The Great Hunt: Help for those thinking about self-employment
Options
Comments
-
I started to work for myself when I was made redundant, again, over 8 years ago and haven't looked back. I had been planning to do this at some stage, but not for a few more years. The redundancy money gave me the security to try it for a few months before making a final decision on whether to stick with self employment or look for a job again. I also signed on to get national insurance for the first few months before I got my first client.
It took a long time (about 8 months) before I landed some good clients. This is probably because I was made redundant very suddenly and had no time to prepare for it.
The key to my survival in self employment was networking. Almost all substantial pieces of business have come through contacts I had made long before I left my last job. At that time they were just people I had worked with, now they are valuable business contacts. My advice is to let everybody you can think of know that you are now self-employed. Find them on LinkedIn and re-connect.
Also, don't be afraid of HMRC. I went to one of their work shops when I first started. That was very useful. They have always been very helpful when I phoned them to ask a question.
I can't imagine going back into employment again. I'm probably unemployable by now. I don't really like being told what to do. :-)
Yes, the income is not as regular and I do worry when I'm not so busy. I always try and save as much as I can when I have the income. This provides the safety cushion for leaner times.0 -
One major factor to build-in to your income budget, is to allow for your business to grow whilst your income is minimal from the outset. For myself. I started my business about 18 months before the recession started, and at that point I allowed 3 months of reserve money in my account to pay for outgoings that are on Direct Debit and for everyday-life essentials - but knowing that my business was going to be receiving instant payments for work done meant I wasn't at the mercy of those (businesses) who would like to defer payments to me for eg. 60 days!
However, you may wish to be more cautious and have a reserve bank account of 6 months money to live on......just in case!
Fortunately I had a house that the mortgage had ended a year or so previously.
I too would NEVER go back to my former employed life (in Retail Management) or any other unless I was dragged screaming! - and regret not taking the plunge sooner.
Good luck to all!0 -
Remember
Get the Work - The whole advertising marketing getting out there thing.
Do the Work - Well. Look for extras to give that don't cost you much.
Get paid for the Work - Create a credit policy. Who do you give credit to, how long, etc. Do you have a purchase order or proof of a purchase in writing or other paperwork in case you have to chase them or worse go to court to get your money.
Keep records - Particularly financial records which are vital. Most people ignore financial records, receipts, payments, who owes money, etc. This is the lifeblood of your business so you need to take an active interest in the finances even if it scares you, otherwise how will you know if a job makes a profit or a loss. It may seem that you have made money but if you factor in your costs, time, travel, purchases, etc., you may not be making as much as you think.
Learn about tax for small businesses. Accountants can help but many just keep your books and don't advise you on the many ways to reduce your tax or how best to use your money. You would expect them to advise but some just sort through a mess of receipts (the more messy they are the more it will cost you for them to sort them for you - you have been warned), balance you books, print off the results, and leave it at that. No tax advise, no warning that you are running at a loss, or ways to improve your cash flow, etc. They do a great job but it is your business and these are your decisions so you need to have an understanding of the basics to make sure you are getting the best deal. (Try reading a few books on tax and accounting for small businesses).
As a business consultant and mentor I always advise that you remember to work ON your business (the admin - invoicing, book keeping, marketing, etc.) as much (if not more) than you work IN your business (doing the job you love). Remember you are now a business person running a business for profit rather than what you business function is - photographer or whatever. It is a mind-set but an important one to keep you focused on the realistic practicalities of running a business rather than being a photographer.
Hope that helps. Oh by the way, I have been self employed for nearly 20 years and it is great - as long as you survive and can pay the mortgage and have fun at the same time.0 -
A couple of thoughts on the marketing front from a consumer:
Running competitions and freebies is a great way to get your name known. I'm one of the thousands of people who does "comping" on Twitter, Facebook, etc on a regular basis. Often the prize is something relatively low value and easily posted anywhere in the UK - say a nice photo frame or album, or £20+ vouchers for Amazon or one of the high street stores. Participants need to retweet or share the competition entry and this spreads the word about the business. I have become aware of and subsequently purchased from businesses as a direct result of entering a competition or giveaway so it does work. Check out the competition forums here for more info or just do a search for #win on Twitter to see how it works.
Also look at collaborating with other small businesses in the wedding industry in your area such as hotels, florists, bands, hat hire, bakers, etc and cross posting / sharing / following / retweeting their information on your social media.
best of luck0 -
We're well in to our 4th year of self-employment. We haven't starved yet.
I think for a small business to be successful, both you and your spouse must be behind the idea 100%. If the spouse can continue working while the business is in its early days, so much the better.
And having a profitable business is only half the story. You can have a business that returns good profits - but if the amount you can take out of the business isn't enough for you to meet your living costs then it's going to fail. You need to pare down your living costs to the absolute minimum (this is where having your spouse on board becomes vital).
When most people write a business plan, they start with their idea, then work out how much it will cost, then how many units they can sell, giving a profit of X.
I do it the other way round. Start with how much you need to make to cover your basic living costs. Then work out how many thingummyjigs you would have to sell in order to make that level of after-tax profit. Then ask yourself if it's reasonable to expect to be able to sell that many thingummyjigs (factoring in the cost of sales).
To give you an idea of how quickly a reasonable turnover is reduced down and down and down before it comes to you as money that you can actually live on - our turnover in the 2013/14 tax year was £306,000. Our 'take home' pay was £46,000 each. The £214,000 difference was used up in salaries, tax, replacement toner cartridges, accountancy fees, insurance, web hosting, paper, travel, bank account fees, postage. Etc. Etc. Etc.
I'm not in anyway saying to anyone that they shouldn't do it - but I am saying that you should do it with your eyes very wide open.No longer a spouse, or trailing, but MSE won't allow me to change my username...0 -
If you're setting up a social enterprise (a business or organisation who aims to help society - both for-profit and not-for-profit), then the foundation that I work for have tons of advice and help in getting you started and sustaining yourself and your business.
https://unltd.org.uk/0
This discussion has been closed.
Categories
- All Categories
- 343.6K Banking & Borrowing
- 250.2K Reduce Debt & Boost Income
- 449.9K Spending & Discounts
- 235.8K Work, Benefits & Business
- 608.8K Mortgages, Homes & Bills
- 173.3K Life & Family
- 248.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards