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:
Security
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.
Confidence
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.
Research
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.
Insurance
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!
