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Sole Trader vs. Employee

Sole Trader vs. Employee

At Bizmatrix, our students consist of employees and sole traders from a wide range of backgrounds and expertises. We also often have individuals or organizational groups looking to up-skill or expand their career paths, therefore are completing further training to assist this. However our students are often faced with decisions between being self-employed as a sole trader, or working for a big name gas/electrical organization as an employee – but the question is, which one is better?

There is a constant battle between self employed or organizationally employed, and when re-entering the workforce after further training there are certain things to consider before undertaking one or the other. Listed below are the pros and cons of being a sole trader or an employee, as a means to create a direct analysis and clear understanding of each.

Sole Trader definition:

Google Web definition explains a sole trader as “A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. …”

Employee definition:

Google Wed defines the work employee as “a person employed for wages or salary, especially at non-executive level.” When we speak about employee in this article, we mean for an organization between 50-100 people – a small to medium business employee.







Control of work and business ethos

Liability and the risk of unlimited liability/debt

Limited liability working with a large company

Dilution of power- in some cases you don’t get to make any of the decisions

Specialist and individualized services

Unexpected expenses – limited income means limited investments

Paid sick days – regular income – secure salary and benefits

Expected role – not your chosen role as an employee

Profit retention – you earn all of the income instead of it being dispersed to the organization

Decision making and experience – you are required to make all of the final calls

Work – life balance is pre-determined with possibility to expand your career in other fields of your organization

Structured and set work hours/little choice for flexibility and change

Limited holidays and sick days

Reference: The Company Warehouse.

From the information above, it can be determined that the main decision comes down to – how much experience have you had in your field and whether or not you have a vision of where you want your business (work as a sole trader) to go? If you are ready to put in the hours and work hard to build up your own business – then go for it, however if you’d prefer to have structure and security of another organization, then perhaps working for an organization is better for you. Making this decision is a personal choice and both options have their fair share of pros and cons, so it comes down to your personal and work related goals and visions.

Bizmatrix Group was started from Darrel Vecchio working as a sole trader then turning his work into a training organization– so remember, there are so many options and ways to build your business up! If you would like more information on this topic – Bizmatrix will be releasing a new mini series focusing on training, business and all areas to help build your understanding of being successful in the workforce – so stay tuned.

Have you had experience managing a large organization or do you work as a sole trader?

Tell us about your experiences in the comments below!


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