Taking the leap to become self-employed comes with a significant number of risks. If you’re used to receiving a regular salary from an employer, starting your own business or going freelance is understandably incredibly daunting. However, self-employment can bring with it a number of rewards, from job satisfaction to an increase in pay. But because it also has the potential to put a strain on your finances, many people never give it a go.
While there will always be some risk when heading out alone, there are lots of things you can do to minimise the chances that something will go wrong. Take heed of the following advice and start your business with caution:
Public liability insurance
If you’re setting up a shop, becoming a tradesperson, or will have members of the public visiting you in an office, chances are you need public liability insurance. This probably won’t be the only type of insurance you need, but it’s a good starting point. Basically, public liability insurance provides you with protection if any members of the public are hurt on your premises or as a result of your actions and also covers any damages to their property. Without insurance, you may be liable to pay a large sum of money, which could bankrupt you. If you’re still not sure if you need public liability insurance, head on over to Checkatrade to find out more.
Not all businesses work out and even the ones that do, don’t necessarily grow quickly. Most people can’t afford to spend months or even years struggling to pay their bills, which is why lots of entrepreneurs start off part-time. This means you’ll be able to keep your current job and steady income while working on your business on the side. While this means you will be working more, it’s worth sacrificing your time to secure your financial future.
When the time comes to launch your business full-time, you’ll want to make sure you have enough savings to tide you over if anything goes wrong. Some months may be slower than others for businesses that sell seasonal goods, while some freelancers could have cash flow problems or difficulties chasing payments from clients. Don’t assume you’ll have a regular income, especially in your first year of trading, so always have something to fall back on. Don’t forget, that you will also need to set aside cash to pay your taxes at the end of the year.
Do your research
Give your business the best chance at success by doing your research in advance. This means scoping out the competition, understanding your customers’ needs, delving into the best marketing strategies for you, and doing your homework before taking out any loans. It’s also a good idea to anticipate potential off-seasons and situations where business might decline. Being as informed as possible will help you to avoid unpleasant surprises on the road ahead.
Starting a business always comes with a bit of risk, but how much risk is entirely up to you.