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A Guide to Self Employment

Since the financial crisis and economic downturn, the number of workers turning to self employment and freelance opportunities for work has increased by 10% between 2011 and 2012. Not everyone who ventures into self employment will be an immediate success, but if you have a certain skill or trade you think could potentially be perfect for a business venture then there are a few fundamental issues you should consider beforehand.

Taxes, Skills and Common Work Areas

The rise in self employment comes from a severe economic hardship in the UK and some European countries, but many people are also attracted to the benefits of being self employed. As a self employed person, you are your own boss and can decide your own hours, how much work you do and exactly what you want to do with your time. However, having this freedom comes at the cost of financial insecurity.

Skills for Self Employment

If you are self employed you will need certain skills and qualities to successfully manage yourself and your workload. These skills include:

  • A willingness to take risks;
  • The ability to handle heavy workloads and pressure, both financially and in terms of the amount of work you could possibly receive;
  • Excellent time management and money management skills, as work can come and go leaving you short of cash some months and exceptionally well off the next month;
  • Self discipline;
  • A natural ability to network yourself and gain contacts in your field to keep a steady amount of work.

These may seem to be relatively straight forward and common traits, but being self employed means you will rely on yourself alone to find work and provide yourself with a source of income. You will be entirely independant in your venture, unless you work with a partner, and won't have the support of a company to keep you on a steady salary.

Taxes

Unlike working for a company, you have to organise your own tax and how much you pay via HM Revenue and Customs. If you fail to pay the correct amount of tax, you could be liable and ordered to pay a fine. Before you consider becoming self employed, contact your tax office and find out as much information as you can about paying tax when you work for yourself.

Trades and Areas of Work

There are many different areas you can work in when becoming self employed. Your skill set will determine what kind of work you can achieve as a self employed person. Common trades are:

  • Online and computer/IT trades, such as web design, graphics design, copy writing, technical writing, programming and online marketing.
  • Photography or offline art trades, which could also include traditional art mediums (although work is usually harder to come by as a traditional artist).
  • Skilled trades such as plumbing, joinery, building work, electrician positions or handymen, the most common form of self employment.
  • Freelance advice services consultancy services, either in PR, marketing, law business or other sectors (extensive work experience is normally required to secure such positions).

Sourcing Work

There are many ways a self employed individual can find work, which will depend on your trade. For example, if you are an IT consultant and want to become self employed, you could work freelance for a particular company that uses your service on a supply and demand basis, who have a list of clients they outsource to their freelance workers (this is also the case for copywriters, designers and the majority of self employed trades). Otherwise, you can use freelance sites across the internet to source work; independant companies and small businesses will usually advertise any services they need. You also have the option of marketing yourself on and offline or direct marketing to businesses.

Is self employment for me?

Self employment isn't for everyone. If you rely heavily on a steady income you may not be ideally suited to self employment, unless you have a lot of savings or a fool proof business plan to fall back on. Depending on the type of trade and, essentially, the luck of the job market, you may find yourself barely making ends meet in the first few years of your venture.

If you have the desire and passion to become self employed and believe you can withstand potential financial mishaps that could inflict you during your self employed venture then you should consider a career as a self employed worker.

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