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  • FIRST POST
    • MSE Martin
    • By MSE Martin 12th Feb 08, 4:12 PM
    • 8,111Posts
    • 42,248Thanks
    MSE Martin
    The Great 'Working for Yourself' Hunt
    • #1
    • 12th Feb 08, 4:12 PM
    The Great 'Working for Yourself' Hunt 12th Feb 08 at 4:12 PM
    Working for yourself gives you flexibility and independence, yet giving up a salaried job can be a serious financial jump. I’d like self-employed MoneySavers to share their advice on saving money while being your own boss.

    What issues have you found and what advice would you give others who want to ditch the day job? From setting up your own website to sorting your taxes, I want to compile a list of all your top self-employment tips.

    Please post below to contribute your ideas.

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    Last edited by Former MSE Wendy; 12-02-2008 at 5:41 PM.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.

    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.

    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
Page 1
    • Savvy_Sue
    • By Savvy_Sue 12th Feb 08, 5:53 PM
    • 39,182 Posts
    • 36,095 Thanks
    Savvy_Sue
    • #2
    • 12th Feb 08, 5:53 PM
    • #2
    • 12th Feb 08, 5:53 PM
    You'll never regret time spent preparing and researching, as long as it doesn't scare you off starting!
    Still knitting!
    Completed: 1 adult cardigan, 3 baby jumpers, 3 shawls, 1 sweat band, 3 pairs baby bootees,
    1 Wise Man Knitivity figure + 1 sheep, 2 pairs socks, 2 hats, 2 balaclavas for seamen, 1 balaclava for myself, multiple poppies, 3 peony flowers, 4 butterflies ...
    Current projects: ready to decrease / decreasing on all parts of the mohair cardigan pattern!
  • freddyfredfred
    • #3
    • 12th Feb 08, 7:28 PM
    • #3
    • 12th Feb 08, 7:28 PM
    You need to be very organised about keeping all your receipts and thinking, with almost every purchase: "is this an outgoing that I can claim back against tax?" As a self-employed bod, you're quite likely to have extra outgoings for running your own office, for example, and it's important to be able to reduce your tax bill accordingly.
    • fguk
    • By fguk 12th Feb 08, 9:09 PM
    • 254 Posts
    • 175 Thanks
    fguk
    • #4
    • 12th Feb 08, 9:09 PM
    • #4
    • 12th Feb 08, 9:09 PM
    So many ideas, having been in business for 3 years for myself.....ill try and give you some of the really important ones.

    1) Make sure you have a completely supportive partner (wife, husband, boyfriend, girlfriend), they can not only help with ideas and emotional support, but with the bills as well.

    2) Dont believe people when they say, "get through the first year and you will be fine", its not true, you always have to be on the ball and working hard.

    3) Get yourself some sound professional advice from accountants etc.

    4) Network, trawl through your contacts book and talk to everyone, some will be able to give you work, some will be able to help you with accounts, some will know someone that can help, some will know someone who knows someone who will call you in 6 months and help you immeasurably.

    5) Go through everything you can with your home bills and expenditure before you start, that way you know you have the minimum bills possible, which means those lean early months arent so pressurised (I found moneysavingexpert.com in the first few months of my business, and it really helped)

