With redundancies and unemployment on the rise, growing numbers are turning to self-employment to try and earn an income.
Nearly 1 in 2 (46%) of all self-employed workers are over the age of 50, so there is no doubt that more and more of us are considering it as a career pathway.
For some people, running their own business can offer a great sense of pride, achievement and job flexibility, with many wishing they had done it sooner. For others however, it can prove costly, stressful and energy draining.
Before going down the self-employment route, it’s important to do plenty of research and calculations so you can consider whether self-employment is the right fit for you. Things to consider include how you’ll land clients, whether you can afford the unpredictability of income and how you’ll be impacted by the loss of employee benefits.
Whilst you’ll never be able to mitigate all the risks, it helps to go in prepared with your eyes wide open – and to give yourself the best chance of success, it helps to be as well-informed as possible.
This guide will help you to weigh up the pros and cons of becoming your own boss and give you the information and advice you need to get started. If instead you are looking for ideas of different types of self-employment opportunities you could take a look at our guide 20 popular self employment ideas.
- Is self-employment right for me?
- The pros and cons of being self-employed
- Getting started – choosing your business structure
- Self-employment – can I afford it?
- Self-employment and insurance
- Once I’ve set up my business, how can I market my services?
- Hiring staff for the first time – where do I start?
- Monitoring and reviewing your business at regular intervals
- Self-employment ideas
Is self-employment right for me?
If you’re considering whether to work for yourself, you should first accept that your venture could take some time to get off the ground. It’s important that you’re prepared to work hard and put in extra hours where needed – particularly in the early days when you’re becoming established and building credibility.
Generally speaking, if you plan to work for yourself it’s helpful to have skills such as:
Determination, focus and self-belief. Being a small business owner isn’t easy and is a steep learning curve for many. You’ll need to be prepared to take risks, find and sign up clients and take responsibility for all your decisions.
Knowledge about your product and target market. If you want to build up a loyal client base, you’ll need to be confident in what you’re selling and have a strong awareness of who you’re selling it to, so that you can adapt to their needs.
Realism and objectivity. Some people view self-employment through rose-tinted glasses, but this won’t prepare you for the highs and lows that often come along with it. Be realistic and think about the potential downsides as well as the benefits.
Confidence in your decisions. Running a business can be lonely with few places to turn to for support.
Creativity and adaptability. You’ll need to be innovative and brimming with ideas to help push your business forward. It’s important that if one idea fails, you’ll have a new one at the ready.
Organisation. You’ll have plenty to co-ordinate when you work for yourself, such as developing the product or service you’re selling, marketing it and managing your finances. Ultimately the buck stops with you, whatever the task, so the more organised you are the less likely it is that something will slip through the net.
When you’re deciding whether or not to go self-employed, it’s also important to consider:
Whether you have the time and money to set up your business and can cope with having little or no income for periods of time. If you have a bad month or a slow start, then you aren’t guaranteed a salary, which can quickly start causing stress and anxiety.
Whether you have any life-changing events coming up that you’ll need to take into account, such as a new grandchild or a house move. If you know you’re going to be distracted in the near future, then it could be worth waiting until your new venture can have your full focus.
How you feel about losing employee benefits such as paid holiday, employer pension contributions and sick pay, and how this will impact you financially.
Whether you have a space to work in and can afford to buy the relevant equipment.
How you feel about the idea of managing the less glamorous parts of your own business such as completing tax returns, managing your budget and finding clients.
The pros and cons of being self-employed
In 2019, there were nearly 5m self-employed people in the UK (Office for National Statistics) and nearly half of these (46%) were over the age of 50. We all tend to know someone who’s taken the leap and decided to start working for themselves. But what does self-employment have to offer and what are the challenges?
The advantages of being self-employed
- You can explore something you’re passionate about, whilst (hopefully) making a living from it.
- You’ll be able to set your own daily or hourly rates – which has the potential to earn you more money. If you set up a trading business that does particularly well then this can offer significant financial rewards.
