It needs to be planned and thought through rather than just drifted into.
Here is a quick entirely informal list of the top five things you may want to think about before launching yourself as a self-employed individual or business person.
1. Build a business plan
Starting a self-employed business is easy but making a success of it is rather less so. For example, do you know:
- That your basic business idea is viable;
- How much start-up capital funding you are going to require;
- what your income projections are once the business is established;
- Just how you will survive financially in the early days when your business may be generating little or no money for you; etc.
All of these things and many others like them are typically considered to be part of a basic business plan. Many businesses fail simply because some of these things are not well understood and that leads to shocks and unpleasant surprises.
So, research all these things upfront and put them together in some sort of cohesive business plan statement. If you don’t really know what a business plan is, then find out !
2. Protect your financial interests and those of your family
Starting a business inevitably involves taking chances but they need to be managed risks rather than roulette-style gambling.
For example, as an employee, your employer may have provided a range of benefits covering you for things such as sickness and premature death. You might also have benefited from things such as private health cover.
Once you are self-employed, those automatic benefits will cease and you will need to think about providing your own – perhaps including:
- Income protection cover of a type provided by companies such as Drewberry Insurance;
- Life Insurance protection, arranged through a broker such as Reassured
- Private health insurance cover and possibly mortgage protection cover; etc.
3. Understand your legal and professional liabilities
Depending upon the nature of the business you start, you may have legal responsibilities to people such as HMRC (the tax office), the DWP and possibly Companies House in terms of filing annual returns.
Understand these in advance and don’t wait until you have fallen foul of regulations before you start researching what is required here.
4. Get a good accountant
Yes, it will cost you money each year but a good accountant might be worth their weight in gold in terms of helping you manage your business, keep certain reporting requirements under control and very possibly saving you a lot of money.
It is true that in some simplified company legal regimes you may not necessarily need to submit formally prepared and audited accounts but unless you are naturally gifted with figures, an accountant might still be useful in helping you keep a tight financial control over your affairs.
5. Learn about technology and marketing
Your customers are extremely unlikely to immediately lay siege to your front door on day-1 of your business.
In fact, the vast majority of potential customers won’t even know you exist unless you understand how to bring your business to their attention. So, learn something about the science of marketing or get help.
Finally, at the risk of stating the obvious, a huge chunk of business today is based around technology. So, if you are proud to consider yourself to be a techno-dinosaur, you are going to have to change and start to get to grips with the internet and related IT subjects!