5 tips if you're thinking of working for yourself
People become self employed for all sorts of reasons. Perhaps they want more freedom and want to fit their work around their lives more, perhaps it's just the best option available, or maybe they feel ready to take on the challenge of running their own business.
Either way, more people than ever are taking the leap into self-employment. According to the Office for National Statistics, 4.53 million people in the UK are self-employed - with 1.67 million taking the plunge in the past five years alone.
Whether you're a painter & decorator, an internet start-up or planning to write that great novel, there are a few things you could benefit from before you dive into the world of working for yourself. It's something this writer has tried - and learned a lot of lessons from.
ï Do your research - Find out if there's a market for what you're providing - is there a local audience? Is it something you can do from home? If you're a journalist, find out and only approach the publications and editors that you're best suited to. And if you're opening a shop, are there already plenty in the area?
ï Sort out your finances - Most people will be using their own money to get started and will probably have to live on a reduced wage while you get things going. Before you set up on your own, it's important to make sure that you have enough money put aside and that your finances are in shape. This could include checking your credit report and credit score, just in case you need to apply for credit at some point. No- one can be sure if your venture will turn out to be profitable enough to live on, so unless you've got a ready-made vast client base it's worth planning to cover yourself in those early months.
ï Get the basics right - Should you be a sole trader, a partnership or a limited company? Sole traders have to keep a close record of all their income and expenses, and fill out an HMRC self-assessment form at the end of the tax year. Setting up as a limited company can be beneficial from a tax point of view but would lead to increased set-up, administrative and accounting costs. Many self-employed people - journalists and plumbers for example - start off as sole traders but as their business increases and their documentation becomes more complicated, move to becoming limited companies.
ï Get the right people around you - While being self-employed allows you to be in charge, you can't do everything yourself. Accountants can help you keep your finances in place, and web designers and photographers can help give your business the professional presentation that makes it stand out.
ï Spread the word - Networking becomes even more important when you're no longer perhaps part of a large organisation, so business contacts, local networking groups and simple word of mouth recommendation can be very useful. Social media can be used as a great promotional and networking tool - and targeting the right people that you think will like what it is that you are doing.
To summarise - it's about using the resources available to you and putting in as much planning as possible. And remember, there's plenty of free advice available from your bank, business advice centres or websites such as startups.co.uk, Citizens Advice and www.gov.uk
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