Explain any risks involved in self-employment for the individual?

Question

Can you please help me as this is my assignment
thank you every1

Answer 1

No paid time off, thus it's very hard to take holidays!
No company pension scheme
No 'perks' that employed people get, such as subsidised healthcare, cafeteria etc etc
Lack of motivation, no support network, no-one to talk to at work etc
Extra administrative burden, namely having to keep accounts and pay an accountant to do your tax
Tendency to work longer hours than employed people because you get paid only for the work you do

Thus the risks are largely financial, but there are also those that relate to quality of life. (The flexibility of working hours can also be a good thing though)

Answer 2

If you don't stay on top of your marketing, you'll lose business. And you're your own HR department. And you have to pay your own health insurance. And you can't do what you love to do because you're too caught up in paperwork for the federal and state governments. There's more paperwork than you can ever imagine. Then there's the money issue. Many people don't have enough to keep a business going nor pay themselves. And of course, you don't have corporate sponsorship to help you out.

It's hard, and takes a lot of time management making sure all your ducks are in a row.

Answer 3

being self employed, you basically don't have a regular salary -- your earnings for the month is pretty much depends on how well you (andyour business did). but ebc you control themoney, you can actually "take" more than what you should from your business as your salary, which isn't good for the business.
also, your risks are pretty much unlimited. unlike in a corporation here liabilities of the company is limited to the actual assets of the company, if you are set-up as a sole proprietorship, then your liabilities to all your stakeholders extend up to your own personal belongings. literally no limit.
also as self-employed, you do not have vacations -- if you don't work, then you don't earn anything

Answer 4

The main risk for self-employment for the individual is that they are sloely liable for any debts incurred by that buiness. That means that should the business go under, they have to pay the debts and could lose their personal possessions such as home, car and any other assets.

Answer 5

Be careful on taxes-- getting a 1099 vs a W2 really screws people up because most self employeed don't save money in each paycheck for taxes...where as W2 its taken out for you

Thats the biggest risk when the company is up and going

Other risks... risk of being sued...
business risk, is your indusrty exempt from cyclical or economic turns? competition risk... and even internal personal company risk (employee theft, knowledge leaks etc)

Answer 6

You don't have the same employment rights as an employee...

Meaning, anyone paying you to contract with them can say bye bye, and there's little that you can argue with.

You have a responsibility to ensure your taxes are correct, rather than it falling on another company who would take the fall if it was wrong...

Answer 7

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Answer 8

the risk is that if you do not calculate our keep the inland revenue of your earnings it can get very expensive. the rest is up to your own personal drive and the only risk is failure.

its well worth paying an accountant to keep on top of things. as long as your day books are kept in order