So you’ve been made redundant one too many times and decided to take the plunge into the crystal clear waters of self-employment? Despite the recession, or perhaps because of it, large numbers of individuals are starting up new businesses or choosing self-employment. The Office For National Statistics has kept records relating to the numbers of self-employed individuals since 1992. The figures show a peak of 4.14 million of contractors in the second quarter of 2011, the highest figure since these records began. In the second quarter of 2011 a total of 166,000 new self-employees joined the ranks. In times of recession self-employment can make more sense than you might think. Small operations have lower overheads and can be more flexible than large companies making their services highly competitive at a time when businesses and consumers are looking to source the best value products and services that they can. Setting up alone is exhilarating, hard work and daunting. Here are some tips to help you on the way.
- Talk to Business Link in your area. They have experienced advisors in a range of fields and can offer advice, and help you to access local and regional grants or funding. One problem many new businesses face is lack of expertise in crucial areas of business management and this is where Business Link is invaluable.
- Create a business plan and write it down. Again, if it’s not your forte, Business Link can help. A business plan can help to clarify your aims and goals and is an invaluable tool to measure progress, identify and solve problems. It is also crucial if you need to access finance either in the form of grants or business loans.
- If possible have a practice run. Start part-time in the evenings or at weekends. If you are still employed but worried about what the future will bring, this is a perfect way to find out if self-employment is for you – and if your business idea is viable. This isn’t possible for everyone but if it is at all possible it should be your first step.
- Talk is cheap, they say, and they’re not wrong. Talking to people, sometimes known as networking, is the cheapest form of advertising known to man and woman. Learning to market your own business using traditional advertising routes can be an expensive and frustrating game. Satisfied customers are your biggest asset in terms of marketing, just ask them to pass on your name (and number) to friends and family – you’ll be surprised at the results.
- Set up your accounting systems before you start up. This is not a “cart before the horse” scenario, it’s an absolute must. Tax, payroll and VAT regulations are complex and tortuous subjects. Records need to be kept for six years and they need to be accurate. Accounting software and payroll software, if you need the latter, should be considered an essential investment, alongside the services of an accountant. Don’t skimp in this area, accounting software will keep your records accurate and save time for your accountant – which saves money for you.
Working for yourself is possibly the biggest career decision you can make and, from experience, I’d say it is the most rewarding. It’s hard work, it is frustrating and it can require an “always on” approach in the early days. Learn to manage your time, plan in advance and take all the free help you can get. Recessions have historically been the times when big businesses of the future have established themselves, on the smallest of scales in the most difficult times. As they also say, necessity breeds invention.