OWN BOSS? IS IT WORTH THE HARD WORK?
Recent figures show that the number of the self-employed has soared to an all time high. The Office for National Statistics (ONS) has reported that 4.6 million are now their own bosses which is around 15% of the UK workforce. In 1975 it was less than both 2 million or 9%.
Rather than being a nation of entrepreneurs the main reason for this surge, according to the ONS is a lack of employee positions.
A third of self employed work over 45 hours per week (compared to less than a quarter of employees) and average earnings are £207 per week which is less than half that of employees.
The numbers have been boosted by those over 65 year olds who are motivated mostly by a need to support a pension rather than a sudden desire of entrepreneurship in later life. The average age of the self employed is 47 compared to the average age of employees being only 40.
Here are a few things anyone thinking about becoming self-employed should watch out for.
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- Personal liability – this could range from trading as a sole trader or giving personal guarantees to the bank or a supplier. Insurance can be taken out against potential problems. The proprietor needs to think about any potential liabilities – not many people start up in business considering what may happen in the event of failure.
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- Rules and Regulations – the proprietor needs be an expert in the rules and red tape that relate to the industry in which they operate. Then, there’s also the rules relating to tax and employment and other Government legislation. There are hefty penalties for getting it wrong.
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- Time – time is something that no one has enough of! A business can take over the proprietor’s life which can have a massively disruptive effect on family time.
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- Profitability – despite enormous hard work, there is no guarantee of profits. There’s not even a minimum wage for the self-employed and there’s no one to complain to about the stress levels! A well thought out written budget and a business plan is essential. The plan should be based on the worst that could happen, not the best. A good accountant will be worth his weight in gold. Having a change of mind is not a failure.
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Not that I’m trying to put anyone off!
Being self-employed can be great fun, financially very rewarding and self satisfying! I’ve been self-employed for over 30 years and I wouldn’t have it any other way!!
I am one of the lucky ones, I help business owners every day to resolve issues within their business, if you know anyone that would benefit from my help ask them to call me on 01922 722205 or email tim.corfield@griffinandking.co.uk
By Tim Corfield
