1 Do you want to be your own boss?

There are many different reasons why you might think about leaving full-time employment and becoming your own boss. You could have had enough of a formal, corporate environment, for example, or want to run your own business.

Whatever your motivation, you’ll need to reflect on whether or not you’ve got the skills to manage yourself effectively, and in this book we’ll explain how to do just that.

The advantage of working within an organisation is that it provides you with a career path whilst offering you the structure, systems, and resources that help keep your career moving along. Also, if you’re in an organisational environment, you’ll get a regular salary along with a range of benefits. If you work for yourself, on the other hand, you’ll have to create your own structure and systems and be able to cope with an irregular flow of income. Being your own boss also requires ‘big picture’ clarity, lots of energy, and a great deal of self-discipline. However, the rewards are great if you have a desire to take charge of your working life and a healthy ambition to go with it.

Step one: Think about your motivation

You may be contemplating entering the world of the freelancer for a number of different reasons, some of which may have more to do with ‘escape’ than ‘aspiration’! Although your initial motivation may be to get away from a difficult situation, check that this isn’t the only motivator for you to become self-employed—otherwise you might find yourself trying to move forwards whilst looking backwards.

If, however, your current (probably not ideal) circumstances are merely encouraging you to do something you’ve always wanted to do, perhaps it’s time for you to take action. Ask yourself the following questions to check whether you want to make a change for the right reasons:

Have you dreamed of being your own boss for a long time?

Do you think you’ll be able to make better use of your talent and experience as an independent person?

Is there an opportunity you wish to take advantage of?

Do you have a role model or mentor who inspires and encourages you to go it alone?

Do you have a great business idea?

Have you invented a product or a process that you think will form the basis of a business?

Do you come from a family of entrepreneurs?

Whether the trigger to be your own boss is positive or negative, try to have a positive vision of the future. If you can manage this, you’ll easily find the amount of energy and commitment that you’ll need to succeed.

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Many people dream of leaving the rat race and living an idyllic life in a sunny climate. However, the majority fall foul of their dream so if your ambition is to work for yourself abroad, think very carefully first. Will you be able to adapt to a foreign culture and lifestyle? Are you up to speed on the legal aspects of owning and running a business abroad? You need to be totally committed, with everything planned properly. Being on holiday is very different to living and working abroad, so get advice from others who’ve done it before jumping in with both feet.

Step two: Have you got the qualities a freelancer needs?

How well do you know yourself? Although this may seem like an obvious question, it does no harm to review your values, beliefs, and talents—and think about what drives you—to ensure that you’ll be able to rally sufficient personal resources to sustain yourself in self-employment. Try to imagine what it’ll be like to be your own boss and what qualities you’ll need to be successful. The following questions will help you to focus on whether freelancing is the right choice for you:

1 Are you happy to be the sole decision-maker? Often, people who manage themselves find it quite hard to have to take responsibility for every decision that has to be made—large or small. In larger, organisational settings, there are usually precedents to follow or you can bounce ideas off colleagues. If you’re working on your own, you won’t have this luxury.

2 Do you like to be alone? If you’re going to be self-employed, you’ll need to be happy to be alone and autonomous, and enjoy having choice and control. While this is generally true for most freelancers, some do return to a more traditional office or workplace arrangement because they miss the buzz of being around others and the support of collaborating with others who are working towards the same goals.

3 Do you have the organisational skills? Being your own boss demands a great deal of organisation. You’ll need to plan your time to include your marketing and networking activities so that work will continue to flow. In addition, you’ll need to make sure that your books are kept up to date and that you can put your hands on the paperwork related to your finances. You’ll need to deal with invoicing and general office administration efficiently, as well as investing in and maintaining the technology that helps you to communicate with the outside world. All this is before you even begin your work!

4 Are you persistent and disciplined enough? The more tedious aspects of being freelance aren’t exactly motivating –– but they’re still important. Sometimes, you’ll have to be strict with yourself to keep going when you’d rather stop and relax for a while. In truth, you’re rarely off duty when you run your own business and if you don’t attend to the administrative or work-related issues as they arise, they’ll just pile up until they become urgent.

5 Do you complete projects and assignments on time? Remember that you’ll have no one else to blame or cover for you if things get on top of you and deadlines slip. You’re only ever as good as your last piece of work, so you’ll have to maintain the goodwill of your clients by troubleshooting and delivering on promises. If you’re going to miss a deadline, you’ll need to manage your client’s expectations so that there’s no damaging fallout.

6 Will you be able to market yourself by building and managing your network? It’s very common for people who work on their own to dislike networking. Not surprisingly, this is especially the case for shy people, who can find it gruelling to contact people and build their network. Yet networking is a vitally important activity. If you’re to remain on the radar screen of clients who wouldn’t otherwise see you, you need to be proactive and arrange meetings so that they can build a relationship with you face to face.

If you can reply ‘yes’ to the questions above, then there’s a good chance that you’ll make a success out of going freelance—or at least, there’s no harm in making the leap forwards.

