Self employment simply means working for the self. Self employed people are the one who do not work under an employer and earn their income from some trade of business operated by them at personal level.
A self employed person may or not be a business owner. Unlike the business owner a self employed person is usually the one who is practically involved in hands on operations of his/her own business. Ratio of self employed people in a country directly put impact upon the state of “job availability” in that country.
Concept of self employment
We all know that smart income is a mandatory requirement to live a happy life. Everyone present around us is indulged in one or another economic activity to earn their livelihoods. Some people work for others and get fixed daily/monthly/yearly compensation in return. Other people start and operate their own business instead of working for others. In this case the business that they operate act as their source of income. Such people who operate their own business are known as self employed people.
Self employed people take their own decisions and risks as a result all the earnings of their business belong to them only. You must have seen tailoring shops, hair cutting shops, grocery shops, general stores etc in your surrounding markets. These shops are managed and owned by a single person (that may or may not use assistants). These persons are self employed people and this economic activity is known as self employment.
Characteristics of self employment-
1. Self employment is conducting some business on one’s own in order to get one’s own livelihood.
2. A self employed person is official owner and manager of his/her own business, which may or may not appoint some assistants. So, self employment may or may not provide employment to others.
3. Earnings of self employment activity are not fixed.
4. In the self employment, owner takes complete risk of business, so he/she enjoy the entire profit independently.
5. In the self employment, owner will always be free to take any decision regarding his/her own business.
Importance of self employment
In developing countries like India, unemployment is a huge problem and people don’t have enough career opportunities. In such situation self employment is crucial even for the nation. Few points that explain the importance of self employment are given below:
• Small is easy– Self employment activity is usually a small business which is extremely easy to manage and operate as compared to the large businesses. Investments and risks are also small in self employment activities.
• No fixed limit of earnings– In self employment activities there is “no fixed limit” of earnings. One can have large income in a festive season.
• Big come from small– Every successful business owner first become a self employed person. It is a common observation that self employed people have a basic tendency to develop their business into a large enterprise.
• Reduce problem of unemployment– Self employment activities reduce the problem of unemployment from the country and self employed people may also provide employment to others also.
• A development platform for the uneducated ones– in developing countries, education is not for all. Many people stay unemployed due to lack of education and professional skills. These people can start and grow their careers as self employed people of the nation.