Out of Office: Beginning the Journey to Becoming Self-Employed

Many people dream of being their own boss someday, but few ever do. There are so many challenges you have to overcome – taxes, regulation, and then the regular business challenges like marketing and product management. If you’ve got ambition, and you’re ready to work hard, here’s how to get out of the grind and open up your own enterprise.

Register As Self-Employed

Some specialists such as Slater and Gordon can help you with the basic business documents, as well as providing legal counsel specifically for businesses. You will need to register as self-employed in the UK with the HMRC and pay your own income tax and National Insurance.

You must register within three months of starting any trade. You can register online or call 0845 915 4515 for more information.

Work Out Whether You Need To Register For VAT

If your business has an annual turnover of at least £81,000, then you must register for VAT. Not all businesses start out making this kind of money, so it’s possible you won’t have to worry about this.

If you do expect to hit that figure, however, you must register. In many cases, you might decide to register even if you don’t need to. You’ll gain credibility in the marketplace and claim the VAT back on eligible business purchases you make.

You could also consider a flat VAT scheme which makes the accounting easier on you. An accountant can help you decide about this.

Open A Business Bank Account

To be a legitimate business, you need a business bank account. Business accounts allow you to separate your personal and business income and keep finances separate from your personal affairs.

It’s also more professional to ask people to write a check to your business rather than your personal account. Business checking accounts usually have higher fees than personal checking accounts, but if you shop around you may be able to find something with up to 24 months of free banking to get you started.

A business bank deposit account can be ideal if you intend on holding cash in the account as it pays a small amount of interest on deposits. It’s not much, but it’s better than nothing.

Insure Your Business

Buy insurance on your business – specifically employee liability insurance. This type of insurance is required if you have employees, aside from family relatives. Most small businesses also take out public liability insurance which will cover you if a third-party injured themselves on your property.

If you offer professional services or advice to client, you may also ant professional indemnity insurance cover. This insurance covers you if a client sues you because they’re unhappy with your work.

Set Up The Right Company Structure

Getting the right company structure is also important. You can run as a sole trader, a limited company, or some other corporate entity. This is a decision you shouldn’t take lightly. In fact, most business owners consult with an attorney before they formalise anything – it’s that serious.

Market Your Business

Presumably, you have an idea about what you want to sell. But, you still need to market it. Without marketing, you don’t have a business. You have a hobby. Marketing strategies include paid and free publicity, direct marketing or direct response, and online media advertising.

Consult with a marketing specialist to get an assessment about which type of advertising is right for you. Remember, when you’re first starting out, you’ll probably need at least some kind of publicity.

James Somers is an established freelance business consultant. He is keen to educate and support others looking to run their own business through his posts online. His thoughts on this subject can be found on a number of B2B websites.