The Great 'Working for Yourself' Hunt

I put away 30% of everything I earn when it comes in. This has covered all of my tax & NI bills comfortably so far. Make this money work hard for you by using your (and your OHs!) ISA allowances. If you can time it right a regular saver to pay out just before your tax bill is due would also make the money work hard.

Save receipts for everything. You never know when the tax man may want to see them.

Be fair about what you claim and be prepared to explain why you claim it. I claim 3/7 of my electricity, gas and water bills as I work from home 3 days a week. I also claim for part of my mobile and broadband costs plus a nominal amount to cover home insurance. However, I don't take the p1ss as I'd rather be reasonable and pay a bit more tax up front than get investigated and end up paying it anyway, plus interest.

Get yourself some good advice, especially on tax issues. And do speak to HMRC. Their guide to working for yourself is quite straightforward.

I have been self-employed for nearly 15 years (yikes!!) and I must agree with daddygez that you should always put away some money (preferably in a separate account) to save up for your tax bill!

When the bill comes you'll be so glad you did and if the bill is lower than expected you get some 'leftovers' to use for something else instead!

My other big tip is to seriously consider registering for VAT - the paperwork is not really as bad as it seems and if you spend alot setting up and in regular expenses such as petrol - then getting the VAT back each quarter can be really helpful!

I put away the VAT each week (in my 'VAT' account) so that I have it ready to pay with the VAT return. If I am due for some VAT back then the money I've put away will go towards this and I have to wait less time for the Taxman to pay out :-)

I think, having been self-employed for seven years, that anyone going into business for themselves should have to do a small business course first, but since they don't exist, then it's probably going to be DIY.

- For me, the most important thing to have before thinking about starting a business is a break-even spread-sheet. In this, you put all your costs (rent, insurance, equipment, utilities, your salary - everything) and you work out, over perhaps 50 weeks of the year, how much you have to bring in to pay for this, including tax. Then you add in how you are going to create this income and the costs (COGS - costs of goods & services) associated with this, so for me as a photographer, I put in x number of weddings, x number of portraits, x commercial jobs and the average sales I expect in each. Divide by 50 (weeks) and it will tell you how much income/turnover you need every week to pay the bills & yourself a salary. It's a bit like doing Martin's budget, but also working out the income side of things as well.

The great thing about this spreadsheet is that it will help with your costings. If you're quoting on a job that will take you three days to complete, then it needs to be bringing in a sale of three-fifths of your weekly break-even target, or you are losing money. (If you're consciously making a decision to give a foot-in-the-door deal to a potential big client, that's fine, but just be aware of what you're doing and how difficult it may be to return to your usual pricing).

(PS If you think you're a 'creative' & don't 'do' spreadsheets, then guess again. Spreadsheets are some of the most creative playgrounds you can ever have - tweaking your cashflow, finding out what happens if you raise your prices by 3% or 10%, how can you reduce your COGS - it's brilliant fun).

- After this, having a marketing plan. Who are your target customers? (It's never 'everyone'). And start out trying to spend nothing on advertising/promotion & see how far you can get - it makes for creative thoughts. The guerrilla marketing books are a good start. Also Michael Port's 'Book Yourself Solid' for service business is a really helpful, nuts & bolts read. And never underestimate branding - who you are & the way your business operates - it's key to selling yourself. Another book - The Personal Branding Phenenomenon by Peter Montoya is brilliant at helping you work out what is special about 'you' (& therefore your business). Get inside your clients' heads & keep asking yourself what their needs & aspirations are; what new products could you create & sell them. Also, every time you have an interaction with a business, what is it like & how could it be improved? (For example, think about all the differences between being a customer in, say, Liberty's and Lidl). Where are you going to be on that continuum?

It also needs to adapt - if you're selling nuts, bolts & widgets and suddenly the bottom drops out of widgets, you need to work much harder with the nuts & bolts, possibly companion selling washers, offering a customisation service, selling additional items that will appeal to your existing customers, forging new markets, finding new avenues of selling etc.

- Businesslink has lots of courses (free in London) and is a great starting resource for setting up in business and the British Library has a great business section where you can also research sectors/industries.