Considering Becoming Self Employed

Pennywise

Don't underestimate the number of hours you'll have to work and the costs you will have to incur by being self employed. Of course, all businesses are different, but the common issue I've seen with virtually all my clients is that they grossly underestimate their costs.

I have my own accountancy practice, and I have to charge my time out at £90 per hour to give me an income that's equivalent to what I'd have earned had I gone into teaching instead (my plan B career choice had accountancy not worked out!), without any of the benefits such as paid holidays or pensions. That's due to the sheer amount of time I have to spend on non-chargeable work, such as courses, administration, legislation and rule changes, not to mention the huge costs or running the business which amount to over £20k per year for a one man band with a small office.

You need to plan for at least 6-12 months of the business not generating an income for you, so you will need plenty of savings to tide you over until it starts earning enough to pay you.

takman

Smiley87 wrote: »

I hope your website problems get resolved soon. Is it a well know company that you're using or small businesses? I'm only asking because I'm looking into websites and the costs related to them to include in my sums.

This is why you should always learn to make and run websites yourself. It really isn't that difficult and there is loads of information available online how to do it. So people end up spending thousands of pounds a year on websites when actually you can have one for a few pounds a month if you do it yourself.

Undervalued

takman wrote: »

This is why you should always learn to make and run websites yourself. It really isn't that difficult and there is loads of information available online how to do it. So people end up spending thousands of pounds a year on websites when actually you can have one for a few pounds a month if you do it yourself.

Yes and no.

I would find the mechanics of it fairly easy but I have zero artistic or design ability. If I wanted something that looked right and wasn't just an adaptation of a template or somebody else's site I would at least need some help in that area.

Like everything there is a balance but sometimes the phrase "each to their trade" is valid.

Smiley87

Mersey wrote: »

Some entrepreneurs also offer drop in clinics which are free (one in my city operates out of the library for 2 hours per week).

Thanks for this info Mersey! I've signed up to a few business hubs and also seen that a few local companies meet up once a month for a chat somewhere fairly local to me. I wasn't aware about this though, so it's on the research plan for this week.

Smiley87

Pennywise wrote: »

I have my own accountancy practice, and I have to charge my time out at £90 per hour to give me an income that's equivalent to what I'd have earned had I gone into teaching instead (my plan B career choice had accountancy not worked out!), without any of the benefits such as paid holidays or pensions. That's due to the sheer amount of time I have to spend on non-chargeable work, such as courses, administration, legislation and rule changes, not to mention the huge costs or running the business which amount to over £20k per year for a one man band with a small office.

You need to plan for at least 6-12 months of the business not generating an income for you, so you will need plenty of savings to tide you over until it starts earning enough to pay you.

I've planned to put a percentage of my wages away each month for the next year to cover this. If it's not where I'd like it to be then I'll stay employed until I've got my savings safety buffer.

What were the biggest costs for you when you started?

takman

Undervalued wrote: »

Yes and no.

I would find the mechanics of it fairly easy but I have zero artistic or design ability. If I wanted something that looked right and wasn't just an adaptation of a template or somebody else's site I would at least need some help in that area.

Like everything there is a balance but sometimes the phrase "each to their trade" is valid.

Personally i'm not very artistically minded either. So in the past when making websites i have asked someone i know to come up with a good design and send me a picture of what they think a good website would be. I then chopped up the image into the individual elements that i needed and make it into a functioning website.

So yes i agree it's always good to get help to make it exactly what you want but that doesn't have to cost money (sometimes nothing at all) and doesn't have to stop you doing it at all!.

Pennywise

Smiley87 wrote: »

What were the biggest costs for you when you started?

Very little really as I made the mistake of starting out on a shoestring, i.e. using my existing elderly computer, buying a cheapish inkjet printer, using the existing dial up internet (broadband was very expensive in those days), using free software, using my home phone instead of getting a second line installed, working from a spare bedroom instead of renting an office, creating my own amateur website rather than getting one made professionally, not paying for decent advertising, etc.

All sounds good in theory, but a nightmare in practice simply due to the sheer amount of time wasted. My start-up was severely compromised by trying to do it on the cheap. Stupid thing was it was never planned to be some part time hobby business - my intention was always for it to be my full time job ultimately growing with staff etc. I spent a couple of years as a busy fool, spending little, but earning nowhere near my potential due to not getting enough of the right kind of quality clients.

I had my eureka moment when my son was born and we needed the spare room. I rented an office, bought new computers, new printers, got broadband, got a professional website, did some professional marketing, bought proper specialist software, and the business took off, made possible because I had a lot more time to devote to revenue generation because I wasn't held back by inadequate equipment, premises, software etc. There was no particular area of high cost - it was very much lots of smaller amounts in all areas, from insurance to bank charges, from trade waste removal (yes the law for even small office based businesses) to subscriptions. It all mounts up.

Smiley87

Pennywise wrote: »

There was no particular area of high cost - it was very much lots of smaller amounts in all areas, from insurance to bank charges, from trade waste removal (yes the law for even small office based businesses) to subscriptions. It all mounts up.

How much would you say, roughly, that it cost you to do everything? There's some additional things that we would need to start our business, but a rough estimate of your costs would help us greatly.