SELF-EMPLOYMENT

Starting and running your own business.
See also our WORK IN SMALL BUSINESSES and ALTERNATIVE WORK STYLES pages.

 

  • Introduction

  • Ideas for a
    business
  • Qualities
    needed & tips
  • Risks of starting
    a business
  • Franchising
    and Freelancing
  • Self Employment
    Planning Checklist
  • Links

 

Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.

Steve Jobs

PROFILE: SELF EMPLOYMENT

Running your own business includes freelance work, franchising (running a business with the support of another company which has already developed a business brand).
SATISFACTIONS: independence, freedom to make your own decisions & work in your own way.
NEGATIVES: risk of failure, often have to work long hours, may be little reward at first.
SKILLS: determination, motivation, initiative, entrepreneurial skills, resilience, time management, organising, persuading, negotiating, decision-making.
TIPS often easiest to start part-time whilst still working in another job, so still have an income. Prepare a business plan. Businesses which require low initial investment are easier to keep running.

Graduates and self-employmentWork in the circus perhaps?

Some statistics:

  • While only around 3% of graduates report that they are self-employed immediately after graduation, this percentage represents almost 7000 graduates each year
  • This percentage is higher in subjects such as art and design, drama and multimedia/computing
  • Three years after graduation, the percentage has increased to 6 or 7%
  • A Gallup poll commissioned by the EU at the end of 2002 indicated that 67% of UK students would strongly prefer to be self-employed
  • People become happier if they set up their own business. They take responsibility for their own future, and take control of their own destiny.
  • Self employed people are happier about their work-life balance even though they work the longest hours - because they have more control over their time.
  • Office for National Statistics (ONS) video explains the characteristics of self-employed workers in the UK. It compares differences between those who are self-employed and those who are employees, explores the characteristics of self-employed workers in 2012 and looks at changes in the number of people working as self-employed since 2008.

    "Alfredo Moser is a modern-day Thomas Edison, whose invention is lighting up the world. In 2002, the Brazilian mechanic had his own light-bulb moment and came up with way of illuminating his house during the day without electricity - using nothing more than plastic bottles filled with water and a tiny bit of bleach.

    In the last two years his idea has spread throughout the world. It is expected to be in one million homes by early next year."

    See www.bbc.co.uk/news/magazine-23536914 for the full story of Alfredo Moser

Routes into self-employment

  • Often the best way to start your own business is to try to set it up in your spare time while still working in another job (ideally part-time). This will allow you to test the water and establish networks of suppliers and customers while still having money coming in to support yourself. If you can work from home initially, this will avoid the costs of leasing premises until you have something established.
  • Sometimes a group of graduates will get together to form a partnership upon leaving university. This allows you to draw upon the skills of the individual members.
  • Many people will go into business for themselves after gaining initial experience and/or professional training with a larger employer: this is common in fields such as accounting and professional services.
  • One way of running your own business with the support and benefits of a large organisation is franchising - see the tab above.

 

A young man asked an old rich man how he made his money. The old gentleman fingered his expensive tweed coat and said:

“Well son, it was 1932. The depth of the Depression. I was down to my last penny. I invested that penny in an apple. I spent the entire day polishing that apple and, at the end of the day, I sold the apple for two pennies.

The next morning, I invested that tuppence in two apples. I spent the entire day polishing them and sold them for four pence.

I continued this system of polishing and selling, each time reinvesting my profits into buying more apples.”

“Wow!” said the young man, “and that’s how you accumulated your fortune?”

“Nah”, said the old man, “my wife’s father died and left us a million pounds”.

Last fully updated 2016

Careers where you can work for yourself

  • Website Designer
  • IT Consultant
  • Database Consultant
  • Programmer
  • Computer Programmer
  • Computer Auctioneer
  • Software Developer
  • Freelance Journalist
  • Recruitment Consultant
  • Technical author
  • Artist
  • Graphic designer
  • Theatre company
  • Television producer
  • Courier company
  • Running a shop
  • Running a hotel/restaurant
  • Exhibition organiser
  • Accountant
  • Barrister
  • Teacher of English as a foreign language
  • Freelance translator/interpreter
  • Life coach
  • Sports coach
  • Complementary therapist
  • Marketing Communications
  • Consulting Engineer

You can find further information on these and almost 400 other careers at www.prospects.ac.uk/links/Occupations The "Salary & Conditions" section notes the likelihood of opportunities for self-employment and/or freelance work in each occupation.

