Becoming Self Employed

Becoming self employed is a dream for many people, but so often people are put off by the perceived difficulty in getting a self-employed career started. For those of a certain mindset, however, becoming self employed is a fantastic way to make a living in whatever field they choose.

But is it right for you? What do you need to know?

What does being self employed mean?

Being self employed simply means that you work for yourself rather than for someone else. If you run your own business then you are self employed, although it is possible to be employed by someone and also have your own business that on the side. If you are self employed you will likely be running a business as a sole trader or as a limited company – this simply describes your business structure, while self employment describes you as working for yourself.

What are the benefits of becoming self employed?

One of the main benefits being self employed is that it has always offered is more freedom. You work for yourself, so you can literally work the hours that suit you. If you want a day off, you can take one. If you need to start a little late, you can. That’s not to say there aren’t consequences to doing these things, but you have the freedom to better structure your time and workflow.

Everyone works in a different way – the way we approach projects, activities, and interactions with clients are all different. The benefit of self-employment is that you’re free to do all of this however you choose. The only company standards you have to uphold are determined by you.

This means self-employment can offer the possibility of a much better work-life balance, and more flexibility regarding the other aspects of your life. It can be easier to juggle kids and other commitments when you have that extra freedom to organise your own working day.

You also have the potential to earn more, as a self-employed person. You’re not subject to the whim of your employer when it comes to establishing your salary, your incentives, or your benefits. You establish what your service and your expertise are worth, and pay yourself accordingly.

Are there disadvantages to becoming self employed?

There’s a lot to love about being self-employed, but it’s not a leap everyone dares to make – the reason is that there are things you’ll have to worry about that the regularly employed won’t.

The first thing to consider, of course, is that you’re not guaranteed any work. When you’re employed, it’s up to your employer to find you the work to do. When you’re self-employed, it’s up to you – and if you can’t find any work to do or clients to serve, you won’t earn any money.

Another serious consideration to becoming self-employed is that you won’t get statutory sick pay or holiday pay – you earn when you work, and you don’t earn when you don’t. It’s as simple as that. It will be your responsibility to set aside the funds you need to see your business through the leaner times as well, as the market is always in a state of flux and no business is guaranteed customers.

Something else you will have to think about is financial record keeping. When you register as being self-employed you become responsible for keeping track of your finances, organising your own books, and making sure you file a self-assessment tax return. You can, of course, get professional financial help to manage all of these things, but it’s still more complex than just collecting your pay. It’s also of the utmost importance that all of your records, figures, and returns are accurate – or else you risk fines.

What key skills are necessary to be self employed?

At the beginning of this article, we mentioned self employment was great for “those of a certain mindset” – what does that actually mean? It means that no matter what the industry or niche you serve as a self employed person, there are key skills that are necessary for all self employed people. There are many, but here we’ll focus on the three most important key skills you’ll need for successful self employment.

The first skill is time management. You need to understand how to properly schedule your time, possibly weeks or even months in advance. Whether you’re offering a skill or a service, or you’re selling something, you need to understand how to work to a deadline and how to prioritise your workload.

You will also need communication skills. You will have to be the point of contact with your clients, your suppliers, and your customers. This may include anything from discussing potential work, to chasing up delayed shipments and resolving problems, and anything in between. There’s no customer service department to direct unhappy customers to – there’s only you. Communication skills, then, are essential.

Organisation is the third key skill you’ll need to have. You will have to organise your appointments, your deadlines, and your dates. You will need to keep accurate financial records for the purposes of your tax returns, and you’ll need to do this in the midst of actually operating your business.

How to get started as self employed

Still think it’s right for you? If all of this sounds like something that you can handle, self employment can be a fantastically rewarding way to earn a living. But where do you actually begin becoming self employed?

It’s essential you read the Government guidelines on becoming self employed. This will give you an overview of your options to becoming self employed, whether you need to setup as a a sole trader and what you need to know about taxation. Depending on the type of business you are looking at starting, you may want to consider setting up a limited company if becoming a sole trader doesn’t quite fit the bill.

You should also remember that you don’t have to be employed OR self-employed. You can actually be both. It’s perfectly possible for you to continue working a regular day job, and then run your own business in the evenings and on your days off. This is a path many take, to allow them to build up their savings and establish their new business simultaneously. You will still need to be registered as being self employed as well as employed, however, and all your self employed earnings will have to be properly declared through self-assessment.

With this information, you’re now ready to think about whether or not self-employment is right for you. It’s not a decision to be taken lightly, but the potential rewards and benefits are plentiful. You may also want to look at choosing the right business structure as it is so important in paving the way for a successful business.