Self-employment is both exciting and challenging.
It involves a lot of planning. Here are some factors to consider:
- Do you want to work as a sole trader or in partnership with someone else?
- Is there a need for your product / service in the area / locality?
- Who will be your customers?
- Are you familiar with the financial aspects of self- employment? For example, national insurance contributions, tax, pensions and book- keeping.
- Do you have enough money saved, apart from the funds needed to set up? Remember you will need to have surplus savings to insure against any sickness and / or annual leave.
- Do you need to employ staff?
You will need a business / marketing plan. Your local Business Link and Enterprise agency
will be able to assist you in producing a business plan.
You may also want to see the National Enterprise Network
. They are a membership organisation for local enterprise agencies.
HM Revenue and Customs have created a tax guide
which includes a selection of helpful free guides in both video and written formats. Topics range from setting up in business, keeping records and tax-the basics.
It is best to start off with a smaller idea at first.
Your idea must have a 50% chance of succeeding for it to be realistic.
You may wish to 'test the waters' before you become fully fledged into self-employment.
You could be self-employed part-time to build up your customer base.
The Prince's Trust
offers grants to people who wish to test their business idea first before turning it into reality.
If you are unemployed and claiming job seeker's allowance and considering self employment Job Centre Plus
can give you advice on how your benefits may be affected.
If you are an unemployed musician and are claiming job seeker's allowance you may also be able to get some help regarding self employment under New Deal for Musicians.
You may find the HM Revenue and Custom's booklet Are you thinking of working for yourself
useful if you are considering self employment.
Your business plan should indicate how viable your business is, ie has it got strength to succeed?
The main indicator here will be the amount of money you put into your business initially.
Contributing some of your own money into the business will look attractive to a lender / sponsor. It will also make you more determined to make the business a success.
If you have limited savings, you may wish to ask your family / charitable trusts for help.
Book keeping is a legal requirement.
HM Revenue & Customs
requires every business to keep records for tax purposes. You will need to produce annual records.
If you have a limited company you will also need to send financial records to Companies House
Banks will also ask for evidence to assess whether they can still help you.
An accountant will be able to advise you on an appropriate book keeping system. If you cannot afford to hire an accountant then you may wish to enrol on a book keeping class.
You may wish to look at the following websites for short courses:
Work out the cost of marketing your product / service.
It makes it easier if you know who your customers will be.
A course on marketing may help, or ask organisations such as Business Link
, The Prince's Trust
, Shell Live Wire
or your local enterprise agency for help.
You may wish to have a competitor analysis of similar businesses.
Be creative. Receive the help of friends and relatives, ie in setting up a website, designing posters etc to cut costs.
Advertise in the trade press, local newspapers, radio stations, libraries etc to round up business.
Linked with marketing and advertising is location.
Will you be working from home or do you need to rent premises?
To decide, consider accessibility, the environment and how easy it will be for you to network with external agencies.
The Health and Safety Executive
site has details on protecting yourself and staff within the workplace.
Are there any renovations needed on the property?
Are there any building works to be done?
Do you need planning permission from your local council?
It's a good idea to seek advice from a solicitor/business adviser before you sign any contract.
Check the Yellow Pages
or the Law Society
Family and friends may know of property to let or be willing for you to use some of their business space.
Alternatively look in the property pages of your local newspaper and classified pages in Loot
Remember, all types of people become self-employed, however what these people have in common is the ability to believe in their idea and its success.
Common qualities are:
Health and Safety Executive
British Chambers of Commerce
Provides support to local businesses
HM Revenue and Customs
HMRC’s help line for the newly self-employed: 08459 15 45 15 or alternatively contact the Self Employment Contact Centre on 08459 15 46 55
HM Revenue and Customs Business start-up website
Federation of Small Businesses
Department for Business, Innovation and Skills
You can search for local solicitors, accountants, banks etc
City Business Library
Provides business information for job seekers, sole traders, enterpreneurs and small medium sized enterprises.
020 7332 1812
HM Revenue & Customs' free starting your own business e-learning package. The e-learning package guides you through the practicalities of setting up a business including registering your business online, record keeping, VAT registration, becoming an employer, planning for retirement and more....
A free online business support service which includes assessments such as the business viability assessment which tests the viability of your business idea.
Business support for entrepreneurs. Includes video interviews, business start-up guides on various topics including business planning, finance, sales and marketing and more....
Help line: 0845 600 9006
Institute of Directors
Confederation of British Industry
Help with setting up your own business either before or after graduating
Shell Live Wire
Business start- up support for 18-30 year olds.
National Enterprise Network
The Prince's Trust
Business start up advice for people aged between 18-30 years old. Runs The Prince's Trust Enterprise Programme which includes useful free guides ranging from preparing a business plan to sales and marketing.
A website for visual artists which has a section on self employment including registering your business, national insurance contribution, invoicing etc
Helps people over 50 to become self-employed
Self employment advice for jobseekers including information about the New Enterprise Allowance and Enterprise Clubs.
HM Revenue and Customs Business Support Team offers one-to-one advice as well as workshops about self-employment including tax and national insurance issues.
Supports people who wish to become self-employed. Has various business start-up programmes including those specifically for unemployed people and people with disabilities.
Disabled Entrepreneurs' Network
business start-up organisations to business mentors.
A business start-up toolkit for the creative industries.
Lottery funding database.
Directory of Grant Making Trusts (available as reference from public libraries)
The Institute of Chartered Accountants
The Association of Chartered Certified Accountants
A grants information website for businesses.
The National Endowment for Science, Technology and the Arts
Offers business support to creative people at the beginning stages of their careers.
The Law Society
The Law Society’s 'Lawyers for your business' website offers free business consultation and guides that are downloadable from the site.
Provides legal advice for creative people
Employment Law / Equal Opportunities
If you are considering employing staff then it's important to keep up-to-date with employment and equality issues. Here are a couple of websites to help you:
The Advisory, Conciliation and Arbitration Service
Offers advice and information on employment issues.
This website includes information on the national minimum wage, maternity and paternity rights as well as health and safety.
The Department for Business, Innovation and Skills
Information on employment matters including the national minimum wage and employment legislation.
A range of Age Positive publications including employer case studies and research on age and employment.
The Equality and Human Rights Commission
A series of guides about the Equality Act specifically for employers, workers, service providers, service users and education providers. A guide for students to follow.
Offers advice and support to ex-offenders, including returning to work.
The Apex Trust
Works with both ex-offenders and employers regarding employment matters.