Thursday, March 3, 2016

Could I Start My Own Business? – 7 Questions to Ask Yourself When Considering Self-Employment

Are you thinking about going self-employed? Great! Starting your own business is an exciting time.  Before taking the leap though here are some important questions to ask yourself:


1. Is self-employment an option for me?




If you're unemployed, unhappy in your job, your job search isn’t working out or you just want to make your own mark, then you might consider self-employment as a reasonable career pathway.  Being self-employed can have brilliant advantages such as building a company you believe in, creating a flexible work pattern, being able to increase your income.  However, it is important to carefully weight the positives and negatives of being self-employed to know you are making the right choice for you.  Being your own boss is great, but it also means the buck stops with you and there is no one else to motivate you or monitor your work. Would that suit you?


2. Do I want a work-life balance?




Some view self-employment as a chance to advance professionally by becoming their own boss, earning more money, or gaining status. Others seek the personal advantages it may provide, such as the ability to work at home, have more flexible working hours, or create profitable ventures from activities they enjoy.  If work life balance is the goal then ensure you are being realisitc when going self-employed as to the time commitment your new company will require.


3. What kind of business can I start? 




If you are considering self-employment and do not already have an idea of what you want to do, you could consider something which utilises your past experience, your skills or something which you have previously done as a hobby that you could develop into a full-time business.


4. Can I test the business before I start?




You can start by carrying out some market research activities and talking to potential clients to see when and how they want your product or services. What competition is there for what you want to do? What prices are reasonable to charge? Ask others who are doing what you want to do and find out the difficult points, barriers and lessons learned.  Taking the time to do this will mean you are much more likely to start a business understanding the marketplace, and therefore you will have a better chance at success.


5. What should I know about working from home and how to trade?




Depending on the type of business you are looking to run, you may need to obtain permission from your local authority to trade from home.  Food related businesses, for example, may require the local council to conduct an inspection of your food preparation area to certify that it is suitable.  If you are living in rented accomodation you will need to look carefully at your tenancy agreement and speak to your landlord to ensure they are on board with you registering a business from your home address.  There may be other regulations that are applicable to your business, so it is important to research thoroughly and get some advice to avoid making mistakes. 



6. What do I need to do to become self-employed?




You must register as self-employed with the HMRC when you start to trade or risk a fine. If you are considering self-employment, you will need to know the different ways of trading and which would be most appropriate structure for your business. Even if you anticipate not making a profit in your first year, HMRC will want you to complete a self-assessment form stating your earnings so they can monitor your income and expenditure and ensure you are fulfilling your tax and national insurance liabilities. Our course on 'Understanding Tax and National Insurance' can help to demistify this process and give you peace of mind that you are up to date with HMRC guidance. 


7. How much does it cost to become self-employed?


The financial costs of becoming self-employed and running your own business can vary significantly depending on your business model. Some of the common costs associated with a new business include: rent, equipment, stock, insurance, staff wages, travel expenses, etc. As a self-employed person you will need enough money to live on as well as money to start up the business and keep it going. You may be able to get money from the banks, other business loan schemes or business grants.  Get advice from an organisation like ours to understand your options for accessing finance, and to create a cashflow forecast which will help you to identify how much you will need to raise. 

If you are considering self-employment and are ready to get some advice then contact The Women's Organisation on 0151 706 8111 or hello@thewo.org.uk.  FREE support is available for women starting a business in Merseyside.


If you are a man in Merseyside looking for support to get a business started, Enterprise Hub (led by The Women's Organisation) can also guide you to a local organisation to offer you free advice and guidance.  Get in touch via 0151 706 8113 or enterprisehub@thewo.org.uk

by Business Growth Adviser Huda Mamoun



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