Have you thought about being self-employed? Every year, more people are leaving the employee ranks to become self-employed. The thought of actually trying it, though, can be quite daunting. The risks and uncertainties may feel overwhelming. But the benefits of self-employment may very well be worth the effort. So take a few moments to consider a few important guidelines to being self-employed.
What is self-employment?
First of all, understand what it means to be self-employed as opposed to being employed by someone else. A person who is self-employed works for himself, not for a person or a company. Self-employment involves working on one’s own time, choosing when and where the work is done. Usually a person who works for an employer has to work a set schedule and has a set income given to him by a person or company. The self-employed individual handles his own money and may even choose to hire some of his own employees to help out with the work.
What are the advantages?
Being self-employed has some distinct advantages. The main advantage is that you can be your own boss. No one tells you what to do or how and when to do it. You can work on your own time, as much or as little as you choose. If you need to take time off for any reason, no one is going to stop you. For many, self-employment provides the ideal working situation.
Many who are self-employed are able to work right out of their own home. A web designer or jewelry maker can get all their work done in their pyjamas if they choose. This certainly provides a level of comfort that an office job cannot offer. Self-employment provides much more freedom and flexibility than working for an employer.
So who can be self-employed?
Simply, anyone who is motivated to do so. Some may choose to stay employed at their day job while earning some extra income during evenings and weekends through self-employment. Others may have lost their job and have difficulty finding another source of employment. Self-employment may be a creative solution to such a dilemma. Still others bravely quit their jobs in order to pursue their own freelance or business venture. Some who work hard at it even find they can make more money working for themselves than they ever did at their old job. Whatever your situation, you have the potential to be self-employed.
First of all, think about what marketable skills or talents you have. Perhaps previous work or schooling has given you extensive knowledge in a particular area. If you have a craft hobby, such as woodworking or knitting, maybe you could sell what you make. There are many services, like delivering food and groceries or dog walking, that are fairly easy and assist people who simply do not have the time or capability to do it themselves. Figure out what you know and what you are good at. It helps when you really enjoy what you choose to do. But find something you know you can do, and stick with it. Freelancing, consulting, or starting your own business are great ways to be self-employed. If you still have trouble figuring out what to do, find others who are self-employed or look at freelance websites to see what skills are in demand. You will find something you can do to make money for yourself.
Have a plan.
Now that you know what you will do, make a plan. If you are selling a product, how are you going to sell it? You can sell most products on an online marketplace like eBay or Etsy, or even sell from your own website. Some local merchants may be willing to sell your product, or you could find a place to set up your very own shop. If you are selling a skill or service, there are many freelance websites that can help you find work. You can plan to advertise through a local newspaper, fliers, or billboards. The main goal is to make yourself known to as many potential customers as possible. People can’t buy something they don’t know about. Write out your plan of action to guide you as you start on your path to self-employment.
Research the market.
Find other people or businesses who do something like you. Find out how much they charge for similar items or skills. It is important to make sure your prices are competitive. If you overcharge, most people will take their business elsewhere. Look at the trends of what consumers want. You will get more business if you can cater to what people will need or want.
Use your resources and ask for help.
Those who are new to self-employment may sometimes hit a roadblock. Without guidance, it can be difficult to know what to do next. Don’t assume you already know how to do it all. It definitely helps to be resourceful. Books, websites, and people with experience in your field can provide much valuable assistance. Don’t be afraid to ask for help.
Have a schedule.
Being self-employed takes work and self-discipline. If you plan to just work whenever you feel like it, you probably won’t get much done. That’s why it is very important to make a schedule for yourself. It can still be flexible, but there needs to be time set aside just for work.
Organization is key to being successfully self-employed. If most of your work will be done at home, have a space just for your work. Somewhere you can focus on the things you need to get done without distraction. Keep your work area neat and tidy, so you can easily find what you need when you need it.
Keeping paperwork in order is necessary for someone who is self-employed. Much of what you buy, sell, or any business transactions will need accurate records. Any receipts, invoices, or anything related to you work should be kept in a safe and easy to find place, like a file cabinet or drawer used only for that purpose. Any money that is made or spent needs to be accounted for and reported for tax reasons. Good records will save you from guessing on your taxes.
Keep business and personal separate.
Keep business transactions strictly separate from personal transactions. Keep a separate bank account for your business. If you buy work-related items at the shop, don’t mix them with personal items. Get separate receipts. This will also assist you in keeping accurate records and avoiding confusion.
Register as self-employed.
Within three months of starting up, you will need to register with HM Revenue & Customs as self-employed. If you expect to make more than £70,000 in a year, then you must also register with VAT. Failing to do either could cost you quite a bit of money. If you have other tax-related questions, the self-employment page of the HMRC website provides the information you will need.
As a self-employed person, you may not be concerned with insurance at the start, but in the long-run, insurance for your business may be wise. Professional indemnity and public liability insurance might be worth looking into. If you start hiring employees to work for you, you may be required to get some kind of insurance, like employers liability.
Be prepared to fail.
Self-employment is not always easy. Your first attempt may not be as successful as you hoped. So prepare for the worst. You just might have to run into a few failures before you find success.
Even if your first attempt fails, be determined to make it work. Keep trying and hope for the best. Determination can go a long way in making the impossible possible.
Just go for it!
Of course, first starting out is a little scary. Once you’ve thought out the logistics, however, don’t hold back. Get it planned out and then do it! It would be a shame to have a great business planned out that never even gets started. Be passionate and daring in your pursuit of self-employment, and you will be more likely to find success!