Working for yourself

Have you ever dreamt about being your own boss?

Research shows that the flexibility and independence of working for yourself brings more job satisfaction when compared to those employed by others.

Its not all about sleeping in late and long lunches though. The same research shows that you are likely to work harder as you try to ensure you make enough money to keep you afloat! You won’t have the safety net of paid holidays, pensions or sickness pay that employees typically have and there won’t be anyone else cracking the whip.

So if you have the drive and energy to take that next step, you’ll find there are many ways you can work for yourself…

Freelancing

Why consider freelancing?

  • Because you can work when you want to
  • You can work where you want to
  • You can reduce your outgoings
  • You can work as a freelancer at the same time as working part-time as an employee

Will you work from home or a studio? Self-promotion and marketing are vital in freelancing. And knowing your rights and how to safeguard your artistic practice is important for creating a sustainable business.

There can be some challenges to freelancing given you have to find your own work, deliver to demanding deadlines and decide on your fee.

You will also need to be self-motivated as there might be long gaps between jobs. Aim to develop yourself in your downtime by undertaking online courses to improve your technical, creative and business skills.

It could be advisable to register with HMRC as soon as you start spending money on your business, such as buying materials, paying for business start-up courses, printing, setting up websites etc.

Below you will find useful advice and guidance on growing your freelance work or business:

Legal structures

Set up as a sole trader (freelance). It is the simplest way to start up, as you have no employees and the greatest flexibility.

You can still pay freelancers/contractors at busy times to do jobs for you or to do the things that you don’t have the skills for. However, you will be operating as an individual and are responsible for all liabilities that come with the business. If the business makes a loss then you do too.

You can work within a partnership in which, typically, two people share business risk, costs and profits between them.

You can form a Limited Company, a separate legal entity owned by shareholders and run according to a Memorandum and Articles of Association which is a either a template from companies house or drafted by you or your lawyers. Shareholders appoint Directors who run the company.

In most small businesses, the Shareholder is the Director and vice versa. It has more obligations in terms of tax and reporting but it offers greater protection.

This should prevent you from losing personal assets outside the company. Accountants and solicitors offer specialist advice on the pros and cons.

Start up a Social Enterprise. ‘Social Enterprise’ is not a legal term but an approach. They have a social mission, aiming to benefit a section of society, protect the environment or serve a community.

They typically reinvest their profits into the enterprise although there is a lot of flexibility in how this works. Social Enterprise UK has more information on how to start up.

The HMRC has a leaflet that explains your responsibilities regarding taxation, VAT, record keeping and employing others.

Useful links:

Business Planning

A business plan helps you to clarify your business idea, consider potential threats or problems, set out your business and profit goals and measure your progress.

Banks and other investors will usually require a business plan if they are to invest in your business.

If you plan to work as a partnership or form a collective, it is crucial that you and your partners should have an agreed vision for the project or business.

There are many example formats and structures for business plans but most will include:

  • A summary overview, including a brief description of the business idea. This section is often completed at the end after all component parts have been written
  • What your unique selling point (USP) / value proposition is
  • Who will be involved in the business
  • How you will offer your product or service. How you will fulfil orders or service requests and costs of production or service
  • Who the target clients are, where they are and how they can be reached
  • A marketing and sales strategy, including competitor analysis and differences
  • Financial forecasts that will show the expected profits

The following links offer some advice on business planning basics:

 

 

 

 

Funding a business

The financial forecast outlined in your business plan will highlight if you can set up or grow your business without needing external finance.

The following are some of the many options open to you as a start-up:

Many start businesses using savings or financial support from family and friends in the form of ‘sweat equity’, i.e. hard work and toil to get an idea off the ground.

Others develop a relationship with their bank and apply for business loans, although in recent years there has often been more caution when it comes to lending.

There are some grants and regional funds available for business start-ups, although these might only be available to certain types of business and in certain geographical locations.

Equity finance involves raising money for your business by selling a percentage in return for an investment by one or more individuals. Business Angel support involves selling a percentage of your business in return for an investment and guidance from an experienced entrepreneur.

Crowdfunding is an increasingly popular way of raising funds by usually asking a large number of people each for a small amount of money.

Crowdfunding can be very public given the profile of your business on a website, which will reveal a lot about your company, so it is worth thinking carefully about Intellectual Property before launching.

There are three different types of crowdfunding approaches to consider – donation / rewards, debt and equity.

There is also the Seed Enterprise Investment Scheme (SEIS) that is designed to help small, early-stage companies raise equity finance by offering tax reliefs to individual investors who purchase new shares in those companies.

There are other options to consider and the following links will help: