Smashing self-employment: Where to begin?
So, you’ve said goodbye to the 9-5 and decided to become self-employed… now what?
Self-employment can be a great fit for lots of people. However, the reality of taking those first steps and flying solo can actually be pretty daunting. This means that lots of people probably end up put off, and never even try.
If you have decided you’re interested in working for yourself though, where on God’s green earth do you start?
In our last blog we talked about what self-employment means and why it’s worth considering as a career option. Today we’re looking at those all-important practical first steps.
Taking the plunge
Firstly, double check whether what you want to do actually falls under the ‘self-employed’ umbrella, which is both large and kinda confusing.
Then, have a quick run through this handy checklist from Simply Business of final things to think about before you do a dramatic desk flip and quit your day job:
- Are you clear about how you’d get clients or customers?
- Do you have some money to set yourself up?
- Would you be able to cope with periods of little or no income?
- Do you feel confident about managing your own business, for example managing cashflow, keeping thorough records and completing tax returns?
- Have you thought through the impact of losing employee benefits, for example holiday pay, sick pay, and employer pension contributions?
- If you were self-employed, would you miss working alongside colleagues?
- Do you have a space where you’d be able to work and any equipment you need? If not, do you have the budget to buy it?
- Do you have any life-changing events to consider, for example an upcoming house move, wedding or new baby?
If you’ve gone through the checklist above and are still feeling pretty good, and you’ve got an idea you’re confident about, then it’s time to get cracking!
These are some key practical first steps to get you going:
- Choose the name you want to trade under
- Check what records you’ll need to keep
- Contact a business advisor to help you register for tax, as you will need guidance on whether you should register straight away or wait
Congratulations – you’re officially self-employed!
Things to consider
The next steps might vary depending on your individual situation so it’s important to do your research. Some good things to consider though, are:
- Banking – Although your business and personal incomes are taxed alongside each other, it’s important to keep your business records and finances separate from your personal ones. This means it can be a good idea to set up a business account. Shop around before signing up to one though as some offer free fees for the first 12 months, which can be helpful to a start up enterprise.
- Get business insurance – look into getting insurance so you’re covered if anything happens
- Benefits – you can still apply for certain benefits if you’re self-employed, and if you’re unemployed or already on benefits you might be able to get extra help through your Jobcentre Plus work coach
- Money money money – do some research into funding sources and whether having investors might work for you; there are lots of different options out there
- Key dates for your calendar – you’ll have certain things you need to do throughout the year that you didn’t before – like completing an annual Self-Assessment tax return – so make a note of them in your diary
- Get support – whether it’s looking at people in your field who might be happy to mentor you, a more formal set up like an accelerator, or just taking advantage of free government advice, take all the help you can get!
Which leads us nicely on to…
Getting support is vital – you can’t be expected to know it all and a lot of the support out there is free to new businesses.
If you’re an Onward customer interested in becoming self-employed, or you already are but need some guidance, we might be able to give you some support too. Get in touch with our Social Investment team to find out more.
If you’re just looking to get into a more traditional work set-up, get some training or need careers advice, our Works4Me programme is a great first port of call.
Find out more on our employment and training web page