When you’re starting out as a self employed tradesperson, there’s a lot to learn, a lot to think about, a lot to remember and a lot to get done. With such a steep learning curve to contend with all by yourself, it’s little wonder that many self employed first timers run into roadblocks and pitfalls.
It may all be part of the learning process, but it’s often better to avoid these hitches in the first place, rather than find yourself on the back foot.
To help you navigate the tricky first few months of self employment, we’ve put together a quick guide to three of the most common problems new self employed tradespeople fall into. Keep these potential pitfalls in mind and you can avoid many of the problems your peers will confront…
1. Diving in head first
Perhaps your current boss is driving you insane. Or maybe you’re really eager to start working for yourself after completing an Able Skills course. Hold your horses! Before you make the jump, you need to make sure you’re prepared for the change financially and practically.
Do you have all the tools and vehicles you need? Do you have clients ready to take you on? Do you have marketing materials ready to go? It’s wise to save up a little money and to start drumming up business before you quit a day job – this will tide you over during your first few months as a self employed trader (which can be a bit lean).
2. Ignoring your finances
You may be used to a payslip once a month from your employer, and a healthier looking bank balance on the 30th. Unfortunately, this is not how money works when you’re self employed. You need to get hands on from the very beginning, registering for self assessment, setting up National Insurance contributions and keeping clear records of your income and expenses from day one are essential. Fail to do so and you’ll quickly find yourself in a big mess – and potentially big trouble too.
3. Not investing in insurance
It doesn’t matter how small time you are, if you damage a person or their property, you could face serious legal and financial consequences. If you are not protected by public liability insurance (you may also want to look into professional indemnity insurance), you could find yourself with an extremely hefty bill to contend with which will run your business into the ground almost immediately. Be smart – get cover.
Are you a self employed tradesperson? Which pitfalls did you fall victim to when you were starting out? Share your experience with newbies below.