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 Self-employment

Is self-employment right
for you?
Jemma Smith, Editor
December, 2020

Popular jobs for self-employment

Self-employed vs employed
Benefits of self-employment 
Disadvantages of self-employment 
How has coronavirus impacted the
self-employed?
Is now a good time to go self-
employed?
Skills to succeed in business 
Questions to ask before becoming
self-employed
5 signs you're ready to start a
business

To decide if self-employment is right for

you, you'll need to carry out extensive re-
search. While running your own business
provides many advantages, striking out on
your own requires tenacity and hard work

Starting a business at univers…

According to the Office for National Statistics there

are five million self-employed people in the UK, ac-
counting for roughly 15% of the labour market.

While self-employment may be an appealing career

path for some enterprising individuals, it won't be
right for everyone. Before starting a business, you'll
need to weigh up your options and calculate
whether you can afford to take the risk of setting up
a new business.

Popular jobs for self-

employment
Here are some of the most common jobs for the
self-employed:

Accounting technician
Actor
Acupuncturist
Barrister
Chiropractor
Dentist
Financial adviser
Illustrator
Interior and spatial designer
Life coach
Make-up artist
Musician
Photographer
Private tutor
Sports coach
Web designer
Writer

To find out if your chosen career lends itself to self-

employment see job profiles.

Self-employed vs employed
A person is self-employed if they work for them-
selves as a business owner or freelancer. They run a
business themselves and are responsible for its suc-
cess or failure.

If you're self-employed you don't work for a specific

employer who pays a consistent salary or wage like
an employed person does. You also don't have the
same employment rights and responsibilities as
employed workers.

However, it is possible to be both employed and

self-employed at the same time. You could for ex-
ample work for an employer during the day and run
your own business in the evenings and on week-
ends.

Benefits of self-
employment 
Creative freedom - By going self-employed
you'll be in charge of the decision-making.
You'll have the freedom to explore a number
of creative solutions to problems that arise
and have the satisfaction of seeing your ideas
through to completion. 
Independence - As well as creative freedom,
you'll also be able to set your own hours and
fit your work around other commitments,
which o#en leads to an improved quality of
life.
Job satisfaction - Reaping the rewards of
your hard work can be very satisfying, while
you also have the autonomy to do the things
you love most.
Location - Working from home, if applicable,
means that you don't have to worry about
office politics, company hierarchies or an ex-
pensive and stressful daily commute.
Salary - Your earning potential is much high-
er when self-employed - everything is in your
hands, meaning you can take on more work
at various times of the day. Financially, the
sky's the limit. 
Variety - As you're in control of your work-
load, you'll have the opportunity to work on a
range of projects with a number of clients and
develop new skills. You'll also gain experience
in the different areas of setting up a business,
including overseeing the finances and admin-
istrative work. 

Related case studies

Isabel Sachs

Founder

Disadvantages of self-
employment 
Lack of employee benefits - You won't get
sick pay, holiday pay or any other employee
benefit.
Long hours - Your working day may be much
longer and more irregular than someone who
isn't self-employed. Business commitments
may mean that you spend less time with your
friends and family, or struggle to switch off
from work life.
Responsibility - You're in charge of your pen-
sion, National Insurance and completing your
self-assessment tax return - what's more,
you'll pay tax even if your business makes a
loss. The fact that success or failure is down
to you can increase your stress levels.
Social isolation - You'll miss out on the work-
place environment, at least while you're es-
tablishing yourself as a business owner. Not
only can this be lonely, but it's likely you'll
also have to work harder to stay motivated. 
Starting from nothing - Establishing your
business and building a client base can be a
long, tiring and at times frustrating process.
You'll need determination to succeed and
perseverance, even if progress is slow.
Unpredictable finances - Your income can be
irregular, especially in the early days. You
could go several months without earning a
profit, and you'll always have to pay running
costs such as rent, insurance and internet ac-
cess.

How has coronavirus

impacted the self-
employed?
While there are many advantages to self-employ-
ment the pandemic has thrown its drawbacks into
stark relief. During lockdown those working for
themselves didn't have employee benefits, such as
sick pay or the furlough scheme, to fall back on and
freelancers began to loose opportunities and in-
come as organisations set about cutting costs and
terminating freelance contracts.

