They say that in times of economic uncertainty the levels of self-employment rise. While this may be open to debate there is certainly strong evidence to suggest it’s been true over the last decade or two.
In figures published by the Office of National Statistics the number of self-employed people in the UK rose by around 730,000 from 3.8 million to 4.6 million. Even more remarkable was the differential between those choosing part time over full time self-employment with the former growing by 88% and the latter by only 25%.
This statistic does give an insight into one of the key reasons why so many people favour working for themselves and that’s the flexibility that it can offer. As your own boss you’re free to set your own hours, take holidays whenever you want and generally be more in control of your destiny. In many cases the rates you can charge as a freelancer can also be considerably higher than a salary that you would receive so, in effect, you work less for the same money.
However, it’s also self-evident that the more people who are setting up on their own, the more competitive the market will be so it’s essential that any business that you start or run is robust in every respect.
The first of these is having a reliable customer base because, without this, no business could possibly survive and another is to ensure that the business is run as efficiently as possible.
One of the first things that any self-employed business owner will tell you is that your skillset has to expand rapidly once you start being responsible for your own destiny.
So you need to be on top of everything from invoicing to stock management – tasks which when you were an employee were probably taken care of by someone else.
There’s also a certain amount of red tape to be attended to by any business. This can include preparing quarterly VAT returns if you’re registered, filing company accounts if you decide to enjoy the advantages of becoming a limited company and many more. Generally an accountant will handle these for you but there are other things, such as insurance, that you’ll be responsible for yourself.
There are a number of specific business insurances that are essential depending on your type of business. For example if you provide any kind of service then professional liability insurance is a must. This covers you in case you are negligent or make a mistake that costs your customers money.
This is separate from the perhaps more widely-known public liability insurance which covers you in the event of causing an injury to others in the course of your work.
If you employ people, even on a part-time basis, by law you also need employer’s liability insurance to compensate them in case they are injured while working for you.
Then there’s the buildings and contents insurance for your premises, motor insurance for your vehicles – even travel insurance if you or employees need to go away on business. These may all seem like a great deal of hassle they are all important and failing to have them could lead to some serious consequences.
But, for many, the benefits of self-employment greatly outweigh the other considerations that running your own business can involve and, once they have worked for themselves, most people find it difficult to imagine becoming an employee again.
It’s just important to ensure that the business is sound, well-run and properly insured. Then the rest should then just look after itself.
