Self employment usually involves starting a business. What do you need to consider?
Starting a business is a major step; it is likely to involve a significant lifestyle change and an upheaval to your finances, at least in the short term. It is not a move that can be undone easily. The list below will give you some idea of the things you need to think about when contemplating starting a business.
Things to consider when starting a business:
Do you have the idea? Have you researched the market and are you confident your idea will succeed?
What are the costs of setting up and the barriers to entry (what will prevent others from copying your idea). Do you have particular skills that will give you an advantage in the market?
What do you know about the various aspects of running a business? For example, sales, marketing, product development, financial management, people management, statutory requirements. Are you prepared to learn on the job or would you be better off getting the necessary knowledge by working for someone else; learning from other people’s mistakes rather than your own?
What resources do you need to set up the business, e.g. finance, premises, equipment, customer and suppliers, etc. Do you know how you will get these? Do you know anyone who will be able to help?
Are the important people in your life behind you? You will need their support. Do you know people who you can go to for advice?
How long can you survive without an income? How much do you need for working capital?
What is your attitude to risk? Can you cope with periods of significant financial uncertainty and career insecurity? How will you deal with the inevitable occasion when your bank account is in the red, the payment you have been promised has not materialised and the creditor you have promised to pay is threatening legal action?