Some Kent graduates who have set up their own businesses

  • Ian did eight months software development for a haulage company after he graduated. Since then he has worked as a self-employed IT consultant, supporting local companies with IT and developing bespoke software to order.
  • Carole is a life coach, specialising in raising people's confidence and self-belief.
  • Colin spent over 25 years working in advertising and media agencies, in research and media planning. He set up as an independent consultant in 2000 and now provides a range of research-based services to companies in the advertising industry.
  • Margaret is an interior designer, working from her home in Kent
  • Peter retired from the Kent Fire & Rescue Service in 2001 and has set up his own Fire Safety Consultancy, mainly dealing with fire safety legislation.
  • Helena worked for Rough Guides for eight years before going freelance as a travel photographer and writer.
  • Vince spent almost 30 years providing a scientific consultancy service to the railway industry and has now set up his own consultancy concentrating on forensic work
  • Jeni is an independent financial adviser dealing with all aspects of financial planning, both individual and corporate, on a holistic basis.
  • Roger initially trained as a solicitor before turning to advertising account handling. In 1984 he started his own agency, handling media buying and design for business-to-business clients.
  • Ann left the national newspaper where she had worked as Executive Features Editor to set up her own media consultancy business. She still writes for several national newspapers and magazines, as well as doing editorial consultancy work and training courses for media companies. "The decision to move on was definitely the right one!"
  • Michael became a teacher when he left Kent, but in 1980 achieved his ambition of becoming a psychotherapist. He now runs his own centre where he works both as a therapist and a teacher.
  • Moira works as an adviser and consultant on international banking management and training issues.
  • Malcolm has worked in consumer brand marketing with major fast-moving consumer goods companies throughout his career and now runs his own marketing and media consultancy.
  • Anna spent 19 years in a variety of corporate HR roles across engineering, food manufacture, retail, and distribution before going independent. She now provides HR consulting to small businesses.
  • Christopher and Frances run an import-export company dealing with essential oils for aromatherapy products

There are many other Kent graduates running their own businesses in all career areas - some of them can be contacted through the Careers Network for informal advice www.kent.ac.uk/careers/careersnetwork.htm

Qualities needed to work for yourself

Tips on starting a business from www.fatmoose.com

  1. Keep your idea simple: don’t overcomplicate things to early on at the start up stage. Understand the core of your business and how it will be useful to customers. Then build on new concepts that help add value to your core business.
  2. A business is 10% Idea 90% Implementation. Concentrate on the processes you have that operate your business, and don’t be scared to give some details about your business to others who can help you.
  3. Just get on with it: don’t be scared about making mistakes, just know that you will and that each one will be a learning experience, even if you learn just not to waste your time doing things a certain way.
  4. If you are starting a business make sure you are passionate about it and you remained focused, so when the hard times come (and trust me they will come) you remain dedicated to your core business and push past the hurdles.
  5. “Face the brutal facts and never lose faith”: if there’s a problem deal with it head on, and if things are really getting so tough that you start questioning your idea, remember your core business and IF there is still a need for it then never lose faith, it will pay-off in the end.

 

The full fatmoose story is available at www.kent.ac.uk/careers/ivreps/casestudies.htm#fatmoose

 

Risks of starting a new business

Remember that the self-employed and freelancers are usually paid gross (pre-tax) unlike when you are an employee when tax is taken off before you receive your pay. It's important to understand this and to budget carefully for later in the year when you have to pay your tax or you could have big financial and cash flow problems.