- You’ll have greater control over your own schedule, which can make it easier to fit your work around your other commitments, for example looking after your grandchildren.
- Many self-employed people work locally or from home, so you should be able to cut down your commuting time – or possibly cut the commute altogether.
- It can be very satisfying to watch your hard work pay off – especially when you’ve done it all by yourself.
- Self-employment is rarely routine as you’ll have the option to work with a number of different clients and on a number of different projects. So, if you’re someone who enjoys variety, then self-employment can prove very rewarding..
The downsides of self-employment
- Financial uncertainty – you may have little or no income at times, especially when you’re starting out and building a client base. Even when you do have an income, it may be irregular. This can be stressful when you’re trying to keep up with your business’s running costs, such as equipment, insurance, rent and so on.
- You may be required to work long and irregular hours to get your business off the ground. Self-employed individuals have to work hard to build a client base and to build and maintain trust with their existing clients and this can take some time.
- You may miss working in a team, at least while you’re first setting yourself up. Being self-employed can be lonely.
- Starting from nothing can be a long and tiring process. It’s important that you can persevere even when progress is slower than you would like.
- You’ll have a lot of responsibility as you’re ultimately in charge of everything from winning clients, to marketing your services, right through to things like National Insurance payments and completing self-assessment tax returns.
Getting started - choosing your business structure
There are many different types of self-employment and the one you choose will depend on how you want your business to be structured. Every business must have a legal structure in order to operate, with the two main options being a sole trader or setting up as a limited company.
We discuss both of these structures in more detail below.
Setting yourself up as a sole trader
Last year, there were an estimated 3.5 million sole traders in the UK. Being a sole trader is the most simple business structure there is and it essentially means that you own and run your business as an individual. There is very little paperwork to fill out – just an annual self-assessment tax return and quarterly Value Added Tax (VAT) returns if your annual sales of taxable goods exceed the £85,000 VAT threshold – and you will have more privacy than incorporated businesses because you won’t be listed on Companies House (as you would if you were a limited company). You will also retain all your own profits after tax, rather than sharing them across the business. Many people like the idea of becoming a sole trader because it can be easier to change your mind and back out of the opportunity if you decide that self-employment isn’t for you. You can simply stop trading and don’t have to go through the rigmarole of formally closing your business down. Some people set themselves up as a sole trader first and become a limited company later if things go well.
Whilst being a sole trader is an attractive business structure for many people, it does come with disadvantages. For example, your business will not be recognised as a separate legal entity, so you are ultimately responsible for all debts and liabilities. This means that if the business fails and there are debts to be paid, you’ll have to pay these back from your income and assets – even those not related to the business, such as your home. Sole traders also don’t tend to own the rights to their business name. So if someone else sets up a business with the same name, you could find yourself facing a legal battle to keep it.
It’s important to weigh up the pros and cons of becoming a sole trader before deciding whether this is the right business structure for you. To find out more, check out this guide from Gorilla Accounting.
If you do decide that you want to become a sole trader, then you’ll need to let HMRC know so that they can set you up to pay tax through the self-assessment system.
Starting a limited company
In 2019, there were 2 million limited companies in the UK. A limited company is essentially a business and legal entity that is separate from its owners and managers.l. Some people prefer this option because it means that if the business fails, they only stand to lose what they put into it and their personal assets remain completely separate.
Other advantages include:
- You may find it easier to attract customers, as some customers have more confidence trading with a limited company. This is often because limited companies are monitored more rigorously and have details and accounts published publicly – making them appear more transparent.
- You will have legal ownership of your business name, meaning that no one else can use it.
- You can sell shares to investors to raise capital and will usually find more opportunities to borrow money.Some banks will only lend money to limited companies and not sole traders.
- Potentially paying less tax because you won’t pay 20-45% income tax as you would if you were a sole trader. Instead you will pay 19% Corporation Tax on your profits and then the company can pay your salary through dividends, which are taxed at a lower rate than salaried income. Tax rules can be complicated and change often however, so it’s worth seeking professional advice from an accountant before deciding how your company should be structured. You can find a chartered accountant here.
