Running your own business can give you the freedom and peace of mind that no ordinary job can offer. Below, we’ve rounded up ten top tips for sole traders to consider…
1.Set up your business as soon as possible
Becoming a sole trader is simple – all you have to do is sign up on the Government website, and then keep a record of your business’ sales and expenses and submit a Self Assessment tax return at the end of every business year. The good news is that, after paying tax, you’ll get to keep 100% of your profits, so getting organised and signing up your business as soon as possible makes sense. Otherwise, you may have to submit the previous year’s finances and back-pay your tax, which can be time-consuming, stressful and costly.
There are a whole host of benefits of working for yourself, but one drawback is self-motivation. If you’re struggling to know where to start, create a calendar and organise where you’ll need to be, what you should be doing and how long you’ll need to do it for.
3.Get the best deals
Just as you would for your personal finances, you should shop around to get the best value for money on things like rent, marketing and insurance. If you have a van, for example, then you can find cheap fleet insurance quotes on websites such as Be Wiser. It pays to use price comparison websites and haggle to get the best deal – it almost always results in a discount.
4.Start your own website
Your website is your online shop front – it's where people will go to find out about what you do. Whether you're a mechanic or a hairdresser, a website is essential – use a web design tool such as Web.com or hire a professional web design company to create one for you.
5.Do some marketing
Nobody is going to buy from you if they don't know you exist, so do some marketing to get the word out. Consider printing off leaflets, set up social media handles for your business and put an advert in the local newspaper – every little helps in the early days of a company.
6.Save money when you can
Taking out a small business loan can work, but it pays to have money set aside for when you need new equipment or want to expand. Rather than boosting your salary or splashing out on expensive work meals and outings, save money as and when you can for a “rainy day”.
7.Collect money as soon as possible
Whenever you’re hired for a job, you should send out an invoice for the work – that way, you’ll be able to collect money and avoid being scammed. We recommend sticking to email-based invoices, as that way, customers can’t argue that their invoice was “lost in the post”.
8.Monitor your competitors
When you're in the early days of running a business, it's crucial that you identify your competition. Look around to see who else is offering services similar to yours, monitor their marketing and online activity, and see what they're doing differently to you. You can learn a lot about your industry by copying best practices from your competition, so don't be afraid.
9.Set up a bank account
Although you don’t technically need a separate bank account as a sole trader, having one can keep your personal and business finances from intertwining. Get business earnings paid into a separate account that you can monitor, and then transfer wages into your personal account. That way, you’ll be less tempted to spend money you’ve earned for your business.
A one-man-band business can be great fun, but it can also be lonely. Network with other business owners and industry friends, as they’ll not only keep you company when you’re sick of working alone, but they could become useful contacts when looking for new work.