Step three: Be clear about what you want to achieve

Most people need a structure and incentives to work: without them, it’s all too easy to let things slip. When you’re freelance, you’ll need to provide these things for yourself. Make sure you know what you want to achieve and what you’ll gain by doing so. In terms of your approach, the most important quality is self-discipline and a commitment to what you choose to do. You need to be able to keep yourself focused and productive even if things aren’t going particularly well from time to time (as they do for everyone).

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Some people want to work for themselves but still retain links and be under the ‘umbrella’ of a larger organisation. If this rings true for you, you might want to consider buying a franchise. However, make sure you do your research properly and find something that will hold your interest for the duration of the franchise agreement. It’s easy to buy a franchise, but they come with a tangle of legalities which are hard to back out of. Talk to some of the existing franchisees and visit the website www.startinbusiness.co.uk/franchise.htm for advice on buying a franchise.

Step four: Think through your financial and contingency plans

There are likely to be ebbs and flows in the amount of work you’re commissioned to do, particularly at the outset when you may not have the experience and stability that will guarantee your continued success. There are key areas you need to consider before you take the plunge, such as:

Do you have a good business proposition? This isn’t so vital if you’re leaving full-time employment and are going to carry on doing the same type of work in your new freelance life, but it is essential if you’re aiming to set up your own business and need to raise funds from a third party. If this is the case, you’ll need a business plan (see p. 11 for a helpful link). Remember to include contingencies that will help you get through the lean times as well as the good.

Do you have a good grasp of possible risks? You need to be fully aware of what might go wrong and have thought about the ways in which you might be able to get yourself out of a tricky situation. For example, it may be a good idea to take out professional indemnity insurance, which protects those who provide professional advice or services.

Do you have a good support structure? Families are often the casualties of those who are committed to making their own businesses successful. It’s very easy to fall into the trap of neglecting your private life when you first go freelance. Making sure you have a support network, whether it’s your family or a professional network, can make all the difference.

Do you have health insurance and a pension? When you work for yourself, you don’t have the safety net that employers provide if you get ill or when you retire. So you need to think about these right at the outset of your self-employment. Don’t be an ostrich!

Have you made provision for your taxation and accounting obligations? Many people find it challenging to take responsibility for their own books, particularly in the context of today’s complex fiscal laws. It’s a relief, often, to be able to hand these over to a specialist and it doesn’t always come at a high cost. However, there are many accounting packages and taxation advice is available freely if you choose to take on this aspect of your business.

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You don’t have to form a company when you become your own boss, but when you start working for yourself you must inform HM Revenue and Customs (HMRC) within three months. Go to www.hmrc.gov.uk/selfemployed for information on how to register.

Becoming your own boss requires robust motivation and brings with it high levels of responsibility, commitment, and energy. It’s easy to focus on the more burdensome aspects of working for yourself, but there are also pleasures. Every time you win a piece of work or are awarded a new contract, you’ll know you’ve done it for yourself. Your earning capacity is as great as you wish it to be and you can choose when you spend time away from your work and when you go on holiday. Although it’s hard work, the rewards are in direct proportion to your skills and abilities. There’s a lot to recommend it!

Common mistakes

You think you’ll get rich quick

Some people see running their own business as a quick way of making money and, because of this, they get embroiled in opportunities that promise an early return and lots of riches. However, it’s important that you aren’t seduced by the apparent glitter of a business idea that you know little about. Make sure that your venture operates in an area about which you are knowledgeable and passionate.

You don’t reserve funds to pay your tax bills

When cash flow is poor, you may be tempted to steal from your reserves to get you through the lean time. However, this puts you in danger of being left short when your tax bill is due. Make sure that you calculate and cater for your tax liabilities as you go along and if you think you’re getting into trouble, consult with an expert who can advise you on the best way forward. HMRC, Chambers of Commerce (see p. 12), the major banks and independent small business advisors are useful resources in these circumstances—so do make use of them.

You go freelance or decide to start a business without making plans

Many people rush into a business and make it up as they go along. But more often than not, this leads to disaster. Make sure you think through the business opportunity from all angles and write a detailed business plan, which will force you to highlight any areas of vulnerability and consider them before you commit yourself. It doesn’t mean you won’t take a leap into the freelance world, but it will mean that you’re prepared and can cater for most predictable eventualities. There are many resources on the Internet that offer guidance on how to draw up a business plan.

STEPS TO SUCCESS

If you’re considering going freelance, make sure you have a clear vision of your objectives.

Think carefully about whether you have the characteristics and determination to work effectively outside a traditional corporate culture—it isn’t for everyone, yet suits some people tremendously.

If relevant, write a business plan. Always consider all the financial implications—how will you get through bad times, do you need insurance, and so on—before you take the route to self-employment.

Remember that a dream and enthusiasm are not enough to ensure success. If you have dependants, it may be worth taking on some freelance work or setting up your own business alongside your usual job for a while. Although this may delay the beginning of your self-employment, it contains the risk long enough for you to work out whether you really can cut the mustard at being your own boss.