Helpful Tips For Becoming Self Employed

If you have always worked on salary, with a role, an office and a boss in place, becoming self-employed can be quite a shock. You’re used to getting your payslips on time, deferring to those above you and being told how and when to do your job. Being self-employed is a totally different ballgame. As a self-employed person, you will choose your own routine, scheduling and jobs that you do. You can say ‘no’ more often, but you also have to bear in mind the unsteadiness of your income. Being self-employed has its pros and cons – with freedom comes responsibility. Here are some helpful tips for when you make the change to becoming self-employed!

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1. Money, money, money

OK, let’s talk about money. You are no longer on a salary and what you earn as a self employed worker can vastly differ from month to month and year to year. This can be pretty anxiety-inducing for those who are comfortably used to knowing how much they’ll be paid and on which day. Here’s some advice for the financial side of things.

• Standing up for yourself.  If you are a freelancer, you will invoice each individual client of yours, and set a time limit by which the payment must be done. If it is not completed by that date, you can charge a late fee. Do not feel worried about being ‘pushy’ about being paid on time. Some clients will try to stretch the time period between the work being complete and the cheque being deposited. Be clear about your boundaries.
• Plan. The best-laid plans, and all that. As a self-employed worker you won’t truly know how much tax you will be required to pay, so ensure you save more than enough to cover it.

2. Becoming a sole trader or limited company.

As a self employed worker providing goods or services, you can register your name as a sole trader or limited company. But what are these?

A sole trader is a person who provides goods and services and is responsible for all the liabilities and goings on of their business.

A limited company can just be one person, too – if you are Jane Doe and you are a freelance massage therapist, you can become Jane Doe Limited. As a limited company you will pay corporation tax which is often lower than personal income tax. You will also have limited liability, which means responsibility for your company and its products are liable to the company name, not to you personally.

3. How Do I Register As A Limited Company?

If you are self-employed, Crunch can help you register a company. This does not take long and can safely and securely register your limited company, in order to get the benefits of limited company status from your company!