The UK is home to around five-million self-employed people, according to the ONS. This figure has expanded over 2020, when locked-down workers searched for alternative sources of income. Figures from Company House indicate that nearly half a million businesses were registered during the period.
Whether you’re just starting out on your career, or you’ve become disenchanted by your current occupation, you might be tempted to set up your own business. There are definite upsides to doing so, but there are downsides, too. Before you take the plunge, it’s vital that you anticipate, and plan for, both of them.
Self employed people have freedom. They can choose their own hours and their own place of work. If your personal circumstances, or natural inclinations, force you to rise at a late hour and work into the night, then you can do it. You don’t have to answer to anyone except yourself. Just be sure to make yourself and your business known, attending networking events and having memorable business cards to hand out will certainly help.
You’ll also have the freedom to manage your own projects and responsibilities. It might be that you’re naturally good at this – but even if you aren’t, it’s possible to learn how to be more organised over time. The availability of productivity apps and other time-management tools will help you.
Finally, you’ll also have the creative freedom to do as you please. Your office can be as tidy or as messy as you wish, as long as it’s brimming with ideas. You won’t be confined by corporate procedures, putting you at an advantage, allowing more scope for innovation. Just be sure that you stick to a well-considered and structured business plan to avoid any costly mistakes.
With freedom comes a little bit of danger. When you’re employed by someone else, then you might enjoy several safety nets that won’t be there when you work for yourself. If you fall ill, you won’t have the luxury of sick pay. If you want to take a break, then your annual leave will need to be paid for in lost income.
You’ll also need a little bit of a cushion of capital to live off during the early phases of your new career, as it’s unlikely that you’ll be earning a profit right from the word go. Self-employed people often find themselves working long hours to get the project off the ground – and there’s a definite element of faith required. You won’t see immediate results, and so you’ll need to be confident that your plan will pay off in the long-run if you’re to get through the initial phase.
Finally, there’s a social aspect that you might miss out on. If you’re working for yourself, particularly if you’re working from home, on a computer, then you might begin to miss the social interaction that comes from working with others.