No more bosses. No more commutes. No more boring meetings. Ditching it all and going self-employed sounds like the dream for many office workers. Each year there are thousands of employees who do just that, take the plunge and pack in their safe, full-time job to begin a new career self-employed and working in a discipline they are a passion about. Yet there are many financial problems that can crop up and must be dealt with efficiently.
Problem: Running your own business, whether it’s just you or you have a few employees working for you, is not cheap. It involves finding the finances to fund all the start-up and running costs, including overheads, travel and more.
Solution: Budgeting at the start is a must, to ensure you can afford to go self-employed. There are many financial options if you need help, from loans and grants for start-ups, to the generosity of family members and savings to help you get started.
Problem: From self-employed freelancers to those running a small business from home, it’s unlikely you’ll get paid for sick days or holidays. This will result in lost earnings and can make it hard to switch off from working 24/7.
Solution: Everyone needs time away from work, so not taking a holiday is not an option. Instead you will need to ensure there is a good enough cash flow to cover a week or two away, which may take a while to build up.
Problem: Self-employed people often struggle to secure mortgages and other financial help, as they are viewed as more of a risk than those with a secure income. This can make it a struggle to afford a new home.
Solution: Thankfully there are specially designed self-employed mortgages available from Saffron Building Society that are tailored for those who work for themselves. Expert help and a reduced rate are just some of the benefits they provide.
Reduced Income Security
Problem: Without the backing of a large company which will have no problems paying you a weekly or monthly salary, self-employment reduces income security. Even if you have plenty of clients, chasing down late invoices can lead to problems.
Solution: There are invoice financing services which can ensure you have enough money to keep self-employment ticking over. Otherwise you may need to reduce your personal outgoings to match the lower incomings and lack of security you now have.