5 Things You Should Think About Before Going Self-Employed

For a long time before going self-employed, I turned down good opportunities that would require me to be self-employed because the thought of it terrified me. I finally took the plunge when I realised I had two choices: I could stay in a job that didn’t challenge or interest me or I could go self-employed and write for a living.

Here are five things to consider if you’re thinking about going self-employed, or you’re afraid to take the leap.

It’s Nowhere Near as Scary as You Imagine

Really, it isn’t. Gone are the days when your tax return is a 50 page form with an accompanying 200 page booklet of notes that you barely understand. Now it’s all done online where the system skips all of the questions that aren’t relevant to your circumstances and the notes are shown in a little box when you hover on the “?” icon, meaning you only see the notes relevant to the section you’re on.

Don’t let this fear hold you back like it did me, it really isn’t anything to be scared of. There’s loads of easy to understand information on the government website, and if you’re still convinced you won’t be able to make sense of it, you can always hire an accountant.

You Need to Be Organised with Your Incomings and Outgoings

Even if you choose to hire an accountant, you need a system in place to track what you earn and your business expenses. Business expenses include things like staff wages, software, marketing and your business premises, and don’t cover personal expenditure.

Keeping track of your finances doesn’t have to complicated and you don’t need a fancy accountancy program. I use an Excel spreadsheet where I have a page for income, and a page for outgoings. Just remember to update it regularly and keep all of your receipts and client invoices.

It’s also a good idea to know roughly how much you are earning each month and put approximately 20% of that to one side to make sure you have enough to cover your tax bill. If you do this religiously each month, you will have more than you need to pay the bill because you are entitled to part of your earnings tax free (it’s currently £11,500). This means you won’t be hit with a bill you can’t pay.

You Will Need a Plan In Place for Low Months, Sick, Holidays etc.

Obviously as someone who is self-employed, you won’t be paid for your holidays and you won’t get company sick pay if you are ill. This means you need a plan and/or some savings in place to cover any time you will be taking off from work. It also means you will need a back-up plan and/or some savings to cover any low months you might have.

If you don’t yet have any savings and are still confident that now is the right time for you to go self-employed, then make sure you are putting some money away each month to build up a pot to cover things like this.

You Have to Be Self-Disciplined

Depending on the type of work you do, you will likely have deadlines that are agreed between yourself and a client. No one is going to be there pushing you to hit that deadline, but if you don’t (without a damned good reason) then it’s unlikely that your clients are going to stick around. It’s important that you are someone who is disciplined enough to know what needs doing and get it done without a manager hovering over you all of the time.

In some ways, I’m glad I waited until my thirties to make the jump to self-employment, because I was nowhere near disciplined enough to do this in my twenties and make it work. That’s not to say that you won’t even if you’re only in your twenties. This is about knowing yourself and knowing whether or not you are motivated enough to push yourself – even on days when you might not feel like it.

Not Having a Safety Net is Both Motivating and Strangely Freeing

Following on from above, everything is on you now, and while that should make you feel pressured and worried, it actually has the opposite effect. It makes me feel strangely free. I know now that whether I make it or not is down to me and only me. I know that I stand or fall on my merit alone. And I like that.

I also find that knowing I’m working for me, not working to make someone else money, keeps me really motivated in a way that working for a salary just can’t.

Are you thinking of going self-employed? Is there anything that puts you off? Do you have any tips to add for someone who wants to make the leap? Let me know in the comments 🙂

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