Self-employed: how to start your own business
If you're thinking of becoming self-employed and starting your own business, be sure to follow these ten tips!
The UK today has four million self-employed workers, plus a further 4.3 million small businesses with fewer than ten employees.
In other words, about 99.9% of all British businesses are either one-man bands or have tiny workforces -the backbone of British enterprise.
So how do you go about starting your own business, becoming self-employed, or striking out on your own? Here are ten tips, based on my own experiences:
1. Find a job you love
When everyday work is enjoyable, it hardly feels like work at all. If you fancy going into business, then start by doing something you enjoy that people will pay you to do.
If you can turn your skills or hobbies into a moneymaking venture, then life will be sweet.
2. Get used to working hard
To run a business well, you must juggle several things at once. When you're not actually working, you need to be looking for more work. When you're not doing either of these, you should be finding more clients, monitoring your rivals, and so on.
Running your own enterprise can be almost non-stop. Then again, the rewards are obvious: if I work twice as hard, then I earn twice as much, all else being equal.
3. Express to impress
When selling your personal skills for a living, you need to look, dress and speak the part. Also, invest in professional-looking promotional materials, such as suitable business cards, fliers, brochures, adverts and a sound CV.
If your command of English isn't so hot, then get a well-read contact to proof-read these before printing.
4. Network like mad
The best way to win business is through word of mouth. Personal recommendations really work.
What's more, the person best-placed to promote your services is you, so you need to network like mad. This means promoting your business at every opportunity, calling on the help of family members, friends, ex-colleagues, school friends, social contacts and anyone else willing to help you drum up more work.
5. Get plugged in
To promote a business or personal service successfully these days, you need to make the most of the internet.
First, you'll need a website to promote your business. And you can gain publicity by actively contributing to Facebook, Twitter, LinkedIn, blogs and a myriad of other sites.
These days a strong online strategy grabs far more attention than an expensive print or online ad ever could.
6. Formalise your working hours
Although I can be at my keyboard at any time between 9am and 8pm, my core hours tend to be 10am to 3pm on weekdays. During these key hours, I try not to get distracted, so I can concentrate on making money. Outside of this time period, I am more relaxed, but will still leap on any work that comes along. Also, I will work evenings and/or weekends to deliver a good job on time.
7. Who needs an office?
I've worked from home since 2005. In 2007, my wife joined me in making our home her workplace. We've coped perfectly well without an outside office or workplace, but you may need one.
Even so, it pays to take things slowly by working out of your home first, as this is the cheapest option. Here are my 18 top tips on working from home.
Over time, your need for space and a productive working environment may outgrow what's available at home. At this time, look into renting an office or workshop -- or even just a part of one, courtesy of 'office outsourcers' such as Regus. Alternatively, a local business may be willing to provide you with space in return for a modest weekly rent.
8. Record your expenses
All legitimate business expenses can be offset against your company profits, or your tax bill if you're self-employed. These include premises costs and repairs, admin expenses (including stationery), travel expenses for work, marketing expenses, finance charges and professional fees. There are more details over at Business Link.
Always keep a copy of all receipts and expenditure. Without these, you may not be able to deduct these expenses from your profits or tax bill. Indeed, if your paperwork isn't in order, then you could be fined by HM Revenue & Customs (HMRC).
9. Get your pricing right
How you price and charge for work is up to you, but don't sell yourself short. If you're offering an expert service, then you should charge the full market rate.
In my experience, the larger the client, the higher the fees they are willing to pay. What you charge is up to you, but make sure it is enough to keep you in the standard of living you need or aspire to.
10. Keep on top of red tape
The Government keeps close tabs on British businesses, not least so it can collect the necessary taxes. So becoming an entrepreneur also involves getting to grips with lots of paperwork and red tape.
Four key things to keep on top of are:
- Companies House: As soon as you incorporate a company, you need to keep Companies House informed of key information about this business, usually yearly. If you don't play ball, then expect hefty fines.
- Value Added Tax (VAT): If your business turns over more than the VAT threshold (currently £77,000 in any 12 months), then you must register for VAT. Thereafter, you will need to file regular VAT returns and pay your VAT bills promptly, usually once a quarter. Again, fall out with the Vatman and you'll pay big penalties.
- HMRC: You will need to report your company figures or personal profits to the taxman at regular intervals, usually once or twice a year. At the same time, you must pay any taxes due, so budget for these as you go along.
- Insurance: If clients visit your home or you keep stock there, then you should contact a specialist broker to find public liability insurance to cover accidents and mishaps.
These are the lessons I've learned from my own experiences, but if you have other tips, be sure to share them in the comment section below!
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