How To Make The Most From Being Self-Employed

For many people, the self-employed lifestyle is a tantalising one. It offers the freedom to make your own decisions, and, in many cases, it eliminates the time and cost of daily commuting. The self-employed are able to determine the direction their businesses and assume fully responsibility for its success or failure.

Making the transition to this mode of employment requires adjusting your approach in several distinct ways. Let’s examine them.


The self-employed must contend with a far more volatile income stream than those on PAYE. This is especially so during the early phases of a freelance career. Some months, you might find that business is booming. Others, you might find that things look strained. Smoothing out this inconsistency requires saving up a supply of emergency funds that can act as a buffer. When business has slowed down, you can draw from this supply, and thereby steer your way toward more prosperous times.

Exactly how generous this cushion should be will depend on your circumstances. But as a general rule of thumb, you should work towards saving six months’ living costs. That way, if things look like they’re taking a more protracted negative downturn. You can make the necessary adjustments without fear of being unable to make rent.


Filing a tax return every year might seem intimidating, but the process is actually surprisingly straightforward, provided that you have kept detailed and accessible records of all of your income and outgoings. This includes the money you’re spending on equipment, such as computers, or consumables, such as the petrol you use to get from place to place.

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If all of this sounds like too much hassle, then you might hire an accountant to take care of it for you. This investment can often pay for itself, as a professional will be able to uncover efficiency savings that might have eluded you.


A cash-flow problem can be extremely debilitating for a fledgling business. Often, the cost of interest payments on a small loan are more than justified. In cases where extra liquidity is necessary to keep the wheels turning, you might look to high-street lenders. Alternatively, you might look to online lenders who can provide specialised services. For example, Go Car Credit provides finance for those looking to invest in a new vehicle. Lenders of this sort are regulated by the Financial Conduct Authority. But you’ll still need to form a plan of how you’re going to pay the money back.


As a self-employed person, you don’t have the luxury of holiday pay or a company pension or any of those other perks. As such, you’ll need to account for these costs when you’re making spending decisions in the business. You’ll also need to plan for the time you’ll take out. In some cases, this can be as simple as informing clients that you won’t be available for a given fortnight. But in other cases, you’ll need to make more complex arrangements to keep the business operational during your absence.

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