As many of you know, I run a rather small business as a side-line to my primary employment. It's been rather stagnant of late, mostly due to extreme business on my part, but I'm looking to get things back up and running again, with a potential view to going full time with my own company in a year or two. I'm just curious for the thoughts of those on the forum that are self employed, in particular what the biggest challenges are for them, as I want to make sure as much as possible that I don't underestimate / overlook things.

I'm dual status.

There's nothing particularly difficult about being self employed, although with the line of business you do I'd consider limiting the company.

I've been self-employed on and off - mostly the latter of late - for nearly a decade now.

If you've got the drive to push on and make it work, go for it.

Well I have a "normal" 9-5 job - although technically on 24/7 callout

I have my own small business building, repairing computers etc but my biggest problem is finding customers - most now come via word-of-mouth. That's the biggest problem I have - if I could get over that then I'd do that full time and ditch the 9-5 job.

I have a couple of ideas for small businesses to run alongside a primary computer building / repair one, so even if in the long run I'm effectively running several, that's not a problem for me, and also helps avoid the whole 'eggs in one basket' risk.

The biggest challenge is that if you're ill, you don't make anything (unless you employ someone).

Oh, and if you run out of work, you can't sign on or get any benefits (that I can see).

I think the biggest issue is going to be successful marketing of the whichever ventures I go into. Getting that right makes other factors a lot easier to handle.

My initial plan is to spend the time whilst I am employed experimenting with various marketing options to try and find out what works best from the things I try. Yes it's going to cost, and there will be some duff ends, but the knowledge will be invaluable.

Unless you limit your company, make yourself an employee then sack yourself (or pay yourself a low wage so you can claim low income benefits)

Making it a Ltd company has it's advantages and disadvantages. It does require additional expenditure in the form of filing company accounts, but that does kind of force me to make a proper effort at things, you cannot let them stagnate at all.

I've been self-employed all my working life, so my perspective may be a little skewed, but my advise would be to approach it all in a professional, methodical and unemotional way. Even if you're not planning to borrow money, put together a business plan as if you were.

Seek professional advice from an accountant regarding the sole trader/Ltd Company/partnership options - setting up a Ltd Company is like creating another entity that you are bound by law to attend to; as you say, there are pros and cons, and it's best to be advised properly. Similarly with VAT - it's not for everyone, and can be a disadvantage if most of your custom comes from private clients rather than business customers; OTOH, if your business revolves around buying in a product and selling it on at a profit, then you probably won't have much choice in the matter, unless your margins are considerable.

One of the common mistakes is to over-insure yourself; it's easy to get into the whole 'omigod I'm self-employed I must have permanent health insurance, income protection, accident cover, loss of business cover, public liability' etc.. etc.. and before you know it you're committed to £300/month in premiums you don't necessarily need. Worth checking that whatever new venture you're planning doesn't invalidate any mortgage-related life insurance though

Work out what you need to bring in to cover your costs, and to make a tolerable living - there's a handy 'cost of doing business' calculator here - fair warning, it's American so is in $, and relates to my former career (photography) which is based around charging a day-rate so may not be appropriate for what you have planned, but it may still be a worthwhile exercise to see if your idea can generate the income you'd like - or what it's likely to cost. But bear in mind as well that no matter how carefully you crunch the numbers, when you're starting out it's all guesswork!

HTH, Pete

My advice is to get a good accountant. I just let him deal with everything.

Very, very good advice.

+2

+3 - and I don't have my own business

Al