Interested in becoming self-employed? As part of our retirement and working series, we’re here to inspire any career changes you’ve been thinking about making, and self-employment is no exception.
Offering unlimited freedom as your own boss, being self-employed allows you to carve a new career direction out for yourself. Namely, one where you call the shots, as you will manage your own business instead of working for someone else. Best of all, self-employment is open to everyone, regardless of age or career type, making it a fantastic way to change your life for the better.
While there are plenty of considerations to make before becoming self-employed, it can allow you to escape any grievances with your current work setup. These may include low pay, a lack of job suitability or even the threat of automation among many more.
To ensure your experience is as successful as can be, here is our complete guide on how to become self-employed to help you get started.
Benefits Of Self-Employment
- Anyone can become self-employed, unlike a regular job which you have to apply for.
- It’s possible to become fully self-employed or set up a side hustle alongside your regular job.
- Self-employment visas are now popping up in countries around the world, which may offer tax benefits to your business.
- You can switch to self-employment to solve anything you dislike about your current job setup.
- There is the potential to scale your self-employment into a profitable business.
- No limit on the niche or industry, so long as your self-employment meets any legal requirements.
- It’s often possible to work from home and be self-employed, removing the need to hire commercial premises.
Considerations When Becoming Self-Employed
- If you’ve never been self-employed before, it can be a huge adjustment managing everything needed behind the scenes to make your business run. You may need to employ others down the line to help with some aspects.
- Your income will fluctuate, which can make it tough to manage your finances if you don’t have savings or other income sources.
- Getting a mortgage or certain types of credit can be difficult without a couple of years of trading history.
- Self-employed individuals are responsible for their own tax and legal liabilities.
- The industry has to be viable in the current economic climate and be able to weather any storms so that you can continue to generate an income.
Decide On A Niche
There has never been a better time to become self-employed, in terms of the sheer range of jobs you can create for yourself.
In some cases, you may be able to make an easy transition from a current or previous career, and offer the same services just on a self-employed basis. However, there’s now also the option of remote working in addition to in-person services. If you do have the digital skills to work remotely, you could potentially become self-employed from anywhere in the world.
The main things to consider are that the idea must be something you can make money from, and that is something that is also in demand. It also helps if you happen to enjoy the job too. So take your time to select the niche that will offer the most benefit here.
Also consider whether you have any transferable skills from life experience or previous jobs. For example, do you speak more than one language? Or could you use your work experience to offer consulting services? Do your research to find what is possible.
Figure Out How Your Business Will Make Money
Every success starts with a great plan. Normally, this involves creating a business plan. Even if you don’t need to get funding for your business and present a formal business plan, you’ll still need some idea of how your self-employment idea will generate money.
Some seniors decide to become self-employed in retirement to keep active and top up their pension pot, meaning money isn’t necessarily the main driving force.
However, for most people, making enough money to sustain any outgoings will be essential. Therefore, anyone wanting to become self-employed needs to work out how much they need to make, and whether this is enough to generate a healthy profit.
Alongside business forecasting to work out your most profitable months, you also need to have a contingency should your new venture not take off, or be subject to slower periods.
As a general rule, it’s always wise to have 3-6 months’ worth of outgoings covered before going self-employed. Alternatively, you could go self-employed alongside any traditional paid work and then transition to being fully self-employed once your new venture takes off.
Don’t launch your business until you’ve figured out how much you’ll charge for your services, and whether this is in line with your experience, as well as the going rate. Undercharge and you could run your business into the ground. Overcharge, and you could find it difficult to get clients. Instead, you need to find a sweet spot within your pricing model.
Take Care Of Any Admin
Depending on how you intend on operating your new business, you may need to inform the government, the local council and any other applicable parties.
Becoming a sole trader is always going to be more straightforward than becoming a limited company or any other business type. For instance, sole traders don’t have to register their details publicly on Companies House. Though, there are tax benefits to becoming a limited company compared with a sole trader, so you’ll need to explore what’s right for you, and ensure you tell the right people.
At the very least, HMRC is going to need to know about your self-employment so that you can submit your annual self-assessment.
On that note, you’ll need to keep notes of your business’s financial activity through bookkeeping. Understanding how much your business is both spending and bringing in is necessary for any tax returns.
