If you're seriously considering going self-employed and starting up your own business, it's important to remember there are a number of hidden costs associated with doing so.
Depending on the type of business you are looking to start, stock may be your biggest initial investment. This will, of course, vary from business to business, but also from sector to sector. For example, a graphic designer will need a computer with up-to-date software whereas a carpenter will need his own tools and a commercial van.
Another big consideration will obviously be your business premises. Some of you may be lucky enough to be able to work from home, or even remotely at a client's building, keeping costs down and helping you get on the right path early on. Other businesses will need a separate location, such as a shop front or warehouse. If you're planning to buy or rent a building, you should always factor in the cost of doing so - as well as additional equipment.
Everyone's favourite topic up next - tax. It simply cannot be avoided but is easy to overlook when you're self-employed. When you work for someone else, they are in charge of taking care of your income tax and National Insurance contributions, but going self-employed means you'll have to take this duty over for yourself. Remember to register for a Self Assessment tax return and complete this every year on time to avoid a hefty fine.
One of the biggest drawbacks about starting your own business is that you'll instantly lose any holiday or sick pay. If you choose to run a business or go freelance, you'll only have the money that you've earned to live off - this means if you miss an appointment with a client because you're ill, you won't be paid. On the flip side, being your own boss means you can rearrange this appointment to a time that suits you when you've recovered.
Don't forget your pension either - becoming self-employed means you'll need to focus on paying into your pension when you can. There is a range of different options for freelancers and small business owners when it comes to pensions, so check out this site for more information.
If you need any further assistance setting up the insurances for your new business, call us today on 01202 754900 for advice and guidance.