It’s no wonder that more and more individuals are choosing to become self-employed. It can provide you with the freedom to work wherever and whenever you want, lets you cut out the dreaded commute and enables you to become your own boss. In reality, however, there are still a number of challenges that come with being self-employed.
In particular, there are few aspects of self-employment that you might not expect if you’ve spent your entire working life in a traditional nine-to-five job. Even if that is the case, however, there are ways to overcome any potential hurdles. So, here are some important consideration to bear in mind as your start your self-employment journey.
The legal stuff
Although it may not be very exciting and you might find it something of a chore, make sure that you take the required legal steps to register yourself as self-employed. This process will vary depending on where you are working from, but it is your responsibility to find out which government department is responsible for dealing with self-employed workers.
Being in self-employed also means that you are legally required to fill in a self-assessment tax return at the end of the financial year, so keep track of your income and business expenses. Even if you decide to use the services of someone else to prepare your tax return, you will still need to provide detailed accounts and receipts.
Another factor that you must consider if you are to succeed in being self-employed is how to source steady work. Unlike a traditional job role where your employer would give you tasks to complete, you will be solely responsible for seeking work, and once you’ve completed a project or task you’ll have to do it all over again.
As such, make sure you set aside a certain amount of time each day in which you pitch clients and network for future work. You won’t be paid directly for seeking out work, which can make it a bit of chore, but it is certainly necessary. Although the odd period of downtime can be nice, long stretches without work can be very bad news indeed – particularly for your finances.
As you can work at any time of day or night, you would think that time management would be relatively straightforward for self-employed workers – but this is not the case. In fact, all that freedom means there can be a temptation to put off work, thinking “it’ll get done later.” What’s more, you’re also likely to have multiple projects on at one time, all from different clients and with differing deadlines.
Managing your productivity and time management, therefore, can be a challenge. In order to make the most of your working hours, try to settle into a routine and put together a simple plan displaying all your upcoming deadlines.
When you’re self-employed there are a number of financial matters that you have to take care of that would normally be handled by your employer. Firstly, you’ll need to set aside some money for that aforementioned tax bill. Keep a track of your earnings, extrapolate them forward to cover the financial year and put money into a separate bank account to be used to pay your taxes.
You should also remember that as a self-employed worker you may be able to claim tax back on certain items that you are using for your work, including utilities and other justifiable expenses. Finally, if you are expecting to be self-employed for a long period of time, then consider creating a personal pension plan for when you eventually decide to retire.
When you’re sat at home all day at your desk with your television tempting you from out of the corner of your eye, it can be difficult to motivate yourself to work, even with bills to pay! If you’re struggling to get yourself going, make sure you eliminate all distraction from your work area.
Furthermore, look into co-working spaces located nearby. These give you an opportunity to meet other fellow self-employed individuals and provide an inspiring place to work that doesn’t suffer from the familiarity of your home. This approach will make being self-employed feel a little bit more like “normal work,” but with a key difference – you choose your hours and your workload.
Marketing may sound like the sort of thing carried out by huge businesses, but it is equally important to self-employed workers. Creating your own website is a great first step as it allows you to share contact details, your previous work and a bit of your personality. Similarly, creating a social media profile and engaging with relevant accounts also works well. You can’t be a successful freelancer if potential clients don’t know you exist, which is why marketing is so vital.
Photo Credit: Max Pexel