Many people in the UK want to become self employed but they are concerned about landing flat on their face. Nobody wants to fail.
What about things like tax returns, setting up a budget and dealing with lean times when there is no work? The vast majority of wannabe self employed workers stay exactly like that…wannabes who will never be, unless they take the plunge.
One guy that did take the plunge 1 year ago is John Fitzsimons, and he is not alone. According to recent statistics during the last 12 months 174,000 people in the UK have also done the same thing, which means the number of self employed workers now stands at 4.7 million.
It could be more though, and it probably should be, if more people just had the knowledge and power to fire their boss and go out their alone…to be their own boss.
The good news is that guys like John are giving us an insight into what its like to work for yourself in 2017, as he recently wrote down some of the lssons he has learned over the last 12 months.
Save money for your tax bill
One of the differences between being self employed and working for someone else is that you have to sort out your own tax bill. No longer is it simply taken out of your wage slip, when you work for yourself you have to fill out a tax return…and then have enough cash to pay it.
John heard about many people who don’t save any money for thier tax bill and then find themselves in financial trouble. That’s why he decided to to setup a seperate savings account and then transfer 40% of his income over to the account.
This way he knew for sure the tax bill would be paid on time which meant he could focus more of his time and effort on making money.
Some months are good, some not
When you are in traditional employment then typically the work is there every day, every month…all year round. However, when you become self employed the script is flipped so to speak, and it’s not uncommon to find some months being a bit lean when it comes to clients and work.
According to John, the main thing to keep in mind is that as long as you are having some months where you are exceeding your financial targets, then at the end of the year it all evens out.
In other words, you can afford to have a few months where the money isn’t exactly rolling in. So put your feet up and relax, and get ready to work really hard when you have more work than you can handle.
Hire an accountant
It’s amazing how many contractors, freelancers, and business owners completley neglect their books, and then in December they are rushing around trying to get their tax return together.
John didn’t want to do this, and that is why he hired an accountant straight away and then kept detailed records of all money that came in and went out.
Needless to say, when it came time to fill in the tax return John and his accountant were completley chilled out with no mad rush to get everything done.
Treat it like work
One of the main pitfalls that many self employed people fall into, especially those who work from home is having a lack of schedule. They become “too flexible” and it’s not uncomon for a morning watching the TV turning into a whole day watching the TV…followed by a 2am work session.
The main problem with this is that it lacks structure and pretty soon you can find yourself not knowing where work ends and your free time begins.
That is why John set out the exact hours he was going to work and the exact hours that were for his free time. He also turned off email alerts on his phone when he wasn’t working.
All good tips if you ask me, and certainely some actionable advice there for anyone who wants to become self employed.