Self-Employment is appealing to many different types of people. But it’s important for the future of your business you don’t just jump in with both feet first. The correct planning will make your business more financially secure. Our self-employment check list will put your planning on the right footing.
Type of Business and Training
The type of business you choose will depend on your interests and skills and possibly the extent of your ambition. Some are essentially lifestyle businesses while others may be grown to eventually sell at a profit. Before settling on the final format you need to know how your business will vary from the competition. Successful business people tend to be aware of the gaps in their knowledge and do something about it. So get training to make sure you’re conversant with unfamiliar areas and able to keep skills up to date.
Company Structure and Finance
You can set up a business in a variety of different format’s including sole trader, limited company and a partnership. Whichever structure you choose will have an impact on tax, finance, accounting and legal liability. Get a grasp of bookkeeping and make sure your financing is sufficient for six months trading. A business plan will boost your credibility.
Tax and NICS
You must register as self-employed within the first few months of trading. Understanding applicable National Insurance Contributions for yourself and any employees is essential as these will come out of your gross income. Don’t underestimate the importance of NICs as they can affect the benefits a person can claim.
Insurance and Health and Safety
You will have to take out some form of insurance, depending on your company structure and what you do. Public liability insurance is essential and others include employer’s liability, professional indemnity and premises insurance. Your business premises have to meet health and safety regulations. Contact your council for details.
With self-employment your income can be unstable especially if you get sick and can’t work. Charities and commentators are urging people to contemplate income protection insurance to avoid financial hardship. If you work for yourself and have no other income you are especially vulnerable if you are unable to work for six months or more.