The Hidden Costs of Leaving Employment to Start a Business

With one in five adults starting new businesses, it’s no surprise that some ventures thrive while others struggle. Entrepreneurship is exciting—there’s freedom, creativity, and the chance to truly build something of your own. But when you leave traditional employment, you’re also waving goodbye to a few comforts that many of us take for granted.

Starting a business doesn’t just mean gaining independence—it also means losing some perks that used to quietly show up on your pay stub (or in your closet). Here are a few of the not-so-nice parts of leaving a steady job behind:

• Paid Time Off (PTO)
  Remember that last paid holiday or vacation? Savor the memory, because as a business owner, if you take time off, your paycheck usually takes time off too.
  
• Paid Sick Leave
  No more calling in sick and still getting paid. If you’re under the weather, you either power through or accept that sick days come with a financial hit.
  
• Maternity & Family Leave
  Employers often provide some form of paid leave for new parents or family emergencies. As a business owner, those breaks are unpaid—your business (and income) keeps moving whether you’re ready or not.
  
• Health Insurance
  That employer-subsidized health plan? Gone. Now you’re footing the entire bill, and those premiums can feel like a second rent payment.
  
• Retirement Contributions
  Employer 401(k) matches vanish the moment you step out on your own. Unless you set up your own retirement plan, you’ll be the only one putting money away for your future.
  
• Consistent Paychecks
  No more automatic deposits every other Friday. Your “payday” depends entirely on how your business performs—and sometimes that means no paycheck at all.
  
• Unemployment Benefits
  If your business struggles, there’s no unemployment line waiting for you. That safety net is for employees, not owners.
  
• Employer-Paid Taxes
  Surprise! Your employer used to cover half of your Social Security and Medicare taxes. Now you get the honor of paying both halves—hello, self-employment tax.
  
• Professional Development
  Training sessions, conferences, even tuition reimbursement? Those used to be on your employer’s tab. Now they’re 100% on you.
  
• Liability & Support
  From HR to IT, your old workplace had teams in place to handle the messy stuff. As an owner, those jobs fall on your shoulders (at least until you can outsource them).
  
• Free Swag
  Let’s not forget—no more free logo shirts, tote bags, or coffee mugs. As a business owner, if you want branded gear, you’ll be the one ordering (and paying for) it.
  

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The Big Picture

Yes, you give up a lot when you leave a steady job—the paid holidays, sick days, family leave, predictable paychecks, even the pile of logo shirts you didn’t ask for but somehow wore all the time. But what you gain can be just as powerful: freedom, flexibility, and the chance to build something that’s truly yours.

The key is going in with your eyes open. Plan for those lost perks, budget for the extra costs, and create systems that support your new reality. That way, the trade-offs feel less like losses and more like stepping stones toward something bigger.

Entrepreneurship may not come with paid leave or free t-shirts—but it does come with the opportunity to design your own future.