New research from FreshBooks (The 2019 FreshBooks Third Annual Self Employment in America Report) reveals 24 million Americans want to be self-employed by 2021. However, despite a strong interest by most Americans to shift to self-employment, it is estimated that less than 2 million people in 2018 switched into self-employment.
As a put by Matt Baker, FreshBooks VP if strategy, the reason for shifting to self-employment among Americans vary based on gender, age, family status, and so on. He further points out that career control is on significant factor fuelling the shift. For example, there are those who want to choose when they work, and there are those who hate the idea of reporting to others daily.
This trend is also attributed to 8% drop in the last two years for self-employed professionals with a college degree as Matt puts it.
Respondents even make it clear that self-employment provides a healthy work-life balance (70%), better quality of life (63%), and less stress (55%).
While the report makes it clear most people now prefer to be their own boss, there are still some obstacles stopping Americans entrepreneurs from getting started and flourishing. Here are some reasons why Americans do not start a business.
Lack of cash
Financial concerns topped the list of factors slowing or preventing entrepreneurs from getting started and moving forward. As Baker puts it, there is a 28% that claim they don’t have the cash to invest. And there is a 27% worried about getting less money at the end of the day.
Generally, the 2019 reports show that 35% of those considering moving to self-employment are more worried about making consistent income.
Lack of self-confidence
This is yet another rampant reason that explains why there is still a considerable number to Americans dreaming of becoming entrepreneurs but still afraid to get started. The 2019 survey report shows that the lack of a complete business plan count for 27%.
As a way of motivating those not confident enough to jump into entrepreneurship, Baker recommends the use of easy to use applications like FreshBooks.
Lack of equality
Gender equality is yet another reason that discourages more and more entrepreneurs from switching to self -employment. FreshBooks has found that on average, self-employed women earn 28% less than their male peers despite having an equal ability to set their own pay rate.
From the above figure, it clears there is a group that feels less privileged. For example, in 2017, 65% of self-employed men respondents compared to just 35% of women. Although in the following years there was a small uptick in women entrepreneurs, the numbers from the 2019 study are actually identical to 2017.
Lack of health benefits
In the corporate world, all health benefits are well funded. This is not the case when you shift to self-employment. Everything becomes one’s responsibility. Bakers write that additional costs such as those attributed to health insurance could be a major concern.
Lack of Direction
Despite a huge number expressing interest in self-employment, there is a fraction not sure what to do once they shift. From the report, 14% of the respondents made it clear lack of direction is a big challenge.
While the above five reasons topped the list, there is still 17% of the respondents who gave other reasons. Fear of the company closing down, time management, adaptability, and lack of the right skill set are among the other reasons preventing Americans from being their own boss.