Self-employment is a big thing in the UK. Though the figures took a sharp tumble during the first lockdown period in 2020, there remain around four million self-employed people in the UK. If you’re considering becoming a part of this statistic, then there are a few things you might want to consider. Self-employment isn’t right for everyone, and it’s sensible that you assess all of the variables before you make the commitment.
What Does It Mean to Be Self-Employed?
When you’re self-employed, you run your own business. Its ultimate success or failure, therefore, is your responsibility. It’s possible to be self-employed and employed at the same time – for example, if you have a side business that you run on the weekends.
The Pros and Cons
Pros
Deciding Own Working Hours
Self-employed people do, on the other hand, have the ability to dictate their own hours. If the work that you’re doing isn’t time-sensitive, and you don’t have to be available at a fixed time, then this flexibility might come in very handy. You might work late into the evenings and during mid-morning. This will allow you to accommodate your personal life more easily. It may also save you from having to sit in heavy traffic – which means that you can be more productive and fulfilled overall.
Always Learning
Going into a new business all by yourself means you have to learn new things every day. You’ll indeed face some new challenges, but with challenges come opportunities. You’ll have a flexible schedule to take care of your duties the way you want. Thus, you’ll have the skillset to pursue constant growth and self-development, which are the pillars of entrepreneurship.
Cons
1: Lacks Fringe Benefits
Self-employed people lack many of the fringe benefits that a full-time employer might offer. For example, you might not have a holiday or sick pay, a company car, or a company pension. If you want to give yourself these benefits, then you need to do so out of your own profits. Self-employed people tend to maintain a more generous float in their current accounts. This allows for short-term shocks to be more easily absorbed.
2: Doing Everything By Yourself
When you are self-employed, you have to wear a lot of hats altogether and handle some tasks that you may not be at all skilled with. For example, you have no sales experience, and you have experience in finance. When you are self-employed, you’ll have to handle everything from sales to finance, from marketing to becoming an HR, which can be tedious from time to time.
What to Consider
Before you become self-employed, you’ll need to think about registering yourself with the tax authorities. You’ll need to determine whether it’s worth your registering for VAT.
You’ll also need to make any investments in equipment. If you’re working as a contractor, for example, having access to your own tools is essential – and that means quality drills and drivers from a reputable brand like Milwaukee. Cheap equipment, in the long-term, is a false economy.
Becoming self-employed can be lonely at times. You will miss the feeling of being surrounded by your co-workers and having a water cooler conversation from time to time. When you are self-employed, you may not miss the exhaustion of daily commuting, but you can miss the social interaction that kept you sane for all these years.
Self-employed people who are exposed to particular kinds of risks might need to invest in specialised insurance. Whatever the nature of your job is, you’ll need to keep stringent financial records. This will reduce your workload at the end of the tax year, and limit your vulnerability to an unexpected tax audit.
Different kinds of businesses will impose different requirements on the people who run them. Formulate a business plan before you get started, and you’ll give yourself the best possible chance of staying on top of the challenge!
You need a strong network to be successful in your self-employment journey. You’ll have to learn to come out of the selfish mindset because you are not an employee anymore who has to climb up the corporate ladder beating everyone. You must work together with the people in your network so that it benefits all of you. If you lend them a helping hand in need, they will surely return the favour.
Conclusion
Self-employment is not everyone’s cup of tea. You have to have patience, perseverance, dedication, and commitment, to be successful in this journey.
There will be challenges ahead of you, but you will soon accomplish success if you stick to your plan and don’t back out.
It is the stepping stone of entrepreneurship, so do it right!