As you might expect, owning a limited company also has some disadvantages. These include:
- Being listed at Companies House – which means that details of your company’s earnings and directors will be publicly available. For some people this may not be an issue, but not everyone likes having their details visible on the internet. You will also be charged an incorporation fee to register your business and file annual returns.
- There’s a lot of extra paperwork to get through, although you can choose to outsource much of this to an accountant for a fee.
- Your level of responsibility will be greater. Everyone who runs a limited company must comply with what is known as the Director’s Fiduciary Responsibilities. These outline what a limited company director is legally obliged to do. For example, they must exercise independent judgement and avoid or manage conflicts of interest which may affect their objectivity.
The government provides a helpful seven-step guide on how to set up a limited company, which can be found here.
Before deciding which business structure is right for you, it’s important to spend time weighing up the pros and cons of each. You may be in a hurry to get started, but the structure that you choose can have a significant impact on the success of your business. You may want to consider speaking to an accountant or a financial advisor who will be able to explain the pros and cons of each structure in greater detail.
Self-employment - can I afford it?
One of the biggest questions people often ask themselves when considering whether to go self-employed is ‘can I afford it?’ Below, we answer some of the most frequently asked questions regarding finance and self-employment.
How much tax will I pay if I’m self-employed?
The self-employment tax system is often a source of confusion for many – so it’s a good idea to try and get to grips with it prior to going it alone.
You’ll need to complete a self-assessment tax return after the end of every tax year (5 April) and you’ll have until 31 January the following year to submit this. When you fill your tax return in, there will be various expenses and allowances you’ll need to factor in to calculate how much tax you’ll pay. There are also business-related expenses that you’ll be able to deduct from your income amount when you’re calculating your taxable profit. Business-related expenses usually refer to all the basic things that are required to run a business, such as equipment, rent and telephone costs.
Some people decide to file their tax return themselves, whilst others pay an accountant to do it for them. This can help to free up time and ensure you don’t make any common tax-return mistakes. If you decide to hire an accountant, then be sure to go with someone reputable, as although it’s rare, there are scammers out there.
Whether you’re employed or self-employed, the tax bands and tax-free personal allowance remain the same. This means that in 2020-21, you can earn up to £12,500 before you pay tax. After this, you will then pay 20% income tax on income up to £50,000, 40% on all earnings between £50,000 and £150,000 and 45% on any earnings over £150,000.
Can I be employed and self-employed at the same time?
It’s possible that you may want to go self-employed on a part-time basis to test out your idea, whilst continuing to work for a company. In this situation you are both employed and self-employed and will be required to pay tax via self assessment and PAYE.
Some people also set up a limited company, however provide their services to just one single company. In this instance HMRC may want to check that you aren’t actually an employee that is using a separate company for tax reasons. It mostly only affects consultancy businesses who have one single customer or client for long periods of time. For more information you can read the government’s guidelines on how to work out whether you’re employed or self-employed. It’s a complex area of legislation called IR35 that HMRC has been focusing on recently so if you’re not clear on whether it might impact your activities, you might want to speak to your accountant to get more clarity.
Applying for financial help when you’re self-employed - what’s available?
When you register as self-employed, you may be eligible to apply for a number of benefits. It’s worth finding out whether you could be entitled to any of the financial support listed below.
Allowable expenses for the self-employed
When you start running your own business, you’ll be able to claim back the costs of the basic things that you need to run a business, such as rent on an office or retail space, as well as internet and utility bills. These will be deducted from your overall profit every year, meaning that they aren’t taxable. For example, if you made £35,000 last year, but you spent £5,000 on running costs, then you will only be taxed on the £30,000 (known as your taxable profit) – not on the money you’ve spent.
If you’re not sure which allowances are deductible, or how much tax you need to pay, it’s worth seeking advice from an accountant. You can find a chartered accountant via the Institute for Chartered Accountants in England and Wales (ICAEW) here.
