Going self-employed and becoming your own boss can be an immensely rewarding experience which can lead to a business that’s more successful than you imagined, and with you at the helm right from the start.
That said, though, there’s also a lot of planning and preparation that will go into the early stages to ensure things go smoothly from the start. Having the right advice on hand to guide your business is vital, and there are great sources of advice you can make use of, such as FSB Workplace pensions, which can help you succeed. So what are some of things that you might not realise that go into self-employed work?
Taking Time to Build Up a Client Base?
Compared to working in a more traditional employment, going self-employed can feel more inconsistent during the early stages. With regular employment, you know exactly how much you’ll earn for how many hours of work.
With self-employment, though, you might only start out with one or two clients as you begin to build awareness of your new venture. To help ramp up the pace that people get involved with your business, you should consider putting aside some money to budget for marketing purposes.Think about things such as advertisements in local newspapers, posted flyers, or sponsored posts on social media. It might feel like a fruitless spend so early on, but the amount of exposure you’ll receive will certainly help bring new clients in, especially if you can demonstrate a high level of professionalism in your materials, as well as demonstrating some sense of unique selling point that separates you from competitors. It might also be worth ensuring that you have a small amount of cash put aside to help you weather the early days of your business. It’ll help reduce impact on your home life, while also helping you to draw in those crucial early clients.
Protecting Yourself from Unexpected Costs
When it’s your first time going into self-employment, you might not realise some of the extra costs that may become necessary if you want to both succeed and keep your new business safe.
For example, if you’ll be interacting with the public, and they injure themselves accidentally as a result of your work, such as if you’re a painter and decorator and someone trips over your tools, you’ll want to the peace of mind knowing you’re financially protected.On the other hand, if you produce things that you directly sell to customers, such as homemade decorative crafts, which somehow cause injury, you could still be liable, and your financial security is still important. This is where business insurance comes in. For the former situation, you’ll need public liability insurance, while for the latter, you’ll need product liability insurance. These types of insurance will help you pay for any costs incurred as a result of injury or illness relating to your business.
However, even if you provide a less physical service, such as in a consultation role, there’s still a risk to your business. If you provide a recommendation for your client to take a certain course of action, and it then goes wrong and costs them money to fix, you may be liable, as it was your advice that led to the incurred cost. In this instance, ensuring you have professional indemnity insurance in place will protect you.
Self-Employed Taxation and Preparing for the Future
Going from working under an employer to being your own boss will bring with it some changes in the way that income and tax works. It can be pretty jarring to suddenly be responsible for paying your own tax if you’re used to it automatically being deducted from a regular monthly paycheck, for example.
When you’re self-employed, you’ll be responsible for charting your earnings, determining how much tax you’ll have to pay, and filing your own tax return each year. Because of this aspect of self-employment, you should always make sure to keep accurate records of your income. This will help make the process far simpler once it’s time to file your taxes.You should also try to keep your future financial security in mind as well. What sort of avenues will you take to put some savings aside for retirement? This is an especially relevant issue, as self-employed people are exempt from automatic enrolment into workplace pensions: Do you choose to enrol into one anyway, or would you prefer additional methods of saving? However you choose to plan and operate your business, and however you plan to prepare for the future, giving these elements due consideration early on will certainly help lead your business to success.
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