Self-employed quick wins when you’re starting out (Part 1)

by QuickBooks UK

3 min read

More people in the UK are working for themselves. About five million (4.8) are self-employed, or one in seven of the workforce, according to the Office for National Statistics.

Going it alone can be exciting but it can also feel daunting because there are so many tasks (financial, administrative, commercial) to juggle. Here are some tips for the newly self-employed, and those who are planning to.

Networking

It’s not what you know, it’s who you know, goes the adage. It’s still relevant for business now, particularly for the self-employed who when starting out probably don’t have the support of a large company to help them make new contacts and win new business.

Networking (meeting people to form business relationships and create opportunities) is a multi-billion-pound industry. Types of networking include networking groups you pay a fee to join and which have regular events, mainly over breakfast (such as BNI), free ones; business groups such as the Federation of Small Businesses (FSB) and Chambers of Commerce; trade unions and networking groups for different professions or trades; and more informal online networking groups (sometimes on LinkedIn and Facebook).

Networking in person can feel awkward − who to talk to and what to say.

Networking experts such as Sue Tonks, who advises business people on networking, says that when walk into a networking event you should look for groups of people in an open shape, so there’s space to enter the group and join the conversation.

Having “icebreaker” conversation topics (e.g. the weather, where the person has travelled to the event from, why they joined the networking event) can also help avoid awkward silences. Small talk can help build rapport before discussing business and possible opportunities.

If there’s a business opportunity suggest meeting for a coffee within a few weeks.

For more advice on networking, try a business web site such as startups.co.uk, or a book (e.g. the ‘FT Guide to Business Networking: How to Use the Power of Online and Offline Networking for Business Success’, by Heather Townsend.

Social Media

More than one quarter of the time we spend online is using social media, research by GWI suggests.

Social media, including twitter, Facebook and LinkedIn, can be a distraction. But used well, it can raise the profile of your business and help keep you in touch with trends in your market.

After picking the right platforms, work out what you want to say, how often, and what you want to achieve (e.g. get a reputation for expertise on a subject, attract new customers).

Whatever you choose to share (an image, an answer, an opinion) ensure that it fits your brand’s image, the FSB advices.

Quality is more important than quantity. Are the words or images you share must be valuable for your audience? Is it new or useful or thought-provoking? This type of “content marketing” can be cheap and effective. Start small, with a short blog on your web site, or LinkedIn, then share it elsewhere.

Sharing content from experts in your industry can also be a good way to raise your profile.

You can use analytics software (e.g. from Google) to help you understand how customers use your site and work out how to improve it.

Tax/finances

If you start working for yourself, you’re classed as a sole trader – even if you haven’t yet told HM Revenue and Customs (HMRC).

You’ll need to register as self-employed to make sure you pay the correct income tax and National Insurance. The government’s web site (gov.uk) has clear and extensive guidance on this and all parts of tax and self-employment.

If you don’t want to be a sole trader other options include becoming a partner in a business partnership or setting up your own limited company.

If you set up a limited company, you’re not classed as self-employed but as both an owner and employee of your company. You’ll follow different rules on tax and National Insurance. For example, you’ll need to register your private limited company with Companies House and pay corporation tax rather than income tax. You can draw your income through a combination of salary and dividend payments to (legally) minimise your tax bill.

An accountant can help with book-keeping and annual tax return and making you sure you claim all possible tax reliefs, allowances and businesses expenses.

You must register for VAT if your turnover is over £83,000. You can register voluntarily if it suits your business, for example if you sell to other VAT-registered businesses and want to reclaim the VAT.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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