The Institute of Fiscal Studies highlighted sectors

most directly affected by the pandemic and its re-
strictions:

accommodation and food

arts and leisure
childcare
domestic services
non-food and non-pharmaceutical retail
passenger transport
personal care.

Is now a good time to go

self-employed?
When considering whether now is a good time to
become self-employed or freelance, you'll not only
need to weigh up the points covered below and the
practical aspects outlined in how to start a
business, you'll also need to consider the economic
impact of COVID-19 on the industry you're thinking
of entering into and on the economy as a whole.
You’ll need to think about how quickly your indus-
try is recovering or is predicted to recover.

If you are planning to start a business it's more im-

portant than ever to conduct extensive research
and seek as much professional and personal advice
as possible. Speak to those who are already self-
employed, especially if they work in the industry
you're planning to enter. How has their business
been affected by COVID-19? Do they expect it to re-
cover and how quickly? What impact has running a
business during a pandemic had on their personal
lives, their finances and their mental health?

If you've carefully weighed up your options and

have decided to set up your own business
discover things to avoid when starting a business.

Skills to succeed in
business 
Success as a small business owner largely relies on
the strength of your product or service. However,
you must also possess the following qualities to
thrive:

Creativity - You must be innovative, imagina-

tive and have the initiative to push your busi-
ness forward with new ideas. You'll also need
drive, determination and enthusiasm to make
them reality.
Knowledge - Having a strong understanding
of your market and customer is vital, while
the willingness to listen and adapt to their
ever-changing needs is also key.
Leadership - Owning and developing inde-
pendent projects, as well as managing a
team, should come naturally to you. 
Organisation - You must be focused and
goal-orientated, able to set clear and realistic
objectives. Working well under pressure and
having strong time management skills are
also important.
Self-belief - You'll need the confidence to
take risks and responsibility for your deci-
sions, as well as the appetite to network with
individuals and other organisations.

Advertisement

Questions to ask before

becoming self-employed
Am I becoming self-employed for the right
reasons?
Does my business idea have longevity?
Am I self-motivated enough to make a suc-
cess out of it?
Will becoming self-employed fit in with my
lifestyle?
Would I enjoy working on my own?
If I become self-employed how will I find/se-
cure work?
Can I afford to become self-employed?
How will I fund my business?
What type of business should I run?
Do I have the right support network in place?
Is the grass always greener?

5 signs you're ready to start

a business
There's no 'right time' to go self-employed. You'll
develop skills and learn as you go along - but if
you'd like some reassurance, you might be ready
once you've:

mastered a professional approach - When

starting a business, you need the confidence
and motivation to market yourself from day
one. Many think that charging a reduced rate
or offering to work for free is what's required
to build a client base, but remember that the
work you're doing will still add value to your
client's business or project and you should be
compensated for this.
found a unique selling point (USP) - One of
the biggest misconceptions about self-em-
ployment is that to be successful a business
must be started by an entrepreneur with a big
idea. Having the right skills, passion and busi-
ness acumen are more important factors for
finding success.
developed excellent organisation skills -
Taking control of every aspect of your busi-
ness is no mean feat. By creating a long-
term business plan, or a weekly to-do list,
you'll have a clearer picture of where your
business is heading.
demonstrated resilience - Starting your own
business doesn't happen overnight and will
require months - sometimes years - of hard
work, and a thick skin. It's a slow process, and
you may encounter rejection from clients
along the way, which can be disheartening.
gained the confidence to build a client base
- Building up a network contacts is crucial for
establishing a client base - as daunting as it
may seem. You'll need the motivation, confi-
dence and enthusiasm to be looking for po-
tential opportunities at every turn when
you're starting out.

Find out more

Take a look at GoCompare's guide to self-em-
ployment.

Written by Jemma Smith, Editor

Prospects · December 2020

Also in this section…

Is self-employment right for you? 

What is an entrepreneur? 

Types of business 

How to start a business 

Writing a successful business plan 

Things to avoid when starting a


business

Freelancing 

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