10 things to know before going self-employed

It’s no good. You’ve watched the (reasonably) warm weather from your office window too much this summer. You’ve tormented yourself with ideas of going it alone so you too can ditch the 9-to-5 and live life flexibly, pursuing your passion with passion.

You’re not alone. There are now almost 5 million self-employed people in the UK, according to the latest UK labour market statistics.

And that is alongside the rapidly growing number of “side hustlers”, people who have their own business that they run alongside their day job. Data from Henley Business School shows that almost two-fifths of employees also have a side hustle and they expect that to rise to half the adult population by 2030.

So if you are considering making the jump and becoming self-employed, what are the things you should know before you take the plunge? We asked some of the UK’s self-employed workers for their top tips for wannabe freelancers, contractors and the self-employed.

Here’s what they had to say.

Save first

Ditching your day job is a big step for people who enjoy doing things like buying food and paying their mortgage or rent. Having some savings in place first can be key, as many respondents say.

“Have savings. It may be a slow start,” says Cath Garvey, a freelance illustrator and comic artist.

“If possible, have savings or some financial support to get by for a few months,” agrees Thomas Ali, who runs the spice range company Freshly Spiced with his wife. “Whilst you may have lots of sales coming in, you may find you have one slower month or some unexpected expenses that you hadn’t planned for. You don’t want to put extra pressure on yourself and family if you can avoid it.”

Manage your money

There is a lot to do when becoming self-employed

“Put [a percentage] of every invoice away for tax and rainy days. Do your accounts at the end of each month, not each year,” says Chris Ford. He’s a senior lecturer in sports journalism at the University of Gloucestershire and also provides freelance services.

Of course, that’s just one element of success. He adds: “Be nice to everyone you meet in the working world from the cleaner to the CEO.”

Consider getting an accountant

Not every self-employed person needs an accountant and it is an extra cost that some may prefer to avoid. But lots of people told us that getting an accountant was key to making it work well.

“Get an accountant,” urges Sarah Thorp, founder of Cobalt Communications. “It’s time-saving so you can be working, money-saving – so you don’t balls your tax up – and stress-saving, so you can stress about other things.”

Nina Sawetz, founder and MD of PR agency Future, agrees: “[It’s] amazing how many people think it’s not worth it, and then struggle when HMRC bombard them with filing notifications. They are cheaper than you think and it’s absolutely worth it.”

Set work/life boundaries

When you’re an employee it can be difficult to stop work from creeping into your home life. For many self-employed people, it’s the other way around.

“Make sure people know you’re at work when you’re at work,” recommends Joe, the man behind the ThriftyDad blog. “Working from home my extended family think I’m available whenever they need me to do whatever chores they need - pick up nieces from school, available for a brew and a chat whenever. I’m working! Set some boundaries and put a lock on the office door.”

Use some tech

There may never have been a better time to go freelance than today, with so many apps and software packages out there designed to help.

Melissa Cole, the author of The Beer Kitchen, says that tech can really help self-employed people stay on top of their finances. “Research the free accounting packages out there, like Wave, they make your life so much easier with scheduled invoices and templates,” she says. “And always, always put payment terms on your invoices, and get a contact in the accounts dept to avoid annoying the in-house contact that gives you work.”

Try to enjoy it

Find a job you love and you’ll never work a day – or whatever the saying. But when you are freelancing, that enjoyment becomes even more important.

Simon Paine is co-founder and CEO of the PopUp Business School and says: “Once you’ve made sales, you’ll know if you are really cut out for self-employment. It does feel different and enjoyment is key. It’s not just about being passionate about your work, it’s enjoying the activity that you have to do every day to make it work, and that isn’t for everybody.

“Do a little bit every day to grow your business. Remember to make time to connect with people – it’s easy to get lonely and melancholy if you spend too much time alone.”

Don’t work with just anyone

If you have the wrong clients, you will spend a lot of your time chasing bills and satisfying endless additional questions and requests.

Andrea San Pedro, the founder of ASP PR, says it’s worth vetting clients before taking them on: “Be choosy with which businesses you work; you must vet them for reliability and integrity of character in order to make an educated assessment on whether they’ll be an ideal client. There are plenty of businesses out there who treat the small guys with disrespect. There is no place for those kinds of people in enterprise.”

Look before you leap

Many British workers have a side hustle and for many, that is one way of easing the shock.

“My best tip would be to start it as a side hustle before making the full jump,” says freelance search engine optimisation worker Ryan Scollon. “It can be a big shock when you get close to payday and realise you don’t have that big paycheque that you have become accustomed to in your full-time job.

“Start doing work in the evenings and weekends. It will be difficult and you will feel a complete lack of social life, but it makes the transition much easier as it allows you to have some work and momentum on your first day as a self-employed.”

Find some support

With a growing army of freelancers and contractors out there, it’s easier than ever to find support from organisations and peers. And lots of self-employed people recommend doing so.

“Join a small business organisation like Enterprise Nation or the Federation of Small Businesses,” suggests Emma Maslin, a chartered accountant who works as a money coach and mentor. “For a small fee, you’ll get expert guidance on so many things from legal to marketing and everything in between.”

Chloe Jepps, head of research at the Association of Independent Professionals and the Self-Employed (IPSE), agrees: “Remember you aren’t alone. One in seven of the working population is self-employed so you are in good company. Joining a group like IPSE will give you support and advice, as well as networking opportunities to connect with other freelancers.”

Know your worth

Choosing a rate and sticking to it can be really hard, especially in the early days when work may feel hard to come by.

Dom Burch, the MD of strategic marketing consultancy Why Social?, has a fairly bold rule for setting pay expectations. He says: “Work out your day rate. Double it. Take a deep breath. Say it out loud. Don’t apologise. It’s not a day rate, it’s 20 years or whatever of experience, insight, knowledge and network. They can always say no or offer less.”

As many self-employed workers will attest, that last tip may be easier said than done.