Self employment in the UK reached an all time high of 4.5 million in 2014. The benefits are many: freedom to work the hours you want; control your own earnings; take holidays when you wish; challenge yourself. But is it right for you?
If you are considering taking the plunge into working for yourself, here are four key things to think about before you do so:
You will need to think about how comfortable you will be without a regular, guaranteed source of income. What would you do if you became ill or had an accident that prevented you from working? If things like this worry you, there are insurances you can take out for peace of mind that will cover you should you be unable to work in such circumstances.
Short term illnesses won’t be covered however, so if you were forced off work for a week with flu, you would need to ensure you had sufficient reserves to cover your income, as sickness pay does not exist for the self employed. Uncertainty as to where your next job will come from may also cause anxiety, as will unpaid leave such as holiday and perhaps maternity leave, so you will also need to consider how this will affect you.
Working for yourself calls for excellent networking, negotiation and communication skills. You will need good levels of confidence in order to sell your services at a rate that you believe you are worth. You will need to possess the ability to make decisions and stand by them; you’ll need patience as well as understanding of how those you deal with need to work, and your presentation skills will need to be top notch so that prospective clients have the utmost faith in your abilities.
Before you go it alone, you will need to make sure there is a market for your services. Start by searching online for others offering similar services that match your skill set. Can you match the quality of work they are showing in their portfolios? Are the rates they are charging in line with what you have in mind, and are they going to keep you afloat?
Post questions on forums or blogs to help you gauge whether there is potential for you in your chosen market, and look for industry related reports to see if there are any economic or seasonal trends you should be aware of.
Aside from the accident and illness insurance, there are other insurances you will need to consider when going self employed.
Professional indemnity insurance will protect you should a claim be made against you for professional error, negligence or omissions. Public liability insurance will offer protection against third party property damage or bodily injury that you cause during the course of your work. If you receive business related visitors to your premises or visit clients’ premises, then this is a very important insurance to have.
Legal expenses insurance will provide you with the backing you need in the event of having to pursue a claim, for example for professional negligence or debt recovery.
If you are considering becoming self employed, an excellent first port of call for advice is your bookkeepers. They will be able to advise you on the tax and accounting related elements as well as get you set up with the right type of business structure.
Self employment can be exceptionally rewarding, but you do need to ensure it is the right thing for you. Good luck!