    Plan it all twice, think about it three times, work four times as hard, but definately give it a go!
  • bendabomb
    • #5
    • 12th Feb 08, 9:47 PM
    • #5
    • 12th Feb 08, 9:47 PM
    Get yourself a good accountant. They will save you far more than they cost. But a bad accountant will be a nightmare.
    • Savvy_Sue
    • By Savvy_Sue 12th Feb 08, 10:21 PM
    • 39,182 Posts
    • 36,095 Thanks
    Savvy_Sue
    • #6
    • 12th Feb 08, 10:21 PM
    • #6
    • 12th Feb 08, 10:21 PM
    Don't be afraid to phone HMRC and ask what you need to do, both in relation to self-employment and taking on an employee. I always found them VERY helpful. But note that they're not there to reduce your tax bill - that's what you're keeping your receipts and paying your accountant for!
    Still knitting!
    Completed: 1 adult cardigan, 3 baby jumpers, 3 shawls, 1 sweat band, 3 pairs baby bootees,
    1 Wise Man Knitivity figure + 1 sheep, 2 pairs socks, 2 hats, 2 balaclavas for seamen, 1 balaclava for myself, multiple poppies, 3 peony flowers, 4 butterflies ...
    Current projects: ready to decrease / decreasing on all parts of the mohair cardigan pattern!
    • Mike by the Sea
    • By Mike by the Sea 13th Feb 08, 1:08 AM
    • 800 Posts
    • 219 Thanks
    Mike by the Sea
    • #7
    • 13th Feb 08, 1:08 AM
    • #7
    • 13th Feb 08, 1:08 AM
    Don't forget to register with HRMC as self-employed within 3 months of starting or you could be hit with a fine. They also send you lots of useful information when you do register.
    Personally I'm always ready to learn, although I do not always like being taught - Sir Winston Churchill
    • Mike by the Sea
    • By Mike by the Sea 13th Feb 08, 1:09 AM
    • 800 Posts
    • 219 Thanks
    Mike by the Sea
    • #8
    • 13th Feb 08, 1:09 AM
    • #8
    • 13th Feb 08, 1:09 AM
    Don't waste money on advertising etc. until you have asked other people for their experiences.
    Personally I'm always ready to learn, although I do not always like being taught - Sir Winston Churchill
  • anitamarie
    • #9
    • 13th Feb 08, 2:42 AM
    • #9
    • 13th Feb 08, 2:42 AM
    1. Expect to be poor for the first couple of years. You can't seriously grow a business if you're sucking all the profits out of it and sticking it in a 5% savings account or whatever. If your business plan is executed well, you'll get a much better return investing in your own business anyway. Of course, this all depends on your confidence and appetite for risk

    2. If you know you'll need money to live, save it before you jump so you have the safety net in place.

    3. You don't need to spend a lot at first, next to nothing in fact. Just go and talk to some people at free networking events, make your first sale and reinvest the profits you make organically. You can do this alongside your day job. The notion you need buckets of money to start a business is a myth perpetuated by banks looking to make a buck and government agencies who can't function themselves without spending a few grand on a training course.


    4. Hunt around for grants and freebies. Most universities have some kind of SME freebie assistance you can grab (free web design, courses, etc). Some councils also offer freebie assistance, as does Business Link. In fact Business Link has a grant finder online; just remember to look for grants which fit with your strategy, not let the grants define your strategy.
  • ademoore
    Grants
    This is a site that I like to keep an eye on - http://www.j4bgrants.co.uk/Default.aspx Here, you can find out about grants available in your local area. Check it out!
    • ncrossland
    • By ncrossland 13th Feb 08, 8:03 AM
    • 42 Posts
    • 68 Thanks
    ncrossland
    My top 10 tips, in my experience (assuming you are *really* sure you can cope with the long hours, hard work, and cash flow problems):

    1. You don't save money by skimping on professional help -- pay for an accountant, and they'll save you money and heartache; pay for a designer instead of trying to knock up business cards and a website yourself (it will look far more professional, and save you time for doing what you do best)

    2. Don't waste time on grants -- the paperwork, time, and reduction in supplier choice nearly always wipes out any value they have

    3. Just do it -- don't spend massive amounts of time planning (that's not to say don't do your research -- just that you don't need to plan every aspect of the business in advance).

    4. Make sure you get everything in writing from clients and suppliers

    5. Don't be afraid to say 'no' to jobs you don't know how to do, or will not be profitable - just a busy fool. But be prepared to go out and find work -- it won't just come to you.

