Self-Employment: What Nobody Tells You
It’s a major upheaval in life, changing your job or changing your career. And we all have a fleeting notion of what it is like to make a big change in your life, and the seismic shift it will have on your life. Self-employment is one of those shifts. There are countless ways in which it will change your life, both personally and professionally, so here is a little taste of the path it will lead you down.
The day you decide to go into the arena of earning money for yourself is a momentous one. Regardless of your age or career choice, the time you have taken to go and reclaim your life back from the standard clock in/punch out/punch the wall in frustration will do many different things for your peace of mind. While this sounds incredibly grandiose, it is a very important step to reclaiming a sense of happiness. From this author’s humble views, it took many years to find a way to associate a sense of achievement with work that was impossible to enjoy. Which is why the first thing you need to do when you go self-employed, whether you are starting a business or going freelance, you need to find something you enjoy. Do something you love and you’ll never work a day in your life, is a big truth, and one that many people spend years striving for. A lot of people are choosing the self-employment route now for many different reasons. The most attractive ones are the seemingly apparent freedom you have. Now it is freedom, but with a small f. Emotional freedom and physical freedom are two different things, and it is possible to be chained to a desk for 14 hours a day and still feel that sense of accomplishment. Seriously. You may have never felt free when you were lining someone else’s pocket, but by taking control of your crust, you are working with more purpose than ever before.
What happens when you go self-employed? A lot of newly self-employed workers can feel somewhat overwhelmed by the information that can come their way, and this includes the dreaded looking after their own finances. We’re not all accountants! But there are many reliable sources of information for you, and those that start on the self-employment route can feel that they are the only one. Chances are, out of your friends, whether you are 23 or 53, you will be. But the amount of people working for themselves has increased a lot in recent years, and this ranges from taxi drivers to freelance graphic designers and everything in between. The criteria changes depending on your income. But from the perspective of someone who earns an average amount of money as opposed to turning over £43,000 during the course of a year, which will dictate the amount of NICs (National Insurance Contributions) you pay, it can still feel like a wealth of information. Luckily there is a lot of help available to you, and it can come from the unlikeliest of sources. There are a lot of government schemes designed to help people with their taxes, and there are things like the Uniform Tax Rebate, which helps with claiming some money back on certain expenses. Like if you have a uniform you wear as part of your job, or you are running a business like a salon, or a mechanics, and you are spending money on tools that are an integral part of the work. They say that it is the first 6 to 12 months of going it alone that you will be putting in the hours for minimal returns or breaking even. It is nice to know that after that hard slog you put in that you are able to get an extra amount of cash out of your efforts down the line. As finances are concerned, the sensible approach is to put money aside where you can. Spending time weighing up the costs of your outgoings is an essential part of the process of going it alone. There are inevitable moments of feast or famine during the first 6 to 12 months, and it cannot be underestimated how much you need to prepare for this! There are people who idealize working from home and running a business from the comfort of your armchair, this is only a small fraction of it! For example, starting a business can take some time to “come out of the gate” which will mean doing it in the evenings or around your other work. Being freelance is a great way to slot in time to make your plans for running a company, but the personal impact in the early days is quite a weight, especially if you have a family. This is why it makes more financial sense to have someone to rely on or to have a stockpile of money put away.
A lot of people start self-employment because they are in a position to do so, rather than looking for a way out of their current working lifestyle, that’s not to say it doesn’t happen. People can find themselves in this situation for a multitude of reasons, and so you need to be aware of your limitations in the eyes of the government. A prominent example is when you rent a property. Renting somewhere without a steady income makes you look like a liability on paper, and it can prevent you from being able to rent a property by yourself. A lot of letting agencies will ask you to have a guarantor, so if you are unable to make the rent payments, someone is liable on your behalf. This is a big ask, especially if you are only in the infancy of being self-employed! Money causes a strain at the best of times, even if you are earning more than enough to live off. And asking someone, whether a partner’s family member or a member of your own family, requires a lot of trust from both sides. This links into what a lot of people may think of your own endeavors. While it’s very simple to say “don’t listen to what others think” it is very difficult when you are on your own in this type of scenario, and it is even worse if you come from a background of those that toiled for a pittance. People may even think you are crazy for going down this route because it is so uncertain. And people can suffer from this blinkered view of work, inasmuch as you are either working or not, and even if you are working from home, you appear to not be earning money, which can take a mental toll on you. The pressures you may face in the first year of self-employment can overwhelm you, so you need to develop a resilience or thick skin, which is why you need to find ways to de-stress. We all have our own ways, and if you have a partner who isn’t understanding of your new line of work, you can feel like there is no escape from this feeling. The fact of the matter is you are a lot happier now than you ever were before! This is worth more than money. And a final note, look up The Hard Middle. It is a style of marketing that helps you to not aim for the stars but to get your product, whatever that may be, to the middle ground. This is a trend that will help you to earn money by aiming your product in the area that can keep you ticking over financially, a link to a podcast talking about it is here.
This will be the best thing you will ever do in your life. It’s not easy, but take solace in the fact that everyone before you has felt the same. You may feel on your own, but you’re not! Now go for it!