You may be eligible to receive the New Enterprise Allowance from the government if you or your partner has been receiving Jobseeker’s Allowance, Employment Support Allowance or Income Support – or if you’re sick or disabled. If your application is accepted, then you could get an allowance of up to £1,274, with payments spread over 26 weeks.
Some local councils also offer self-employment grants to small businesses/start-ups – so it’s worth contacting yours to see if they can help.
And finally, it’s always worth using the finance and support tool on the government website, as this can give you details about organisations across the country that may be able to offer you financial support when going self-employed.
Universal Credit for the self-employed
Universal Credit is a government benefit designed to support people who are on a low income or out of work, and it may be able to help you while you grow your business. In order to receive Universal Credit, you must be able to show that self-employment is your main job/source of income, that the work is regular and organised, and that you expect to make a profit. These factors will classify you as “gainfully employed.” Once you are gainfully employed, you will be able to receive Universal Credit to top up your income without having to prove that you are looking for or available for other work. Learn more about how Universal Credit works in our article Universal Credit explained.
Working Tax Credits for the self-employed
It’s possible that you may be eligible for Working Tax Credit (WTC) when you’re self-employed, but you must meet some strict criteria in order to qualify. Your eligibility will depend on your earnings, your working hours and several other factors. As with Universal Credit you will need to be able to prove that your self-employed work is regular, organised and ongoing and that you are trading on a commercial basis with the aim of making a profit.
You can read more about the criteria on the government website.
If you’re self-employed and above State Pension age, then you may be able to receive Pension Credit payments. These payments are split into two types – Guarantee Credit and Savings Credit. Guarantee Credit is designed to help you tuck up your weekly income if it’s below a certain threshold, and Savings Credit is an amount paid to people who have saved some money towards their retirement (for example a pension).
Note: If you’ve reached the State Pension age on or after the 6 April 2016, then you probably won’t be eligible for Savings Credit. You can use the simple calculator on GOV.UK to check your State Pension age.
Find out more about Pension Credit in our article Pension Credit explained.
Housing benefit for the self-employed
Housing Benefit is generally being replaced by Universal Credit. However, you may still be able to make a claim if you’ve reached State Pension age, live in temporary or supported accommodation, or you’re entitled to (or receiving) severe disability premium either now or within the last month.
If none of these criteria apply to you, then you can apply for Universal Credit instead. If the criteria above do apply to you, then there will be some additional factors that will be considered when deciding on your eligibility for Housing Benefit, such as whether you live in the home or whether you have savings over £16,000.
The government will make a full-assessment of your individual circumstances before making a final decision. As with all the benefits above, you can learn more about the eligibility criteria for Housing Benefit on GOV.UK.
Other self-employment benefits
There may be additional benefits that you can claim in addition to those listed here, such as Income Support. However, this (and several other benefits) are now being replaced by Universal Credit.
Should I consider finding an investor for my business?
If you have a great business idea and a plan on how to execute it, but you will need a larger sum of money to get your idea off the ground, then it could be worth looking for an individual or company who would be willing to invest in your business. Businesses that are scalable or have a large market potential are most likely to appeal to investors.
Finding an investor isn’t usually easy and can take a fair bit of work. You may need to speak to a wide range of investors before you find the right one for your particular situation. Before pitching to any investor, you should make sure that you are established in some way, for example, that you have a name, a following and that there is room for your business in the current market. Your business plan should also be currently operating – even if it’s early stages.
Finding an investor can take months, so you’ll need to make sure you can meet your own personal financial needs during this time. You should also consider that an investor will come with terms and conditions and may want to be involved in some of the key business decisions going forward, so you may have to relinquish some control.
Before seeking an investor, you should first ask yourself whether you really need the money, or whether you can manage on your own.. For example, you might be able to do this by keeping your costs really low for a while and selling more, whilst you’re establishing yourself as a credible business. You may also have friends or family that could help you out financially if you’re really struggling – but it’s up to you (and them) to decide whether this is an option that you’re comfortable with and what terms and conditions it would come attached with.
