WHO WANTS TO BE SELF-EMPLOYED?
367,000 people have become their own boss since the financial crisis started in 2008. These figures are according to the ONS (Office for National Statistics). Around 84% of this increase was in the over 50 age group.
Unfortunately, we see the horror stories and the risks that being self-employed can have - there should be a ‘Government Health Warning’ attached!! Far too many people embark on a business enterprise, full of good intentions, but are ill prepared and come unstuck, often at the wrong time of their life.
It’s much easier to lose money than earn it! Here are a few things anyone thinking about becoming self-employed should watch out for.
- Personal liability – this could range from trading as a sole trader or giving personal guarantees to the bank or a supplier. Insurance can be taken out against potential problems. The proprietor needs to think about any potential liabilities – not many people start up in business considering what may happen in the event of failure.
- Rules and Regulations – the proprietor needs be an expert in the rules and red tape that relate to the industry in which they operate. Then, there’s also the rules relating to tax and employment and other Government legislation. There are hefty penalties for getting it wrong.
- Time – time is something that no one has enough of! A business can take over the proprietor’s life which can have a massively disruptive effect on family life.
- Profitability – despite enormous hard work, there is no guarantee of profits. There’s not even a minimum wage for the self-employed and there’s no one to complain to about the stress levels! A well thought out written budget and a business plan is essential. The plan should be based on the worst that could happen, not the best. A good accountant will be worth his weight in gold. Having a change of mind is not a failure.
Not that we’re trying to put anyone off!!
Being self-employed can be great fun, financially very rewarding and self-satisfying!