    6. Try and avoid working for family - they are unlikely to be profitable because you will spend longer on them and do them for less (see 5) - it may be a 'nice' thing to do, but it won't pay your bills - you have to be hard nosed.

    7. Don't undervalue yourself. If you do a good job, people are probably willing to pay you more than you think.

    8. Word of mouth / networking is good advertising (and free). Yellow Pages is neither.

    9. Try and get an office - one-man units or hot desks can be quite cheap, or try and borrow a corner of a friend's. You'll appreciate being able to leave work at work - otherwise it will take over 100% of your time.

    10. Get a VOIP geographic landline number -- you don't want to give out your home number, and not know if a call in the evening is work or pleasure. A mobile doesn't look professional, 0845's can put some people's backs up, and BT business lines are expensive and not portable (you may well move offices in your first years of business). For a few quid you can get a proper VOIP handset, geographic number and be able to receive calls wherever you are.

    11. Put 20% of EVERYTHING you earn in a savings account AS SOON AS YOU EARN IT, so you've something to pay the taxman with at the end of the year.

    12. ^^^ Under promise and over deliver -- it's a cliche, but customers will love someone who goes the extra mile.
    Last edited by MSE Jenny; 15-02-2008 at 5:36 PM.
  • MuddledOfMiddlesex
    If you can, try to combine self-employment with employment for a year or two, i.e. run your business alongside your employed work. It's hard work, of course, but it's a great, lower-risk way of both learning the ropes/technicalities AND seeing whether your heart is truly in the business. If you can't wait to get stuck into your business after a shift at your day job, even if it means propping your eyes open with matchsticks, then it's a sign you have the drive and passion to go it alone.

    I did this for three years before committing to full-time self-employment in 2006. I was able to negotiate going four days a week at work, and then running my business the rest of the time. I am so glad I had that experience when I finally relied on my business for my income - it made it much less scary.
  • daddygez
    Great Idea Martin.
    Been self employed for most of my life and still learning.

    1. take a note of all your mileage at the outset, it might be better to claim 40p allowance than car expenses BUT also keep all vehicle reciepts and compare the two at time of filling out tax form.

    2. a good accountant is better than these computer tax programs. An accountant knows what 'little' extras you can claim for whereas a tax program just fills out the form for you. Ask around those that are self employed in your area which accountant they use and do they think the're good.

    3. put a regular amount away each week/month in an isa or similar to cover the tax bill ( the payment at January 31st can be destroying straight after peoples mad christmas spend)

    4. depending on your clients, try to build a good rapport, customer loyalty depends much on a 'feel-good' factor as well as good and trustworthy service.

    will post more as I think of them.
  • nicky nacky noo
    I need advice, my hubby has been Ltd Co for 2 years (Electricial company with 2 employees), it is ticking over ok, he has some good customers, but we have 3 small children and we are up to our eyes in debt, resulting in us living well below the bread line, we are drawing money from personal credit cards to pay into the company to meet the 6 grand a month over heads. Is it work carrying on I think wwe are at breaking point, but he thinks this is normal, which one of us is wrong, will it get better? Help
  • CoatesFranklin
    As an accountant I can recommend two areas that save our clients c.4,000 per year for very little effort:

    1. Set yourself up as a limited company rather than self employed. Depending on your level of income, this can save you around 2,000 per year as there is no National Insurance to pay.

    2. Register your business on the Flat Rate VAT Scheme. Depending on your type of business, this can save you upto 2,000 per year.

    I also agree with most of ncrossland's tips although I would say that, depending on your type of business, you can work from home without your customers knowing if you hire a virtual office (postal address / tel no.) which is on offer in most cities. This could save you 's in office rent.
  • Kazza1
    Prince's Trust & Other Tips
    Hi

    I have been self-employed for almost 10 years now and have been involved with the Prince's Trust as a business mentor for around 5 years. So, my tips are:

    1) If you are aged between 18 and 30 and are currently unemployed or only working part-time (or fit some of the other Prince's Trust criteria) then you may be eligible for a low cost loan to start up your own business. As well as the loan, they will assign you a business mentor who can give you loads of free advice and support. A lot of the mentors are accountants, bank managers, experts in marketing etc so they are a resource well worth having.