If you exhaust all your options, or if you need a large amount of money to buy equipment for example, and decide that you would still like to find someone to invest in your business, then start by considering whether there is anyone in your network who would be interested in the opportunity. You could also try signing up to the Angel Investment Network, which brings investors and business owners together. You can create a basic account for free.
SEIS and EIS
It’s also worth taking the time to understand the various government incentives set up to help encourage investment into small businesses. For example the Seed Enterprise Investment Scheme (SEIS) allows small, young companies to raise up to £150,000 whilst investors receive 50% of their investment back as a reduction to their tax bill. They also offer further tax rebates should the company go bust to minimise an investors losses.
These incentives offer a powerful reason for investors to consider making an investment into a small business. For larger companies, there is the Enterprise Incentive Scheme (EIS) which operates in a similar way, but with a reduced 30% tax refund for investors, allowing companies to raise up to £5 million pounds in any 12 month period.
As you might expect there are various restrictions and qualifying criteria that must be met, but the schemes are hugely attractive and widely used as a way to encourage much needed investment into small companies.
You can find out more about using the SEIS on the governments website.
Self-employment and insurance
When you decide to set yourself up as self-employed, you will need to make sure that you have the right insurance in place to protect your business if anything goes wrong – for example, if your business premises become damaged or a client tries to sue you. The type(s) of insurance that you choose will depend on factors like the services you provide and whether you have employees and/or equipment or property belonging to the business. Some of the most common types of business insurance are explained below.
What types of self-employment insurance are there?
Protecting against liabilities – protection from legal action or compensation claims.
Public liability insurance
This can be useful in protecting you if a client becomes injured or unwell as a result of one of your services or whilst visiting your business premises. For example, this could include things like a client experiencing a reaction to some hair dye at your hair salon, to someone getting food poisoning at your restaurant. If this happens, they may try to take legal action against you. Public liability insurance will cover the cost of any legal fees or compensation claims made against your business.
Employer liability insurance
If you employ one or more individuals to work for you, then by law, you are required to have employer’s liability insurance. Without it, you could have to pay a hefty fine. This type of insurance covers you against work-related injury or illness claims made by an employee.
Professional indemnity insurance
There are certain services that may require professional liability insurance. People who tend to need this insurance usually provide advice services and are professionals such as financial advisors, coaches, lawyers and accountants. Professional indemnity insurance will cover you in the event that a client is dissatisfied with your service, for example, because they’ve been left out of pocket after taking your financial advice.
Protecting your assets - protect your business as you would your home
Buildings and contents insurance
If your business is your livelihood, then it’s important to protect it as best you can from loss or damage – in the same way you would your home. Damage could occur as a result from natural causes such as flood or fire, criminal damage or theft. Buildings and contents insurance will help you pay to replace or restore your business premises and/or it’s contents if things go wrong.
Personal insurance - what happens if a key member of my business dies or becomes seriously ill?
If you aren’t the sole owner of your company and it is split between a number of shareholders, then it might be worth taking out shareholder protection to protect your business in the event that a shareholder dies. If this does happen, then shareholder protection will allow you and the remaining shareholders to buy back shares from the beneficiaries of the shareholder who has died.
Keyman insurance is designed to protect your business in the event that a key member of the team dies or becomes seriously ill. If the business cannot function without the skills and know-how of that person, then keyman insurance will pay out to lessen the financial impact of them not being there. This money could help you to hire a replacement or make up any loss in revenue.
Protecting your money
Credit Insurance can protect your business if a client misses a payment – either because they can’t pay at all or just can’t pay on time. It means that your business can still continue without being affected too much by the missing payment.
Other types of insurance
As well as some of the more general types of business insurance above, it can also be useful to purchase insurance that is specifically tailored to your business type and covers everything in one policy. For example, specialist insurance for professional dog walkers or beauty therapists.
Once I’ve set up my business, how can I market my services?
First consider who you are targeting
It’s important that you think about who you are marketing your services to before thinking about how you’re going to market them. It can help to consider the following factors when you’re trying to work out who your target audience is:
- Where do they live? Is it a specific region or are you targeting people nationwide?
