How to become self-employed
If you are wondering how to become self-employed, here are six questions to ask before you take the freelancing plunge.
Becoming self-employed is a dream for many of us – even us here at The Hollies Bookkeeping in Shropshire! The benefits include working your own hours, fitting your job around your lifestyle and being your own boss. Generally, it’s a lot more flexible than working for someone else.
Here are six questions you should ask yourself before you quit the day job in favour of creating your dream role:
Have you got the right support system in place?
It can be lonely, not least because you’re not contracted to go into an office every day and sit with colleagues. Although this might sound like the dream in theory, in practice it can be very isolating. Find a network of people who might have some spare time to hang-out with you during the day. Understanding friends and family are also key – your working hours differ from the 9-5 (that’s one of the great things about the role) but sometimes that means you might be working evenings or weekends.
Are you ready to be financially self-sufficient?
When you work for a big company, many of the more complicated financial things are covered. For example, you pay tax before your salary lands in your bank account, and you’re automatically signed up to a work pension scheme. When you’re self-employed, this isn’t the case. “As a freelancer, you have to take responsibility for doing your taxes,” Julie explains. “Always try and fill out your tax return in good time and deduct taxes from your own wages as you go. This will allow you to save the correct amount and won’t give you a nasty surprise at the end of the financial year.
“Likewise, you now have to look after your own pension because there isn’t a big corporation doing it for you. I’d recommend putting savings aside specifically for your pension each month, as the company would do for you. Being organised is a huge part of both tax returns and pensions, as you’re responsible for finding out what you owe rather than someone deducting it automatically. If you are struggling with understanding the process of tax returns then hire a good bookkeeper or accountant who can help you.”
Do you have any savings?
As well as the lack of financial guidance, going freelance also means waving goodbye to paid sick days and annual leave. While you’ll now be able to have as much time off as you’d like – and work from anywhere – you won’t be paid for the time you’re not working, which could do damage to your bank account. To help guard against any mishaps, save before you jump into the world of self-employment.
Do you know how to create enough contacts?
If you already have enough employers in place that will give you work, great! If you don’t, having a brilliant portfolio to show off from the get-go, and being willing to put in extra hard work at the beginning will help your client base grow!
Does your skill set lend itself to being self-employed?
While working from home is appealing, it’s worth taking a proper look at your CV and seeing if it’s genuinely a viable career move for you. Creative industries such as design, music and audio, as well as the programming and tech space are brilliant for offering roles to self-employed people.
Are you self-motivated enough?
“Being self-employed makes you a business owner, accountant and manager all rolled into one,” Julie says. “You have to take responsibility for meeting your own deadlines and client expectations.” This means being constantly on top of your workload, deadlines and emails, as well as chasing invoices and new work.