So You Want To Go Self Employed?

…Read this first! 

Loads of us, performers or otherwise, dream of the life of being your own boss, with no one to answer to but yourself – perhaps you’re looking forward to the work-to-life balance others will have you believe exists once you go solo… You might even be dreaming of endless coffee mornings, flexible working hours and round-the-clock fun… But with this dream comes a practical reality check – and you need the commitment, creativity and constant inner-push to make your dreams reality!

Step one – realising what is real and what is ‘the dream’…

Without wanting to put anyone off, most of us look at self employment through very rosy glasses. Yes, there is a different work-to-life balance and it’s an amazing achievement knowing that you earned your own money doing something you love, which puts you directly in the driving seat. How much you earn really is the proof in your worth, and putting in the effort really does pay off. But you really do have to put in the effort! For some the work-to-life balance only exists because they can work from home and spend more time with family, but sometimes the hours can be really long – much longer than they ever were when you were ‘working for the man’. The great thing is that you can make your own timetable, work to your own tune, but you really have to be disciplined to bring in work, and therefore a wage.

Lomogram_2016-04-06_07-30-50-PMDo you love what you want to do?

You will really have to love it to make money from it, especially when times are hard! Having a passion for your art will carry you through the lean times – and there will be lean times! As a performer, there might be certain times in the year where your acts are more popular than other times, if you’re a craft-seller, ditto – your makes (products) might be more sought after in certain seasons etc, etc. Before you embark on the self-employed life, write a little list for yourself of five (or more) things that make you passionate about your art – and put it somewhere prominent to inspire you and re-ignite that fire in your belly if you feel it’s starting to cool!

Is it practical to go self-employed?

Taking that first step from full-time employment with a guaranteed salary to actually relying on yourself to create your own income can be scary – and although it sounds obvious, you will need to make sure it’s practical to take the plunge. Some questions to ask yourself…

  • Has demand for your performances increased? If you don’t perform, but make stuff instead, has demand for your product increased? In both cases, can the demand sustain your lifestyle?
  • Would your current employer allow a more flexible approach to your work – ie let you go part time? A lot of performers and creatives find working a couple of days a week until their business builds up a great safety net to fall back on – at least there’s a wage coming in if times get a bit tough.
  • Are you in a good position financially? Waiting until the time is right to go self employed sounds obvious – don’t do it until all non-essential debts are paid off, that there’s no massive pay-outs that nee to be paid on the horizon… You might want to think about going self employed at another time if you are heavily in debt (don’t worry, your dream will still be there when you are more financially stable – and if it isn’t, it wasn’t meant to be)
  •  Are you confident, committed and careful? These three ‘C’s will get you through any crisis… Confidence means you believe in yourself and what you do – you will need it to push yourself when doubt kicks in. Commitment to your cause, putting in all the hours you need to and more to succeed! You’ll need to be careful with your cash flow – no extravagance, and keeping records of expenditure (personal and business-wise) accounts and budgeting
  • Are you motivated? Motivation will keep you on the ball instead of sitting in your PJs watching Jeremy Kyle when you know there’s work to be done/rehearsals to do/costumes (or products) to make!
  • Have you got any money in the bank as a crash mat? Make sure you have enough to carry you through at least three months if times get bad – three months is enough time for invoices to be paid, work to be found if needed.

Taking the plunge! 

Before you say farewell to your comfortable wage and hello to a life that’s fulfilling creatively, it’s prudent to make a budget plan of your monthly personal expenses. Go through everything – right down to the last cheeky cocktail – of what you currently spend. Highlight non-essential items that could be missed if you need to spend less – ie do you really need that extra take out coffee? Magazine subscription? Make a list of all essential outgoings – eg mortgage/rent, bills – and check your bank statements from the last 6 months for any once-yearly/periodical essential outgoings that you might miss. Compare this list to your projected earnings – you must cover all your essentials for your dream new life to succeed and not be a stressful nightmare.

Be prepared! 

Thinking in practical terms, have you a contingency if you get ill? while you may have been paid for sickness or holiday leave whilst working for an employer, you will need to keep a portion of your new income to cover any lost days – or be prepared to work extra hard to make up lost income.

Tell the taxman as soon as poss…

If you are earning money then you must disclose it to HMRC. It’s really simple to do, just phone up your local tax office (you can find out who this is by entering your postcode and ‘local tax office’ into a google search) and they will talk you through the steps and set it up with you on the phone. You will also need to register to pay Class 2 National Insurance.  Currently, in the UK, you can earn up to £10,600 (this is called your personal allowance) before paying tax. Below is a table which shows you the percentage your income is taxed.

Band Taxable income Tax rate
Personal Allowance Up to £11,000 0%
Basic rate £11,000 to £43,000 20%
Higher rate £43,001 to £150,000 40%
Additional rate – lucky you!! over £150,000 45%

Know how to get paid/basic accounting… 

Another obvious point, but how will you get paid? Do you know how much to charge? How to invoice? how to chase up invoices and keep a record of payment? Keep receipts for everything you spend on your self employment. Everything! You will find everything you need to know about getting paid for performing here

Get insurance!

Surely, to a fledgling performer or creative business owner, insurance is a luxury, right? “I’ll pay it when I’m earning enough!” NO! It can’t be stressed enough, but not being insured can lead to financial ruin if things go wrong… Read about the different types of insurance here

Find others near you who are also self employed! 

Mostly, working freelance can be lonely – you are not constantly on the road meeting new friends and seeing new places, there are times when you will be on your own. Plus your ‘works christmas dinner’ can be lonely if you are working for yourself. Regularly meeting up with like-minded performers who are also self employed and other freelance creatives is great for your sanity, moral support and inspiration. Bouncing ideas off each other, inspiring one another and just generally keeping one another company and delighting in your fellow creatives’ success and achievements – however small they may be (yes, having enough spare cash at the end of the month to treat yourself to cake is an achievement!), is wonderful!

Finally, buying a house? Here’s a tip…

Buying a house and going self employed at the same time probably isn’t the best advice, but sometimes we can’t help the way our cards fall. If you are thinking of buying a house shop around for a low-interest, fixed rate mortgage – this will help you project your out-goings more accurately, rather than a fluctuating rate. Also, hold on to your job until you’ve secured your mortgage… Anyone who is self employed will tell you the minute you write ‘self employed’ / ‘Performer’ / anything creative as your job title on your mortgage application – even if you are earning a huge sum, it’ll become very difficult for lenders to agree a mortgage.

So you’ve done it – you’ve either reduced your hours or you’ve totally gone for it and put your all into your new status! We’re happy for you! We really are! There’s a whole legion of performers who are self employed – just shows you you can do it! And in other sectors, there’s a list of people we love who are all doing it for themselves… We’ll give them a shout out – because we love them…

Karen and Fancy That Vegan Bakery, Stacey and Revue Studios, Dawn and Pole Fitness, Nik and hobos – he’s been running that awesome boutique for longer than we care to mention!, Lolly and Lolly Bird Vintage, Hoosh and HA Photography, the lovely Brennan and Andrew at Mosaic, Wendy at Mozarts, Samantha and Oh So Perfect, Lisa and her Hollistic Harmony, Nettie the listening Helper… Yes, there are lots of you. Plus all the self employed artists we work with…

Give yourselves a big smile in the mirror – we self employed people don’t have a boss to tell us how much our work is appreciated… X

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