Is self-employment right for me?
Setting up your own business is no easy task, it’s not for everyone and there is no bible that tells you what you should and shouldn’t do. It takes hard work and resilience though for me the benefits are all worth it.
To decide if self-employment is right for you, you’ll need to carry out extensive research. While running your own business provides many advantages, striking out on your own requires tenacity and hard work.
While self-employment may be an appealing career path for some enterprising individuals, it won’t be right for everyone. Before starting a business, you’ll need to weigh up your options and calculate whether you can afford to take the risk of setting up a new business.
Self-employment vs employed
A person is self-employed if they work for themselves as a business owner or freelancer. They run a business themselves and are responsible for its success or failure.
If you’re self-employed you don’t work for a specific employer who pays a consistent salary or wage like an employed person does. You also don’t have the same employment rights and responsibilities as employed workers.
However, it is possible to be both employed and self-employed at the same time. You could for example work for an employer during the day and run your own business in the evenings and on weekends.
Self-employment isn’t for everyone, some people are very happy being employed, going in, doing their job, getting a monthly salary, going home and forgetting about it.
To help you decide here are some of the advantages:
- Creative freedom – By going self-employed you’ll oversee the decision-making. You’ll have the freedom to explore several creative solutions to problems that arise and have the satisfaction of seeing your ideas through to completion.
- Independence – As well as creative freedom, you’ll also be able to set your own hours and fit your work around other commitments, which often leads to an improved quality of life.
- Job satisfaction – Reaping the rewards of your hard work can be very satisfying, while you also have the autonomy to do the things you love most.
- Location – Working from home, if applicable, means that you don’t have to worry about office politics, company hierarchies or an expensive and stressful daily commute.
- Salary – Your earning potential is much higher when self-employed – everything is in your hands, meaning you can take on more work at various times of the day. Financially, the sky’s the limit.
- Variety – As you’re in control of your workload, you’ll have the opportunity to work on a range of projects with several clients and develop new skills. You’ll also gain experience in the different areas of setting up a business, including overseeing the finances and administrative work.
Plus, some of the disadvantages too:
- Lack of employee benefits – You won’t get sick pay, holiday pay or any other employee benefit.
- Long hours – Your working day may be much longer and more irregular than someone who isn’t self-employed. Business commitments may mean that you spend less time with your friends and family, or struggle to switch off from work life.
- Responsibility – You’re in charge of your pension, National Insurance and completing your self-assessment tax return – what’s more, you’ll pay tax even if your business makes a loss. The fact that success or failure is down to you can increase your stress levels.
- Social isolation – You’ll miss out on the workplace environment, at least while you’re establishing yourself as a business owner. Not only can this be lonely, but it’s likely you’ll also have to work harder to stay motivated.
- Starting from nothing – Establishing your business and building a client base can be a long, tiring and at times frustrating process. You’ll need determination to succeed and perseverance, even if progress is slow.
- Unpredictable finances – Your income can be irregular, especially in the early days. You could go several months without earning a profit, and you’ll always have to pay running costs such as rent, insurance and internet access.
Take time to consider and weigh up the pros and cons for you, knowing your personal circumstances. Talk it through with your partner and your family, it’s vital that they support your decision too – I promise you will need all the support you can get.
Is now a good time for self-employment?
When considering whether now is a good time to become self-employed or freelance, you’ll also need to consider the economic impact of COVID-19. You will need to think both about the industry you’re thinking of entering and on the economy. You’ll also need to think about how quickly your industry is recovering or is predicted to recover.
If you are planning to start a business, it’s more important than ever to conduct extensive research and seek as much professional and personal advice as possible. Speak to those who are already self-employed, especially if they work in the industry you’re planning to enter. How has their business been affected by COVID-19? Do they expect it to recover and how quickly? What impact has running a business during a pandemic had on their personal lives, their finances, and their mental health?
Skills to succeed in business
Success as a small business owner largely relies on the strength of your product or service. However, you must also possess the following qualities to thrive:
- Creativity – You must be innovative, imaginative and have the initiative to push your business forward with new ideas. You’ll also need drive, determination, and enthusiasm to make them reality.
- Knowledge – Having a strong understanding of your market and customer is vital, while the willingness to listen and adapt to their ever-changing needs is also key.
- Leadership – Owning and developing independent projects, as well as managing a team, should come naturally to you.
- Organisation – You must be focused and goal-orientated, able to set clear and realistic objectives. Working well under pressure and having strong time management skills are also important.
- Self-belief – You’ll need the confidence to take risks and responsibility for your decisions, as well as the appetite to network with individuals and other organisations.
5 signs you’re ready to start a business
There’s no ‘right time’ to go self-employed. You’ll develop skills and learn as you go along – but if you’d like some reassurance, you might be ready once you’ve:
- mastered a professional approach – When starting a business, you need the confidence and motivation to market yourself from day one. Many think that charging a reduced rate or offering to work for free is what’s required to build a client base. We would remind you that the work you’re doing will still add value to your client’s business or project and you should be compensated for this.
- found a unique selling point (USP) – One of the biggest misconceptions about self-employment is that to be successful a business must be started by an entrepreneur with a big idea. Having the right skills, passion and business acumen are more important factors for finding success.
- developed excellent organisation skills – Taking control of every aspect of your business is no mean feat. By creating a long-term business plan, or a weekly to-do list, you’ll have a clearer picture of where your business is heading.
- demonstrated resilience – Starting your own business doesn’t happen overnight and will require months – sometimes years – of hard work, and a thick skin. It’s a slow process, and you may encounter rejection from clients along the way, which can be disheartening.
- gained the confidence to build a client base – Building up a network contacts are crucial for establishing a client base – as daunting as it may seem. You’ll need the motivation, confidence, and enthusiasm to be looking for potential opportunities at every turn when you’re starting out.