The Pro’s and Con’s of Self-Employment in Australia

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The Pro’s and Con’s of Self-Employment in Australia

Shifting to self-employment can be a great way to gain choice. But it’s not without its risks and drawbacks. In this post we explore both the positives and the negatives to help you decide whether self-employment might be the way forward for you.

Beyond the contents of this post, we have several other tools that might help you if you’re contemplating a move to self-employment. Firstly we have our pathways self-assessment tool , which can be found in the Financial Autonomy book and also on the front page of our website. This tool helps point you down the pathway most likely to fit with your circumstances and objectives. We also have our two Entrepreneur You courses. One is the full programme called Transition to Self-Employment Without Going Broke, then we also have an abridged version specifically for Side Hustles.

The Pro’s of Self-Employment

  1. Flexibility

When we think about gaining choice, flexibility is often absolutely central. And other than being in a position to fully retire, nothing provides greater flexibility then a shift to self-employment. You can decide how much you want to work, when you work, and what the work is that you want to focus on. You can fit your work around other commitments, and work in an area that you enjoy or find interesting.

Self-employment is unquestionably a way to achieve greater flexibility in your life


2. Can’t be made redundant

A nice element of being self-employed that is sometimes under-appreciated is the fact that the demand for your work is determined by the satisfaction of your customers. Your employment or career is not determined by someone up the chain from you, who decides on a restructure in which your role vanishes.

Now business goes in cycles and as a self-employed person, you will certainly be impacted during a downturn. But if you’re able to grow your business so as to have a team, then during a tough phase in the cycle, for example a recession, there’s always room to scale back that team and still ensure you have work and income.

3. Uncapped earnings potential

Being self-employed, you are financially rewarded for the value you deliver. As an employee, your boss commits to giving you a set wage, in the expectation that the value you create will exceed that cost, resulting in the business making a profit. Shifting to self-employment means that you capture this extra value that you create and can put it in your own pocket. It also means that if you have an inclination to put in more hours, more effort, or are able to work more efficiently, you’re able to reap the rewards that this results in.

4. No office politics

We’ve probably all been in circumstances where the job is fine but someone that you have to work with makes life unbearable. Shifting to self-employment can solve this. Early on at least it’s quite likely that you’re a one-man band, in which case you’ve got no one to be concerned about. If you grow a team, you at least have control of the hiring and firing, so that if someone is making you miserable, you can move them on. Now of course you have to keep your customers happy and it could be that they make life difficult sometimes, but if you’re successful you will hopefully have a range of customers and if one is proving too difficult, you can always suggest they find another provider.

5. Potential to build an asset

Being self-employed, you’re potentially building a business, which may have value when it comes time for you to move on or retire. Now this depends a lot on what you do as a self-employed person. If you are a solo business, for instance a consultant, then it’s likely there is no asset to sell once you’ve had enough. But if you’re able to build up a business with a team, such that the business continues to generate income and profit independent of you, then you have an asset there that could add to your overall wealth, and retirement savings. In effect the value of the asset that you grow is extra income that you’ve generated through the time that you’ve built your business.


The Con’s of Self-Employment

There are several attractive reasons to shift to self-employment but of course it’s certainly not a one way street. Let’s now consider the drawbacks of moving to self-employment.

  1. Pressure

Number one is certainly the pressure . It’s all on you. You need to find the customers, convince them that you can solve their problem, deliver that solution, and then get paid. As an employee, money just magically dropped into your account every fortnight. It’s a new ball game as a self-employed person and something that can take quite a bit of adjustment. Solving this is actually something we spend quite a bit of time on in the Entrepreneur You Transition to Self Employment Without Going Broke programme.

2. Isolation

I mentioned earlier the attraction of escaping office politics. But of course having work colleagues around you is more often than not a positive rather than a negative. Shifting to self-employment does have the potential to cause you to be isolated, especially if you’re in a role where your work entails sitting in front of a computer all day. Solutions such as communal workspaces, and arranging regular catch ups with professional colleagues, can become very important to ensure you maintain social connectedness.

3. Less stability/certainty

As an employee you have certainty, at least in the short term, as to what your income will be. Once you’re self-employed, your income is completely dependent on the demand for your services, and the needs of your customers. Should your customers suffer some sort of setback, that can cascade through to your business. There can also be industry or technology changes that cause demand for your services or skills to dry up. Now of course the reality is if demand for your services dry up then you’re equally at risk as an employee, but there’s at least that buffer where your employer is between you and the customer.

4. Challenge taking a break

As an employee, you’ve got your four weeks annual leave, and once you finish up on the Friday you can largely forget about work until you have to return. As a self-employed person, especially early on, it can be quite difficult to take a break. Inevitably you’re checking emails or responding to phone calls. Some manage this by having a regular scheduled shutdown, most frequently for two or three weeks over the Christmas period. In some businesses it can be managed by having someone else fill in whilst you’re away. And if you’re able to build the business to the point where you have a team, then it becomes far easier to be able to take a break. But certainly this is a challenge early on for anyone moving to self-employment.


Well there you have the Pro’s and Con’s that I’ve identified in moving to Self-Employment in Australia. To summarise they are:



Can’t be made redundant

Uncapped earnings potential

No office politics

Potential to build an asset




Less stability/certainty

Challenge taking a break


Being self-employed is certainly not the way to gain choice for everyone, or even most people. But it can be a way to gain choice, and if it is a pathway you’re interested in pursuing, I hope these thoughts help you make an informed decision.

Don’t forget to check out Financial Autonomy Academy to learn how we can help you succeed. Go to

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