Am I ready to become self-employed?

Many people consider the possibility of becoming their own boss at some time during their lives. It takes courage to make that change but there are many benefits.

As accountants we see many people start off. Some succeed and some don’t and you can never predict who will fall into which category. Sometimes it is a matter of luck. Where our advice is sought, and even when it isn’t, we make a few suggestions:

Being self-employed is very different from being employed. It will occupy more of your life so the work/life balance will change.

You need to make certain that you have the support of your partner.

Make sure you have something to live on. Work out how long it will be before you can get a regular
flow of income. Of course, if you are buying an existing business then the accounts of the previous
owner should provide a guide to this. Make sure you check what you are being told.

Try to keep the amount you need to finance your new business to a minimum. Don’t run before you can walk. When it comes to premises, can you work from home? If not how much rent can you afford?

How will you get your customers / clients if you are not buying in to an existing business? It can take a
long time to get going. Maybe you can build up your business while still keeping your job and then leave employment once your new business is viable.

Will you need to employ someone in the business? Avoid this until absolutely necessary.

Prepare a business plan (see other article on this site.)

Make sure you register with HMRC for Self Assessment if you earn over £1,000 and register with HMRC if your sales are going to exceed £85.000 a year.

Good luck! If you want to know more, please contact us.