26 February 2019

A different kind of hard!

This month we take a quick look at the pro's and con's of sticking two fingers up to employment and going it alone.

Working for yourself vs. working for The Man.  Nothing in it, you might think. Because, for many, being self-employed is the dream. But many also see it as distant, implausible, and a totally impractical kind of dream.

But what if we told you the number of self-employed workers has been on the up since 2001?  Self-employed workers now account for around 15% of the working population.

And this trend is especially strong among young people where the number of self-employed workers aged 16 to 24 has nearly doubled since 2001.  With job security and decent salaries increasingly missing from traditional jobs, working up a company ladder is as foreign to millenials as record players and Spam.  Working as freelancers instead, they’re not at the bottom of the chain nor do they live in fear of a ‘first in, first out’ scenario.

Working for yourself has become the new job security.

Millenials have seen the bright lights of self-employment and they’re not coming back.

“But what about us oldies?!”, you might be thinking.

In fact, not content to let millenials have all the fun, the greatest increase in self-employment is among those aged 65 and above where numbers have grown from 159,000 to 469,000 between 2001 and 2016.

But why? Well, here are some of the benefits:

  • Creative freedom. You make the decisions! You wield the power!  You can pursue your insane ideas without anyone asking you to please leave.
  • You decide your own hours. You can work around existing commitments – like your daughter’s school play (no excuse now). And if you want to work through the night and spend your days skateboarding, surfing, or pursuing your interest in 12th century battle reenactment, you can.
  • Job satisfaction. You call the shots. You do the work. And you reap the rewards. There’s a direct correlation between input and pay-check. And that feels good. Surveys show that nine in 10 freelancers are satisfied with their status, thank you very much.
  • You can work anywhere! Home, cafe, trendy co-working space, the dusty public library, a graveyard…whatever floats your boat. Including a boat. Most importantly, your commute will be a thing of the past
  • Efficiency. You’ll get more done if you can cut out the 1.5 hour train journey to the office. And if you don’t have to deal with those people who walk around the office holding salads and talking loudly to anyone who’ll listen.
  • Flexible salary. You can tailor your salary to your needs. Christmas approaching? Take on more work to confidently meet the demands of your children’s lengthy Christmas lists.
  • You can drink on the job. By which we mean more classy-glass-of-bourbon-Mad-Men style than rapidly-deteriorating-alcoholic-style.

So. Convinced?

Not so fast! There are still drawbacks to being self-employed.

  • You won’t get sick or holiday pay. Or pay for those days when you pretended to be sick so you could go on holiday. Being sick becomes a real nuisance. Stock up on vitamin supplements.
  • You have to do it all. Taxes, National Insurance, marketing, sales, project management. It all falls in your lap now. Although you can consider outsourcing some of these things.
  • There’s no one to tell you to go home. No one to stop you from working ridiculously long hours. But there’s also no one stopping you working ridiculously few either.
  • Loneliness. Even people you don’t like might be preferable to the social isolation of life without a workplace. Can you stay happy without banter over the teabags?
  • Irregular income. In theory, you could be rolling in dough one month and having to sell your soul for toilet paper the next. Financial security requires forward planning and careful decision-making.
  • Success take time. Freelance consulting in particular could eventually generate more than your current salary but it will take time to reach that level.
  • Leaving work at the office: Walking away is difficult when you’re the one at the wheel.

Our Tips:

  • Mindset matters. Do you struggle to do anything without being told to? Do you spend hours on Facebook instead of replying to an email? Is your idea of a goal the kind scored while wearing shorts? Then this might not be for you. To succeed at being self-employed you need motivation, determination, and enthusiasm. You need to set goals (realistic ones) and do everything you can to meet them.
  • But it’s not all or nothing. Consider launching your freelance career on the side of your existing job, working in the evenings or at weekends. Then it’s not quite so risky. Many new consultants get started that way.
  • Diversify your income. Have multiple clients so if one falls through, you’ve still got others to fall back on. Multiple contracts is normally the nature of freelancing anyway.
  • Claim for expenses. Keep a detailed record of all allowable expenses so nothing gets lost when you file your tax return. Here’s a list of all the expenses the self-employed can claim for.
  • Aim to grow. Make the most of down time by working on your business growth plan. Decide on objectives, strategies, marketing plans, and make financial forecasts.
  • Get a raise. If this was a conventional job, you’d have appraisal meetings where you could ask for a pay rise. Plus you are developing and learning new skills so your value is increasing. Also inflation is real. So don’t be scared to ask for more.
  • Choose your type. Decide what kind of self-employment works best for you. Sole trader? You’ll run your business as an individual and keep all your profits after tax. A partnership? Partners share responsibility and profits. A limited company? Limited liability means you won’t be personally liable to debts and losses, giving you added protection if things go wrong.

And finally, apps and software. Because this is the 21st century after all.

Apps for working with others

People can be rubbish. Minimise their rubbish-ness by utilising these collaboration apps.

  • Trello – a collaboration tool that organizes projects into boards so you can see who is working on what, comment, and attach documents and images.
  • Asana similar but more focused on teams than individuals. Great for dispersed firms, allowing you to track activity and reducing the need for emails and meetings.
  • Float – juggle multiple projects from multiple clients, prioritising certain things to improve efficiency. See which team members have which skills, and who has time to take on something else.

Apps for managing finance

Your time really is money now so consider a virtual PA or book-keeper to do your accounts, freeing you up for fee-earning work.

  • Xero – connects bookkeepers and accountants with small business clients. Get invoices paid faster, improve cash-flow, and access real-time account information to make more informed decisions.
  • Quickbooks – manage sales, expenses, and daily transactions. Invoice clients, pay bills, and generate reports for forecasting, planning, and taxes.

Time management

We can’t stress it enough. Time is money. Stop wasting it.

  • RescueTime – sends you weekly reports to show where you are losing time. Adapt accordingly.
  • Focus booster – based on the principles of the Pomodoro Technique (breaking work into manageable intervals), this app helps you handle time pressures.
  • Harvest – one of the best known time-tracking and billing apps. Creates estimates and invoices based on the time worked, and helps you decide how best to use your time.
  • Oh Don’t Forget… – task reminders sent via text. Yes, you’ll be disappointed if you were expecting an affectionate message from your S.O. But this is way better than a to-do list you never check.
  • TextExpander – cut down on time spent emailing. Pre-program abbreviations that auto-insert information, forms, and different email signatures.

And finally, managing stress…

Meditation reduces stress.  So does sleep.  Here’s two apps to help you do both.

  • Headspace – known as a gym membership for the mind. Guided meditations to help you stay calm and perform at your best, everyday. It will also improve your sleep.
  • Sleep Genius – uses sounds to guide your brain through its sleep cycles so you fall asleep faster and sleep better. It also has power nap programs.

So, what does it all mean?

It means this. Being self-employed is hard. It takes determination. It takes creativity. It takes discipline. But it could also take on ‘working-for-The-Man’ any day – and win. Because with the right tools, right apps, and right mindset, those drawbacks aren’t at all unsurmountable. So what do you think? Time to take the plunge?

Cora Harrison, February 2019

Interested in pursuing a different kind of hard?
Get in touch!