Let’s weigh up the pros and cons
The difficulty with working for someone else is that there is a limit to how much money you can make. It makes no difference whether you work extra hard or slack off; you are paid the same. You must either get promoted or find a new job in order to earn more money.
So you put money aside and start your business in your leisure time. It’s time to go it alone if you’ve established that you can make a net profit.
Working from home, renting an office, sharing office space with others, or even purchasing the right to use someone else’s address are all options.
So, what are the advantages and disadvantages of going it alone? Here’s a straightforward example.
PROS
- Make a living doing what you enjoy (or just like a lot)
- You have complete control over your professional life, including when, where, and with whom you work
- Clients, projects, and specialities can all be chosen
- Maintain a healthy work-life balance
- Get things done more quickly and more effectively
- Make more money. After expenses and taxes, whatever is left is yours
- Job security is important. If you irritate one client, you will irritate others. If you irritate your supervisor as an employee, you will be fired!
- The satisfaction that you have made a genuine contribution
CONS
- Uncertain income and the possibility of cash flow issues
- Finances get increasingly difficult, for example, taxation. If you want to secure a loan or a mortgage, lenders will hold you to a higher standard
- There will be no delegation or procrastination; it will all be up to you
- Do everything yourself, including accounting, administration, post, and contracts.
- Overwork and burnout are more likely
- Uncertain income and the possibility of cash flow issues
- There are no paid vacation days. There is no paid sick time. You contribute to your own retirement fund
- Isolation, strain, and loneliness are all factors. It’s all up to you, and there’s no one to turn to for help
When you decide to jump ship, here’s what you’ll need:
Cost-cutting
You require funds. Make sure you have enough money to last two years. While working full-time, you should already be earning money from your project. Don’t quit your work in the hopes of being successful; instead, put your ideas to the test first.
Establishing a base of operations
A bedroom will suffice. A shed is the same way. You can make and receive calls from anywhere. A lone trader just needs to register with HMRC in order to run their business from home.
Get a mail-forwarding address if your landlord answers “No!” when you ask about forming a business at your address. A virtual registered office can suffice if you need to put a limited business between yourself and plaintiffs; you hire someone else’s address. It’s entirely legal and commonplace.
Otherwise, all new businesses would be forced to rent pricey office space from the start.
Tools
In the information economy, all you need is a table, a desk, a laptop, and a cellphone. A shed is also required for a tradesman. On the other side, the professions outsource whatever they can.
Register with HMRC
As soon as possible, register with HMRC. It’s preferable if you contact them first then if they come after you(!) The good news is that you may now file your taxes online. This is acceptable for those who are familiar with accounting jargon and can maintain track of their finances. And who has accounts that are quite easy? Otherwise, you should hire an accountant.
Providers
- a checking account
- a bookkeeper
- A phone number (even if it’s a virtual one will suffice)
- For your logo and business cards, you’ll need a graphic designer
- Webhosting – to host your own website
- For your website, you’ll need a web designer: Maintain a professional appearance by keeping things simple
What should you do?
So, what are your options? There are a plethora of options. So, hone in on a specialised…
Which you enjoy; in which you may excel; in which people will pay you; in which there is sufficient demand; in which there is a healthy net profit.
These factors are crucial because they significantly limit your options. You will struggle and eventually perish if you miss one.
In the United Kingdom, franchising is a frequently ignored alternative. It is extremely popular in the United States. On the bright side, you’ll receive a ready-made product as well as marketing assistance. On the downside, the franchisor receives a share of your earnings and you must adhere to their standards. You are unable to expand into the areas of other franchisees.
What you shouldn’t do?
Businesses fail on a regular basis. It is not possible for everyone to be a winner. In the first five years, 95% of enterprises fail. Retail stores, small restaurants, and direct selling firms are all high-risk businesses. These are the kinds of blunders Joe Public makes because he’s enamoured with the idea of operating his own business rather than the end result. He has no idea where he’s heading and ends up in a swamp.
As a result, you have astute City of London financiers quitting their jobs to try their hand at running a hotel in Provence. That’s not sensible; it’s labour-intensive, with high overheads, long hours, and minimal profitability, and they have no experience with the area or the industry.
After expenses, they move from earning £100,000 to £20,000. If they’re lucky, that is. On the outside, something that appears to be entertaining while on vacation can appear to be quite different on the inside. You need to get advice from someone who is more knowledgeable. First, exhaust yourself by researching the company.
Conclusion
It’s never been simpler to start your own company. All you need is a great product or service, as well as a website. A limited corporation and a virtual office address provide legal protection and peace of mind.
