The Crucial Questions to Ask Yourself Before Becoming Self-Employed
Becoming self-employed isn’t always as simple as it seems. Although there are various ways to make money as a self-employed person today, particularly with the growth of the internet, there are still a lot of challenges to consider. For instance, you’ll need to ask yourself how you’re going to fund your business, what kind of customers you’re going to be targeting, and how you’re going to differentiate yourself from your competitors.
If your goal is to become a self-employed expert in 2020, then the following questions will help you to get started on the right track.
1. Are you ready?
Being self-employed seems like a great way to follow your professional dreams and accomplish more in your career. As a self-employed person, you can decide what you want to focus on in your day-to-day life, and you might find that you can sometimes choose your own hours too. However, it’s not all fun and games. There are times when you will struggle as a self-employed person.
For instance, when you go self-employed, you give up the security of having a regular wage every month. Instead, you need to constantly pursue new money-making opportunities, and sometimes your cash flow will dry up. Ask yourself if you’re ready to deal with dry patches in your income before you leave your day job.
2. Can you afford self-employment?
There are a lot of self-employed careers that pay very well. If you have a unique skill to share with the world, or you can offer something that’s in high demand, you can virtually choose your own wages. However, you do need to invest some cash into your self-employment strategy too. For instance, you might want to rent a workspace, which means taking out a business loan. Alternatively, you might just want to buy some extra furniture and tools for your new career, which could mean using a personal loan.
As well as borrowing money, you might also need to think about how much cash you have to put aside to keep you going through bad periods. An emergency savings account filled with about 3-6 months of money to pay for bills will be essential.
3. Do you Have the Right Idea?
While anyone can become self-employed these days, not everyone will be successful. If you want to earn some serious cash in 2020, then you’ll need to ensure that there’s a genuine demand for whatever you’re going to be selling. Do your research for a little while, checking out what kind of money other people in your industry are making from a self-employed income.
It might also be worth spending some time on your self-employment career in your spare time before you give up your full-time job. Think of pursuing your interests as a part-time hustle, rather than something that you rely on completely for all of your income to begin with. This will help you to see first-hand how lucrative your idea is.
4. Do you Have Enough Support
What’s going to keep you motivated and in the right mindset as you begin your self-employment journey. As fun as it might be to go self-employed in some cases, it can also be extremely challenging. There will be months where you’re not sure whether you can pay the bills. You might deal with difficult clients and customers that leave you questioning your skills and abilities. You’re likely to have a lot of different emotional reactions during your time as a self-employed person.
Having a good support network around you can significantly improve your chances of success when you leave your traditional workplace behind. Make sure that you have people around you to keep you in the right frame of mind.
5. Do you know anything about taxes?
Finally, when you go self-employed, you agree to take on the challenges of dealing with your own taxes and payments to the government. While you can pay for a professional accountant to do some of the work on your behalf, you’ll also need to learn the basics about which deductions you can claim and which information you need to provide to HMRC, so you can keep the right documentation for your business.
The more you know about your tax situation, the easier it will be to avoid any dangerous run-ins with the tax system when you begin your life of self-employment. Don’t forget that you need to save for your own retirement too. No-one but you will be thinking about your future.
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