Recently, I ran into a familiar face at the local farmers market. A few years ago, this person ran a small baking business, but now they work full-time in the administrative team at a local hospital. When I asked, "How's it going back to working for a company?" the response was striking. They said that while their freedom has decreased, they appreciate being able to sleep peacefully at night.

I've been hearing stories like this quite often lately. At one time, leaving a job to start your own business was seen as a symbol of success, but there is clearly a counter trend emerging. Why are people choosing to leave self-employment and return to salaried positions?

It's easy to assume that those who leave self-employment do so because their business failed, but when you listen to their stories, it's not that simple. Many have learned a lot over the years, yet they decide to change direction after personal calculations.

The most common reason is health insurance. In the U.S., self-employed individuals do not have the benefit of their employer sharing the cost of insurance, which means they end up paying much higher rates in the individual market. Surveys of small business owners show that monthly insurance premiums can range from $165 to $400, while the median annual net income can be as low as $16,000 to $20,000. This means a significant portion of business income goes toward insurance premiums. Whether sick or healthy, the worry about medical costs and insurance premiums can become overwhelming over time.

The second reason is income instability. According to the Bureau of Labor Statistics, the five-year survival rate for new businesses is just over half, and many businesses close within that timeframe. Even successful businesses often experience fluctuating monthly revenues, leading to patterns where one month they have a surplus and the next month they worry about credit card bills. For families with fixed monthly expenses like children's tuition or rent, enduring this rollercoaster can be quite challenging.

The third reason is the lack of safety nets related to retirement planning. When working for a company, there are minimum buffers like 401(k) matching or paid leave, but when running a business, individuals must manage everything themselves. In the hustle of running a business, planning for retirement often gets pushed down the priority list, and after several years, this can lead to increased anxiety.

Additionally, timing cannot be overlooked. During periods when one is raising children or caring for aging parents, the predictability of monthly income becomes much more important, while having flexibility is more appealing during times of abundance. Thus, the choice between self-employment and traditional employment is not a fixed answer but rather a decision that changes with different stages of life.

Interestingly, those returning to self-employment are not necessarily doing so because they failed. In fact, surveys show that many self-employed individuals chose this path voluntarily and reported higher incomes than in their previous jobs. This suggests that the issue is less about the business itself and more about a societal structure in the U.S. that overly relies on employment types for healthcare and retirement safety nets. Some individuals enjoy stability simply because they are employed by a company, while others do not have that same security; this is not a matter of personal effort but rather a gap in the system.

Therefore, we should not view leaving self-employment to re-enter the job market as a step backward. It is simply a rational decision based on what is needed in one's life at the moment. If stable health insurance and predictable paychecks are more critical at this stage, that choice is entirely reasonable. Conversely, if flexibility and autonomy are more important, one might return to entrepreneurship. The key is not which option is correct, but rather keeping options open and continually weighing what fits one's situation best.