 

PART-TIME

FULL-TIME

LOW
INVESTMENT
REQUIRED

e.g. running web design company from home

Lowest risk of failure:

  • no or small loans to pay back. The average cots of starting up a physical shop in £94,000 whereas the average cost of starting an on-line shop is £325!
  • can still work part-time to bring in some income
  • few overheads

e.g. life coach

  • no or small loans to pay back
  • few overheads

 

HIGH
INVESTMENT
REQUIRED

.
  • Need to take out large loans which will have to be paid back.
  • Interest charges placing burden on the business
  • May be other substantial overheads - staff, premises, heating, lighting

 

e.g. running a restaurant.

Highest risk of failure:

  • Need to take out large loans which will have to be paid back.
  • Interest charges placing burden on the business
  • May be other substantial overheads - staff, premises, heating, lighting
  • All or nothing approach

Franchising

Franchising is a way of setting up in business for yourself but with the support of another company (the franchiser) that has already developed a business brand. You run the business, but under an established trade name and under the overall control of the franchiser.

The founder of Kall-Kwik Printing describes franchising as: "A powerful and calculated blending of the best elements in 'big' and 'small' business. An effective mixture of conformity and individuality allowing the franchisee the opportunity for self fulfilment whilst diligently following the proven systems laid down by the franchiser."

There is a huge variety of franchise organisations, from retail to fitness clubs, from plumbing services to catering and from legal services to language schools. McDonald's Restaurants are franchises. The initial costs of the franchise can be substantial.

You are more limited than in normal self employment: you have a contractual relationship with your franchisor covering elements such as quality and operating procedures. A good franchisor will also give you a lot of support as well.

Further information

  • The Ultimate Guide To Setting Up As A Freelancer At University http://bit.ly/freelance-guide-kent step by step guide covering everything you need to know in order to become a freelancer - The legals of setting up as a freelancer, where to find your first clients, how to balance your university workload with freelancing, pitching why you should be chosen for the job, how to manage client relationships.
  • British Franchise Association www.thebfa.org impartial information and many case studies
  • Which Franchise? www.whichfranchise.com
  • FranInfo www.franinfo.co.uk searchable directory of franchise opportunities
  • Franchise Gator www.franchisegator.co.uk information on many UK franchise opportunities. 
  • The Franchise Magazine www.thefranchisemagazine.net

Freelancing.

Working as a self employed contractor is excellent in times of economic boom, but risky in a recession as you are the easiest person to get rid of.

 

Self-employment planning checklist

If you are thinking of setting up your own business at all seriously, then you should try answering the following questions. They will help you to decide whether or not you have a good chance of success as many new businesses fail in the first year.

If you can answer these questions fully, you will have the basis of a business plan to present to a bank manager or other backers to enable you to get funding. You will have been able to identify and hopefully find solutions for many of the problems you are likely to face in your first year of business.


Describe as fully as you can the business you are thinking of setting up. (shop/restaurant, computer software, consultancy, manufacturing etc.).



Why do you want to set up your own business?



If you are developing a new product to sell, how much work still needs to be done?

Who will buy your product or service?(the general public, shops, industry etc.)



Why? (price, quality, originality etc.)



What price will you charge?


Have you made contact with any potential customers? What have been their views on your product/service?


If anyone already supplies this or a similar product/service, how will yours be better or different?

How will you advertise?



How will you distribute?



Who will supply your raw materials and at what price?



What price will you charge and how have you worked this out?

List below all the costs involved in starting up your business e.g.

  • lease of premises
  • furnishings/office equipment
  • stock
  • heating/light/power
  • telephone/postage
  • rent/rates
  • advertising
  • insurance/legal/banking charges
  • vehicle running costs/travel expenses
  • living costs
  • other costs

    Total =

What money/other assets have you got to start your business. List these:



What is the difference between amounts in the last two sections (costs and assets)
i.e. the extra money you will need to set up your business?


How will you get this extra money? e.g. bank loan, loan from family?

What are the main personal qualities and skills you will bring to your business?


Will you have business partners (e.g. family)? What will be their role?


What do you see as the main problems in getting your business up and running?


Have you sought any advice? From whom?

 

Self-employment links