If in doubt about how to officially register and set up your business, or even how to keep track of your finances, these days it is possible to find specialists to help, so don’t allow any confusion to put you off from becoming self-employed.
Read more: Starting A Small Business During Retirement
Tell People About Your Self-Employed Venture
Sure, you know you’re now self-employed, but does the rest of the world? Namely, any potential clients who would be interested in your products or services.
These days, it’s fairly essential to have a digital presence to attract customers and manage your business as a whole. This may include the likes of a website, social media platforms and potentially video marketing channels too.
At the very least, you’ll need either a professional LinkedIn page or a website where clients are able to find you. It’s good to note that a website can offer a fantastic reach, but needs to be designed and set up in a way that’s SEO friendly. Any digital marketing may also incur a cost, so you’ll need to budget for this unless you’re able to set everything up yourself.
If you offer your services on a local basis, then networking events can also be extremely helpful.
Remember that you won’t just need to market your business as you launch, but throughout your new career to ensure your books are full. If your campaigns don’t connect with your target audience, your profits will suffer. So make sure you know exactly who is most likely to purchase your products and services and ensure you’re reaching them with each campaign.
Work On Any Soft Skills
When you’re self-employed, especially when you are first starting out, you will be all things to all people. Although mastering any soft skills isn’t a legal requirement like some of the other steps on our list, it is an essential part of your success.
If you’ve never managed your customer service, marketing or accounting before, you’ll need to get to grips with each of these.
For instance, if a customer isn’t satisfied with your work, you need a way of being able to handle such situations professionally. A bad review can soon spell disaster for your self-employment, especially as your name is attached to it.
While it’s impossible to please everyone, having the skills to truly engage with your clients and listen to their needs will make all the difference between building a loyal client base and a good reputation or not.
By the same token, soft skills also mean learning what you can and cannot do as a business. There are going to be some jobs which aren’t profitable or sustainable. So you need to be able to learn to play to your strengths and to protect your business interests at the same time.
Create A Long Term Plan For Your Self-Employment Venture
Once things are going well and you’re busy with clients, one thing not to lose sight of is what is next for your self-employment.
Income-wise, it’s always good to aim for a figure that is steadily increasing year-on-year. So remember to take the time to reflect on your progress, and whether there are any opportunities to grow your profits.
In the modern age, it’s possible to mix active income with passive income. Although passive income may require a higher financial investment, it’s designed to work hard on your behalf. Active income requires you to continually put in an effort to be paid, which may become less easy to do as you age.
Also, decide how long you want to keep working for. If you must keep up your self-employed work in retirement due to needing extra money, it’s worth putting a financial plan together to make sure your plan is both sustainable and achievable.
Remember You Can’t Do Everything Alone
Self-employment is no easy feat, and there may come a point where you just can’t manage everything by yourself anymore. We’ve touched on outsourcing the likes of your marketing to professionals. However, there’s no reason why you can’t hire people to help you with other aspects of your business too.
In short, you may need to outsource any tasks which are slowing down productivity, or where there is a general skills or knowledge gap.
It’s possible to find help through traditional job boards. Although, these days online freelance platforms such as Upwork or Fiverr make it easy to find professionals who can help you with practically anything.
Another thing to look out for is becoming overworked. If outsourcing some tasks can relieve the pressure, then it’s a worthy investment.
Becoming Self-Employed: A Final Checklist
- Conduct research to find viable and sustainable self-employed job opportunities.
- Inform HMRC and any other applicable parties that you are now self-employed.
- Create a business plan and figure out if your idea is financially viable first.
- Launch your business by spreading the word to as many potential customers as possible.
- Monitor the progress of your business, and keep up with any bookkeeping and accounts.
- Have regular check-ins to ensure your business is still viable and profitable, or whether any adjustments to your services or strategy need to be made.
- Where necessary, look at hiring additional staff to help you with the day-to-day running of your business, if you can’t manage any important aspect yourself.
Retirement Expert – Free Financial & Career Advice For Seniors
We wish you every success with your self-employed venture. The main things to remember are to do your research, and have a financial strategy in place, in addition to nailing your marketing.
When your services are not only viable but become popular, your self-employment has the best chance of taking off. Although you must be prepared to put in a lot of effort, becoming self-employed may just solve any issues you’re having with your current employment, or boost your income during retirement, making it well worth it.
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