Business

Three challenges to prepare for when going self-employed

posted by Chris Valentine

More and more people in the UK are becoming self-employed. But with this comes several issues and below you’ll find three key things to help prepare yourself if you’re thinking of taking the plunge.

Doing it all

When you go self-employed, you probably know what you’re going to be doing, after all, you’ll be taking the job you’ve been doing for however long and doing it without being employed by another company. But, pretty soon, you’ll realise that you’ll be doing everything yourself – essentially becoming a jack of all trades. From doing the actual work and acquiring clients to completing invoices, chasing down payments and much more, it’ll all be down to you.

The important thing to remember is – it’s all pretty easy to manage. The easiest way to deal with all of the added extras you probably didn’t have to do before is to adhere to a schedule. Time management is key when being self-employed, so make sure you set aside time for finding clients, checking in with current ones and dealing with all that taxing work, such as finances to ensure you don’t get snowed under every so often.

Money matters

The biggest worry for most people when it comes to going self-employed is the salary. Going self-employed isn’t as comfortable as a regular 9 – 5 roles, due to the inconsistency of the money you earn. One month you could see an income of £3,000 and the next you could earn £500, but one thing that won’t change is the number of outgoings you have.

However, don’t let this deter you. After a few months you should know how consistent your income is, and you’ll probably have some money saved before taking the plunge to help during these months – if you don’t, make sure you do. You can then work out a budget, based on your monthly outgoings, so you know how much you need to earn to ensure you can live comfortably. Also, make sure you set some of your monthly wages aside for those bad days.

Finance

While on the topic of money, something you need to prepare yourself for is the world of finance that doesn’t include your bills. If you’re looking to get a mortgage or a new car or even a new kitchen installed, it can be a little more difficult when you’re self-employed.

For a new car or even a new kitchen or equipment, you can apply for finance with major companies from Apple to Ikea and Go Car Credit providing finance services to the self-employed. Meanwhile, for a mortgage, you usually have to wait a few years after becoming self-employed to apply for one.

To prepare yourself for this, just make sure you keep a record of all of your ingoings and outgoings so you can provide them to whoever asks.

While there are other things you will encounter, as you can see, dealing with each issue can be very easy, and the reward of being self-employed is pretty unparalleled.

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