Working Life - Self Employment
The idea of becoming self employed often sounds appealing, particularly if you have been made redundant or have lost your job.
Although one of the main attractions of becoming self-employed is no longer having to work for somebody else, there are several disadvantages. These include not being certain of having a regular income, having to arrange your own sick pay and pension and probably having to work long hours.
If you want to go self-employed but can’t decide what to do you should think about all the hobbies and interests you have, could they somehow turn into an income or could they make you profit? For example, if you’re interested in fishing, why not set up a fishing shop? Retail ranks high on the kind of businesses that self-employed people tend to choose but there are others out there too including PR companies, car hire, private teaching etc.
Before you set up in your self employed venture make sure that you are qualified and be sure to update your skills if necessary. You might also benefit from taking a management course, computer skills course and a short accountancy course so that you can confidently deal with all the paper work involved in your own business.
The next thing you need to consider is how you are going to trade. There are three main categories here:
- A sole trader. This is the easiest way of going it alone.
- A partnership. This means that two or three people are involved in the running of the business. Often friends, colleagues or family members decide to go into business together but this can lead to problems in itself.
- A limited company. This gives the business a separate identity to the people who are running it and is far more difficult to set up.
Once you’ve chosen the type of business you’ll be going into, you need to think about finance. Getting a loan from a bank or building society is a big commitment, particularly if you don’t expect your business to start making you money straight away. Aside from bank loans you can also try one of the charitable trusts and organisations that can offer start up loans with less interest, or even grant awards that don’t have to be paid back.
If you’re thinking of self employment or starting from scratch and setting up your own business, you’ll be able to get a wealth of advice, including tips on money issues, from the Inland Revenue. The Inland Revenue will also need to put you on a different tax code as you will be expected to pay income tax on your earnings. If you don’t think that you can balance the books by yourself it might be worth hiring an accountant to help you with this matter.