- Which demographic(s) are you targeting? (age/gender/occupation/income/education)
- What kind of personality does your target market tend to have? What personal values do they adhere to?
- What sort of lifestyle do your target market lead?
- Is your target market likely to be regular customers or do you offer a one-off service that clients are unlikely to need again?
Identify your Unique Selling Proposition (USP)
Before setting up your business, you should think about what makes your service different from those offered by your competitors. You need to find a way to stand out from the crowd by making your service as unique as possible. To do this it can help to start by thinking about what specialist skills and knowledge you have that your competitors may not and what you personally love most about your own products and services. In a highly competitive market, this could be innovative product features or specialist knowledge – for other businesses a key differentiation could simply be that you are the only shop for miles around. When you’re advertising your services, you should highlight these unique selling points as much as possible.
Develop your business brand
No matter what the nature of your business is, it’s likely to need a brand. Having a brand allows a business to connect and build trust in clients because the good service you provide becomes associated with your brand.This means that clients are a) more likely to stay loyal to your brand and b) they are more likely to use a range of different services offered by your brand.
A brand isn’t simply about having a logo or a tagline – it’s about having values and an emotional connection with clients that allows them to understand exactly who you are, what you stand for and what you’re promising to deliver.
Set up a Facebook page
Before you set up your business, it’s helpful to work out how you plan to start landing clients. One of the most common ways to start letting people know about your business is to advertise it on social media. Clients often prefer the person-to-person interaction that they get from social media business pages, rather than the business-to-person interaction that they may receive when they email a company or use their website.
Facebook is a great place to start advertising your services, because it gives you the option to create a free business page which clients can easily interact with and share with others. However, the easy part is creating the page – the harder part is to start drawing attention to it and help it stand out from the crowd. Facebook is a busy platform, so you’ll need to work hard at publicising your page to make sure that people know it’s there.
Here are a few suggestions that could help your page establish a presence:
- Invite people to like your Facebook page – as many as possible!
- Add engaging posts on a daily basis, that promote your services. You can encourage clients to respond to your posts by asking them questions. This is a good way to get a discussion going on your page and will also help you to find out more about your target audience.
- Facebook will give you the option to pay to boost your posts – so that they reach a wider Facebook audience. You don’t need to do this with every post, but it can help to boost key posts that are proving particularly popular.
- Consider creating some business-related content that you could share on your Facebook page, for example, a blog. If you want customers to keep coming back to your page and using your services, then you need to stick in their minds as much as possible. If customers become a fan of your regular content postings, then they are more likely to keep coming back to your Facebook page and will in turn, think of your business when they are in need of the service you offer.
Set up a website
Having a Facebook page is great for connecting with clients on a social level, but for credibility and professionalism, it can also help to have your own website. Once a person finds out about a company, it’s highly likely that they will then go to find the website to find out how legitimate and established they are.
Your website should include details about your services and may also include information about pricing, as well as examples of your work and testimonies from satisfied clients. It can be a great place to essentially create a portfolio of some of your best work. Clients will be much more likely to pay for your services if they can see evidence that others have been happy with the results.
If you’ve never built a website before, then websites such as Wix and WordPress can be great places to start. Both offer you the chance to set up a basic website for free. You can decide whether you want to pay for premium features once you are more comfortable with how it all works. It’s also a good idea to eventually purchase your own domain name, as this will also help improve your credibility.
Print brochures, leaflets and/or business cards
If you plan to predominantly offer your business services locally, then it can be worth creating some brochures, leaflets and/or business cards to put through people’s doors or post on community notice boards. Not everyone uses Facebook or social media, so there are clients that you might be able to land from using this traditional method that perhaps wouldn’t have otherwise known about your services.
As well as directly appealing to clients by advertising your services, it can also be useful to attend networking events that are relevant to the industry that you’ve chosen to work in. You can also reach out to relevant individuals/businesses via email or social media.
