Starting your own business can be extremely exciting but it isn’t without its challenges. Being your own boss is certainly one of the most appealing things about being self-employed, along with other pros including being able to choose your working hours and taking holidays whenever you want, there are also a few obvious cons such as no sick pay, a lack of job security and having to manage your own accounts.
More and more Americans are recognizing the benefits of being self-employed and there are a few things that you can do to make being self-employed far easier and more enjoyable and we are going to take a look at the top three now.
- Register Yourself as Self-Employed
One of the first things that you will need to do is register yourself as being self-employed and this is something that is legally required. You will need to get your Employer Identification Number (EIN) that is also commonly called a Federal Tax Identification Number, as this will be used to identify your business. You can apply for this number online for free through the Internal Revenue Service.
Anyone who is self-employed will need to pay self-employment tax (SE) and income tax. SE tax covers you for Social Security and Medicare taxes, while the income tax is also necessary but is separate.
- Insuring your Business
As someone who is self-employed, you will also legally need to take out insurance to cover your business. This can cover you for a number of eventualities and will act as a financial safety net in the unfortunate event of something unforeseeable occurring such as an accident. Common types of insurance that many self-employed workers take out include Product Liability, General Liability and Professional Liability along with Commercial Property and Home Based Business Insurance.
- Getting the Necessary Tools
From airports to zoo’s, every business both small and large has its own unique tools and practices required in order for their company to function efficiently, and this is no different for the self-employed. Those in the logistics industry for example will need vehicle management software in order to track drivers and deliveries, with those in the food industry having to rely on temperature management technology.
Good accounting software however, is the common denominator that no business can do without. Keeping accurate bookkeeping and tax records is essential for a self-employed business owner as it not only allows you to keep on top of your payment commitments, but allows you to track the areas of your business that are both exceeding and underperforming. Enabling you to develop the most profitable sections of your business over time.
Being self-employed has many advantages and the best way to ensure that you enjoy working for yourself is to get everything set up correctly from the start by following the above three tips.
