Beginner’s guide to self-employment
Starting up your own business – is it for you? You’ll need to start with a great business idea and then workout whether it’s the right thing for you…
The pros and cons of becoming self-employed
Is self-employment for you? Before you take a step further, consider what it will actually be like:
- You get to be your own boss
- You can be flexible about life and work (you can even work from home)
- Work hours that suit you (possibly)
- Sometimes you’ll get low start-up costs and extra tax benefits
- Enjoy using your skills and experience
- You get all the credit for your success
- You might earn more money with a good idea, because you create your own income and profits
- The best bit: You do something you enjoy
- It’s hard work
- You can’t always predict how much you’ll earn
- You have to deal with any customer complaints yourself
- There’s no-one to take over if you’re ill
- You might have to take out insurance
- You have to deal with your own tax
- You’ll need to be responsible for health and safety issues
- You’ll have to pay for a venue, equipment and transport up-front – unless you find clever ways around it, like 14 year old Carla Evans who set up her own florist business in her family home’s garage
Getting started – make a business plan
To get started in any business you need to have a business plan.
What is a business plan?
A business plan says how your business idea actually works. It clearly shows how much money you’d spend to start it up and keep it running, taking into account sneaky little details like staff, travel and premises costs. It also shows a realistic view of what kind of profit you’d make.
If you don’t have a business plan, then banks and funding initiatives won’t want to lend or give you money – but a business plan isn’t just about impressing other people. You need it for yourself. You need it so you have a clear picture about how to turn your business idea into something real that works.
Things you need to think about in your business plan:
- How will you find customers straight away to get your business going (door to door canvassing, leaflet drops, ads in local papers or shops, Facebook competitions for your online store…)?
- How will you form long-term relationships with your customers to keep your business going?
- How much are you are going to charge for your product or service?
- Where will you get supplies from?
- How can you commit to making sure your customers get what they want when they need it, or when you’ve promised to them?
- Do you need training to do the job? Check out trade associations and local colleges to see what they can offer.
- Will the business need equipment and transport? Think about what you really need to start with – don’t buy everything at the beginning just the essentials – you can always get more.
- Will you need to buy into a franchise? This is a right granted to an individual or group to market a company’s goods or services within a certain location. If you are interested, search online for ‘franchising’.
This may sound complicated but there is a lot of help and support on GOV.UK to guide you through what you need think about when starting out.
Making it official – registering your business and sorting insurance
It may seem hard to believe now, but there will come a time when you’re ready to register your brand-new business. These are some of the things you’ll need to do:
- Register as self-employed with HM Revenue and Customs
- Get any permits from your local authority
- Get in touch with your local authority to see if you need to pay business rates
- Set up a financial record-keeping system (this is where an NVQ, school education or mentor might come in handy)
- If you decide to get liability insurance (you don’t need to, just if you want to) it will help if you ever end up with legal costs for things like personal injury or damage against property
- If you hire staff then you really, really need to get employer liability insurance. It’s the legal thing to do!
- If you’re ready to register and need more help with any of these things, visit GOV.UK.
Useful self-employment links
If you ever get stuck or want to learn more about self-employment, these people can help:
Self-employment – the start of something new
This is all just the tip of the iceberg, but making a solid business plan and going through the step-by-step process of registering your business means you’re officially your own boss! So if you fancy being your own boss and have a great idea that you think will see, get yourself down to The Sheffield College and have a run through our Business and Enterprise courses, perfect for nurturing you to success!