A Quick Guide to Going Self-employed
More people than ever before are taking the leap into self-employment. If you’re thinking about joining them, we’ve put together a list of pros and cons that will help you to make an informed decision.
Things to consider before going self-employed
There are currently more than five million self-employed people in the UK. If you’re ready to join them, there are a few factors to consider first:
Do you have a strong business plan?
Have you created a financial business plan too?
Do you know exactly how you’ll acquire clients or customers?
Do you have enough money put aside for all of the expenses that come with setting up a business?
Do you also have enough money to pay your mortgage/rent, bills and other personal expenses for a few months as things are starting up?
Are you able to cope with slow periods if they occur?
Who are your competitors and how will your offering differ? This is also known as your unique selling point or USP.
Will you need commercial premises or can you comfortably and effectively work from home?
Can you do it by yourself or will you require freelancers/employees from an early stage?
Are there any large events coming up in your personal life that may affect workflow, such as a wedding, having a baby or moving house?
Do you have an accountant in place? This can make a world of difference to the performance of your business and how quickly it grows.
Positives of going self-employed
Needless to say, there are so many pros that come with self-employment. Aside from the obvious perk of being your own boss, you can expect to enjoy the following advantages:
You have total ownership over the development of your business, ranging from its mission and vision to its format and personality.
There are multiple expenses that you can claim against, especially if you own a limited company.
You get to work wherever suits your preferences and mood. It could be a case of renting or even buying property, moving into a shared office facility or co-working space, working from home all of the time or adopting a hybrid working arrangement.
There’s no cap to how much you earn. The only limit is how much effort you put into the business and its ongoing growth.
Your career will most likely be more varied, as you’ll be working for a range of clients or serving a wide customer base.
This is an opportunity to unleash your imagination and creativity. The most successful businesses are those with innovation at their core.
Thanks to greater flexibility, you should be able to work around other commitments such as childcare.
If you work from home, you can say goodbye to lengthy commutes and expensive travel costs.
Potential negatives of going self-employed
In order to provide balanced insight and advice, we also need to look at the potential cons of self-employment, such as:
The success of your business, at least to begin with, is all down to you. It’s a huge responsibility to take on, although it’s also a very rewarding challenge.
There’s no guaranteed income. Maybe you’ll hit the ground running and beat your targets or perhaps there will be dry periods that are hard to get through. This is why a clear mission, perseverance and 100% dedication are vital.
There will almost certainly be start-up costs. It might be computer equipment, office furniture, storage facilities, stock and inventory, uniforms, store signage or anything else related to the nature of your business. These all need to be factored into your financial business plan .
Be prepared for your work-life balance to change for a while, as going self-employed requires a lot of time and focus.
Unless you have employees who can pick up additional workload, it will be hard to take holidays during the first year or two. The same goes for sick days.
There’s a lot of admin involved, which is why having an accountant and perhaps even a company secretary on board is such a wise investment.
Interested in going self-employed?
If you’re still reading this and believe that going self-employed is right for you, TreyBridge Accountants can help with everything from setting up your business to managing its bookkeeping, payroll, tax and credit control on a long-term basis. To find out more, call our Yorkshire office on 01482 235575, our London office on 0207 885 0605, or fill in the contact form below.
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