    2) Don't rely on friends to give you business. In my first two years, only 1 of the dozen or more people who promised me business actually came through for me. You HAVE to go out and find your customers - they won't just turn up on your doorstep.

    3) Don't give up. Trying to sell yourself/your services etc is very hard work and you get an awful lot of rejection but keep at it. Eventually someone will say yes.

    4) Keep tabs on any grants etc on offer from your local Business Link. We have managed to get a free day's website development training and half the cost of a new laptop. Not a lot in 10 years but still worth having.

    5) For an awful lot of businesses, advertising is a waste of money. Really think about your target market and whether advertising is the best way to get to them before you spend your hard-earned money on it. Mailshots tend to be cheaper and better-targeted, and even leafleting in the street (if appropriate) can be effective.

    6) My final tip is this... Tidying the house, doing the washing etc don't matter. The business is more important. If you are earning enough, you can always pay someone to do household chores for you. Or, in our case, just get used to living in a pigsty!!

    Good luck to anyone thinking of taking the plunge.
  • olgacrackcorn
    setting up
    Hi out there to all MSE budding entrepaneurs,
    im looking to jack my day job in at the end of march to start up on my own painting & decorating.What i need to know,is it possible for me to claim housing benefits & uneployment benefits for a short while,whilst i try to get established & get a run of work in.I really need to know this,as i have no cash to fall back on as i live week to week on my wages,& also i have a very very bad credit rating,plus three children & a wife to support.
    All replies will be very gratefully received.
  • olgacrackcorn
    setting up
    Hi out there to all MSE budding entrepaneurs,
    im looking to jack my day job in at the end of march to start up on my own painting & decorating.What i need to know,is it possible for me to claim housing benefits & uneployment benefits for a short while,whilst i try to get established & get a run of work in.I really need to know this,as i have no cash to fall back on as i live week to week on my wages,& also i have a very very bad credit rating,plus three children & a wife to support.
    All replies will be very gratefully received.
  • Epiphone
    1. Set yourself up as a limited company rather than self employed. Depending on your level of income, this can save you around 2,000 per year as there is no National Insurance to pay.
    Originally posted by CoatesFranklin
    There is if you take a salary!
    • Lucyeff
    • By Lucyeff 13th Feb 08, 9:28 AM
    • 832 Posts
    • 784 Thanks
    Lucyeff
    We asked on MSE in the early days of our business whether Yellow Pages were worth the money (the quote we had was quite high for a relatively small ad).

    The advice was spend the money on a website! Then we found www.spanglefish.com who offer free websites which have small google ads on them. But if you pay 25pa you can get rid of the google ads and end up with an impressive site! Quite a few MSE-ers have sites with them. We went for the 25 pa option and have had loads of help getting it set up.

    There are other places to get free websites but the folk on Spanglefish (including other users) are straight there if you need help, plus it's easy to tinker with the site with no knowledge of HTML and suchlike - even good for techno phobes!

    We've ended up quite high up on the search engines and we've had lots of hits. We've found it's useful to potential customers my husband has cold called as it gives them the chance to read up on us, and gives us more credibility as a business.

    The only other advice I'd give is don't keep waiting for the 'ideal' time to start working for yourself. We'd always fancied it, but it was never the right time. I've been a stay at home mum since June 05 with a second baby of 5 months when he started, and we were quite financially challenged... but we decided it was then or never.

    Although we're still finding it a challenge financially, my husband is happier and so we all are! Nowt beats earning money for yourself rather than earning it for someone you possibly don't like for them to buy their new ivory backscratcher...

    Hope this helps someone, and good luck if you are starting out on a new venture!

    Luce
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