There’s never been a better time to strike out on your own. We have the rise of remote work to thank for that – now that the world’s office workers have learned how to work from home, many are choosing to do so.
But before you join the masses, a moment. Working for yourself comes with responsibilities that few anticipate. In today’s blog, we’ll lay out the most important things you could consider before embracing self-employment.
Your Work Space
Working from your couch may seem like good fun, but try doing it for eight hours straight. Afterwards, your back will ache, as will your neck.
If you’re going to commit to the freelancer lifestyle, you need a dedicated workspace. So, pick a quiet spot and set up there. Guest bedrooms work well, as do basements.
But what if you can’t find a secluded space in your home? Increasingly, co-working spaces are becoming available. In these spaces, you can rent anything from a hot desk to a private office at affordable rates. What’s more, your rate comes with extras like snacks and access to workshops.
Unless you’re working remote for an existing company, client acquisition is now your responsibility. So, to keep food on your table, you need to establish a prospecting system. And, you can’t just set it and forget it – once a contract ends, your income falls to zero.
To keep things from going pear-shaped, you must prospect regularly. By contacting new potential clients on an ongoing basis, you’ll keep your pipeline (and your wallet/purse) full.
Without question, enhanced benefits are one of the most attractive aspects of full-time employment. The gym membership, full dental coverage, and paid sick days enhance your life in ways you don’t realise – that is, until you’re no longer an employee.
As a self-employed person, it’s up to you to procure these benefits. Yes – things like gym memberships, enhanced health plans, and income protection cost money. So, keep their costs in mind when setting your rates.
Most people love to complain about taxes. After all, who enjoys watching 20% to 45% of their income float away? But compared to entrepreneurs and freelancers, employees have it good. For the most part, taxes owned by the average worker is automatically deducted from their paycheque.
When you’re self-employed, though, you are your own payroll department. Many new freelancers don’t realise this, so they end up in a tough spot at tax time.
As a self-employed person, you should always set aside 30% of your income for taxes. Now, this is a huge chunk of money, so after costing out your needs, wants, and benefits, add 30% to your rate.
It may not seem like it, but losing your manager is a double-edged sword. Sure, they make you feel guilty for shopping/playing games on company time, but little would get done without them.
As a self-employed person, you’re your own manager. Don’t laugh – deadlines can creep up on you faster than you ever thought possible. If you don’t stay on top of your work, you might lose clients as quickly as you find them.
With Greater Freedom Comes Greater Responsibility
Whilst the growing pains experienced by newcomers are considerable, self-employment can be immensely rewarding. Cover the crucial points mentioned above, and you’ll increase your chances of success.