Having strong connections in the industry that you’ve chosen to work in (or in related industries) can help you land clients in few different ways:
- If you or a contact in your network find yourself with too much work (or with work that is perhaps too far out of the business’ catchment area), then you can make mutual client referrals.
- If you’re new to an industry, then you can learn a lot from individuals who have been doing it a long time.
- You may be able to collaborate with other people in the industry and share clients.
Word of mouth
Friends and family can be a great place to start if you’re looking for customers for a few reasons:
- Providing your service to friends and family can give you a chance to practice. If you’re particularly nervous about delivering a service well, it can also help you to build confidence before you start working with people you don’t know.
- Friends and family can help spread the word about your business. Even if your own personal network is small, you’d be surprised how quickly news can travel and reach new networks.
When you’re starting out, it’s important to nurture your first few customers as much as possible. The more they believe in you and what you’re doing, the more likely they will be to tell others about it.
Marketing - the importance of setting goals and a budget
When it comes to marketing your services, it’s a good idea to establish goals and a budget. This way you will be able to gain a clear idea about how much you’ll need to spend to land ‘X’ customers. Then if you increase your budget, you can work out how many extra customers you are likely to attract so you can plan accordingly.
Having a marketing budget can also help you to work out how much of your overall budget you are likely to have left for other running costs.
Hiring staff for the first time - where do I start?
Becoming self-employed doesn’t necessarily mean that you have to hire staff, as many people decide to work alone. However, if you are planning to build a team, then you may be wondering where to start.
Here are some of the things you’ll need to think about:
- How many employees you need and in what functions, with what skills? Ideally you should only hire staff that the business couldn’t function without to start with. You can always hire other employees later.
- How much you’re going to pay staff (this must be at least the National Minimum Wage).
You’ll then need to think about where you might be able to find staff. The most common way is to advertise vacancies on job boards – or you may be able to reach out to people in your own network who you already know have the relevant skills and experience. Before anyone can become an employee of your company, you must:
- Check whether they have a legal right to work in the UK.
- Check whether they need to apply for a DBS check, for example if the work involves working with children or vulnerable people.
- Make sure that you have employers liability insurance.
- Register as an employer for payroll with HMRC – you must do this four weeks before you pay new staff.
- Send details of the job offer and role to the person you’re offering it to, along with a written statement/contract of employment (this only applies if they will be working for you for more than one month).
- Check whether you need to automatically enrol your employees into a workplace pension scheme.
Monitoring and reviewing your business at regular intervals
For many people, becoming self-employed can be a steep learning curve so it helps to stop and review how things are going at regular intervals. This includes looking at how much you’re spending, what you’ve achieved and how you could make improvements to your service, whilst keeping within your budget.
It helps if you can be as flexible as possible and come up with new innovative ideas whenever a current idea isn’t working. You should also pay close attention to feedback – both good and bad – and work out how you can use this to drive the business forward. Often the most helpful insight into how to grow your business can come from customers who have taken the time to give you honest, sometimes painful, but constructive feedback.
If you’re considering self-employment, then you may already have an idea about what kind of services you would offer. However, if you’re looking for some inspiration, our article 20 self-employment ideas for over 50s could be a helpful place to start. From gardening to consulting – there are plenty of different ways you might be able to make self-employment work for you.
A final note…
Making the decision to become self-employed can be a huge step for many people, so it’s important that you’re realistic about what to expect and are honest with yourself about whether it’s something that will be a good fit for you based on your current circumstances. Not all of the information in this guide will apply to everyone – it will depend largely on the size and structure of your business.
Setting up your own business can give you a great deal of freedom or flexibility, but it can also be challenging, often with long hours and an irregular income,especially during the first year. If you’re unsure whether self-employment is the right choice for you, then it’s important to take your time and make sure that all decisions are fully thought through and considered, so you can be sure to enjoy the journey, wherever the destination may be.
Have you recently become self-employed? Is there any other advice that you would offer to others or would like to see included here? Email us at [email protected] or leave a comment below. We’d love to hear from you.