantages of self-employment are:

- The person can organize their work schedules and adapt them to their lifestyle.
- The self-employed individual isn't dependent on the guidelines of an employer. Set your own goals and your business model.
- If the worker has his own company, it can scale to become a large corporation and offer an economic support for a long time horizon.
- The person not only generates wealth for himself, but can offer work to others.
- The individual can dedicate himself to his activity of greatest interest. Then you will feel more motivated.

Disadvantages of being self-employed

However, self-employment can also have disadvantages:

- The person must personally be in charge of the payment of taxes and of all the procedures that must be carried out with the government, such as the acquisition of licenses.
- The worker must worry about paying social security (This varies by country). Such payment is usually the responsibility of the employer.
- Time management can be a difficult task and requires self-discipline. In addition, if the person owns their own business, it can be difficult to separate from it and delegate functions.
- Income can be highly variable from period to period. In contrast, a dependent worker isn't subject to that level of uncertainty.
- The risk of the business or activity is assumed, and may at some point generate losses or even go bankrupt.

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