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Top Ten Problems When Self Employed

SELF EMPLOYMENT
Top Ten Problems When Self Employed

Top Ten Problems You Face When You Work For Yourself

Congratulations! You’ve decided to become your own boss. It’s an excellent opportunity to improve your life in every way, especially financially. It’s no wonder so many people are doing it.

  • In 2017, there were 4.8 million self-employed workers in the UK, that’s almost 15% of total workers 1.

However, it’s not all sunshine and rainbows. Here are ten problems you must solve when you start your own business.

Lifestyle

Working for yourself changes your life, but not always for the better.

#1 – It can be lonely

When you start your own business, you spend a lot of time on your own. This can come as a shock to people who previously worked in busy offices. It can be hard when there is no one to bounce ideas off or just have a bit of office gossip. If you’re home alone and lonely, spend a day at a local coworking space. You can also join a networking group. Who knows? You might even find some new clients.

#2 – It’s easy to get distracted

When you don’t have a boss telling you what to do, it’s easy to lose focus. You find the household chores seem a lot more exciting. Let’s not forget Netflix! To start a successful business yourself, you need discipline. Set yourself targets for what you need to do every day. Reward yourself with Netflix when they’re done.

#3 – Your family and social life will take a hit

Money and time are tight when you work for yourself. It’s essential that you let off steam from time to time though. Don’t burn yourself out. Try to remember that as your business grows, you will have more money and can do more things. Take holidays if you can. If you have a partner and family, talk to them about you feel.

Taking out life insurance can reassure your family through these tricky times.

Work

When you start your own business, you have to change the way you work.

#4 – You wear all the hats

Big businesses have a finance department, a sales team, administrators. When you work for yourself, you have to do all these things and more. Many self-employed people find this a shock and have to develop new skills on the fly. Remember that time is your most precious resource. If admin tasks are taking up too much of your time, think of employing a virtual assistant.

#5 – You need to find clients

If you can’t find clients, you won’t have a business for long. You can’t expect clients to come to you if they don’t know about you in the first place. Marketing and sales need to be the cornerstone of your business. Whether it’s face-to-face networking, social media advertising or anything else, get out there and bring in the customers.

#6 – It’s hard to know what to charge

  • 18% of small businesses that fail do so because of pricing issues 2.

Pricing your services is often the hardest part of running a business. At the start, you tend to undervalue yourself and you offer cheaper rates because you’re scared of losing the customer. Have confidence in yourself and the value you provide. Don’t offer discounts that are not worthwhile. It’s a race to the bottom which you can’t win.

Make sure you think about how working for yourself will change the type of life insurance you need.

Money matters

The biggest difference you’ll notice when you start your own business is to your finances.

#7 – With great power comes great responsibility

When you work for yourself, you eat when you earn. It’s a great feeling of true independence, but it can be worrying for some. Make sure you plan how you are going to bring money in, as well as how you are going to spend it. Make sure you budget well and try to put money aside for unplanned essential purchases.

#8 – Famine or feast

Many people who work for themselves find they have brilliant months where everything goes right or terrible months where the wheels come off. There’s nothing in-between. Try to build up a stable pipeline of clients so if one goes, you can replace it with a new one. If your business goes through seasonal ups and downs, don’t panic. Try to budget for these quiet periods.

#9 – Clients don’t always pay on time

It’s one of those things in business that sometimes you have to chase payment. It can be annoying when clients don’t pay straight away, when you know it only takes a minute to set up a bank transfer. Make sure you are clear with your clients about your payment terms and don’t be afraid to send a reminder if they delay. Draw up a set of terms and conditions 3.

The most critical problem of working for yourself

#10 – No safety net

When you worked for a company, you had consistent income. You had holidays, sick pay, a pension. You may have had private health insurance, life insurance or death in service benefit. Now you work for yourself, you don’t have any of that. Not even a Christmas party!

However, sensible small business owners know that they can purchase their own benefits with a few clicks. It brings peace of mind for their family and themselves. It takes the worry about of working for yourself.

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To find out more about life insurance for small business owners, subscribe to Sherpa.

1– “Trends in Self-Employment in the UK.” Office for National Statistics, www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2018-02-07.

2 – Burns, Stephanie. “Why Entrepreneurs Fail: Top 10 Causes Of Small Business Failure.” Forbes, Forbes Magazine, 1 May 2019, www.forbes.com/sites/stephanieburns/2019/04/30/why-entrepreneurs-fail-top-10-causes-of-small-business-failure/#4e883ab67102.

3 – “How to Write Terms & Conditions.” TermsFeed, 10 Mar. 2018, www.termsfeed.com/blog/write-terms-conditions/.

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