So you’ve decided to work for yourself. No more micromanaging bosses, early-morning commutes or ridiculous office dramas about who cooked fish in the microwave. You are now your own boss, answering to no one but yourself.
Deciding to be self-employed can be a hugely liberating career move. You can set up and run your own business while being a master of your own time and activity. Or if you prefer a more rigid working structure, you could instead work on a freelance basis for an employer. How you maintain your self-employed lifestyle is up to you.
But to enjoy the flexibility and freedom that comes with it, there are some initial steps you must follow. You cannot just proclaim yourself to be self-employed and carry on with your life. There are processes in place and regulations you must adhere to, as well as some best practices for managing your finances and workload.
Here is a quick and easy guide to the key steps involved in going self-employed.
Register as self-employed
The very first thing you need to do is register as a sole trader (another fancy term for self-employed) on the UK government website. Once you have done so, you will be responsible for paying your own income tax and national insurance contributions.
Work out if you need to register for VAT
As of the time of writing, if your business has a turnover of more than £85,000, you will need to register for VAT. Even if you are not required to do so, depending on your business, you may wish to register anyway if you feel you may benefit from the extra credibility it provides or the ability to claim the VAT back on eligible purchases.
Open a business bank account
Although not inessential, it is a good idea for any self-employed worker to maintain separate bank accounts for personal and business use. This will enable you to distinguish personal from professional expenses when it comes to managing your financial records and makes your life a lot easier.
Take out insurance
Depending on your industry and the nature of your particular business, you may be required to have specific insurance policies in place. For example, if you employ another person, you are legally required to take out employer’s liability insurance.
You may also consider taking out public liability insurance to cover you in case of injury or damage on your premises, or professional indemnity insurance if a client sues you. Do some research into the different types of insurance coverage available to self-employed workers and decide what you need.
Organise your finances
Any successful sole trader must continuously stay on top of their finances. Keeping *detailed records of every business expense, invoice, and business transaction will ensure that you are always acting with transparency and have the necessary information at hand when it comes to submitting your annual self-assessment tax return.
Now that your business is up and running, you will need to find clients. You can promote your services via a range of different mediums.
Blogging and social media are great ways to establish your credentials and draw an online audience.
Printing marketing materials such as flyers, posters and banners can also be beneficial, and you can do this quickly and affordably with the help of a printing company such as Duplo International.
Continually seek to expand your personal and professional networks as you never know where the next business opportunity will come from
These are only a few of the most critical initial stages in becoming self-employed. Once you are up and running, you will be involved in a vast range of further responsibilities such as marketing, budgeting, and maintaining client relationships.