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Self-employment is a great way to take control of your career and become your own boss. But it also means you’re responsible for your success, and your income depends on the number of clients you win over.
To succeed in self-employment, it’s crucial to have sellable skills and marketing abilities that help you stand out. In other words, it’s not for everyone.
How do you know if self-employment is the right fit for you? Don’t worry, we can help you ask the right questions.
This guide covers the most important self-employed questions to ask yourself before making the move, including:
- Are you ready for it?
- What are the benefits?
- What will you be giving up?
- What services will you offer?
- How much will it cost?
- How long can you cover expenses?
- What are your funding options?
Personal self-employed questions to ask yourself
1) Are you ready to be self-employed?
Before you decide to go self-employed, you’ll need to consider if now is the right time.
What might ‘being ready’ look like? You’ll need to be prepared to put in the work to succeed. This path can be rewarding, but it takes time and dedication to see results. Don’t expect a steady client base and profit overnight.
Are you ready to move away from your current job and give self-employment a try? It helps to have connections that can jumpstart your career, such as people you could win over as clients.
Ultimately, ask yourself if you’re willing to focus entirely on this transition.
2) What are the benefits of it?
Why do you want to go self-employed in the first place? How can you benefit from it?
People go self-employed because they can control their workday and earn an unlimited income. Your success depends entirely on you.
For some, working for themselves is freeing and far more profitable than being employed by a company with set hours and a salary.
So, when asking yourself this, come up with a list of five or more reasons you want to be self-employed. If you have difficulty coming up with clear reasons, now might not be the right time.
3) What will you be giving up?
If you choose to go self-employed, you’ll have to give a few things up too. So, be honest about what you’ll lose in this transition and if it’s worth it.
For example, self-employment could mean giving up:
- Regular pay.
- Paid annual leave and sick pay.
- Steady work.
- A structured workday and set hours.
- Guidance from a supervisor.
Think about what you’ll need to live without and how you’ll overcome these challenges. For example, you might set money aside from your earnings to pay for your own annual leave.
4) What services will you offer?
Next, ask yourself what you’ll do as a self-employed person. You’ll need a clear idea of how you’ll earn money and what services you’ll offer.
Say you work as a graphic designer at a firm and want to transition to a self-employed graphic designer.
If so, consider:
- Which specific services will you offer?
- Will you need any training for this work?
- Who will benefit from these services? (Your target audience)
- What will you charge for them?
Financial self-employed questions to ask yourself
Going self-employed is also an investment. Assessing the financial risk can help you decide if now is the right time.
5) How much will self-employment cost you?
As a self-employed person, you’ll need to cover the expenses of your business on top of earning money for yourself. So, add up the startup costs and regular expenses you’ll have.
- Startup costs: Any services, equipment, or tools you need to start your business – such as transportation or a computer.
- Business expenses: Regular costs to keep your business running, such as insurance fees, subscriptions, car payments, or rental space.
While you calculate the costs of your business, think about what to charge and how many clients you’ll need to earn a profit.
From there, you can create a budget for working for yourself. To learn more about this, check out our article on how to budget for starting a business.
6) How long can you cover expenses?
Also, ask yourself how long you can cover these business expenses. It could take several months or more to become profitable, and running out of cash won’t help. So, consider your available funds and how long they’ll last.
On top of this, leaving your current employer will take away a regular paycheck. So how will you cover personal expenses, such as rent, groceries, car payments etc.?
Financially planning for your transition will make it more realistic and achievable.
7) What are your funding options?
You may not have a lot of money saved for a transition to self-employment. But if you still want to do it, ask yourself about your funding options.
For example, you may be able to take out a loan, try crowdfunding, or look for an investor.
Whichever approach you choose, be sure to have a clear and well-developed business plan to show you thought it through.
Funding can take some financial stress off your shoulders. But, borrowing or accepting money from others will pressure you to pay it back or succeed in your business for their benefit.
Because of this, you may not want to accept external funding unless you need to.
Wondering if a business loan is the right choice for you? Check out our article on when to get a small business loan.
Plan for a transition to self-employed
Asking the right self-employed questions can not only show if it’s right for you but also help you plan for a smooth transition.
Just be sure to consider:
- What you’ll gain and lose.
- How you’ll do it and if you’re ready.
- What it’ll cost you and how you’ll cover it.
With clear answers to these questions, you can make the right choice for your future.
Also, take a look at our article on self-employment success stories for some inspiration.
Simplify your self-employed finances with Countingup
When going self-employed, your success depends on your finances, so you’ll need to keep them organised.
Why not try a tool like Countingup for this? Countingup is the business current account and accounting software in one app. It automates time-consuming bookkeeping admin for thousands of self-employed people across the UK.
Save yourself hours of accounting admin so you can focus on growing your business.
Start your three-month free trial today.