Just like there are pros and cons of being an employee, there are pros and cons of being a sole trader.
Some of the most significant benefits of being self-employed are:
You’re Your Own Boss
As a self-employed professional, you have complete freedom over your working hours or days, work location, and breaks. You won’t need to seek permission from a manager to work from home or take a holiday. Your entire working day can be structured exactly as you like it.
You Have More Opportunity To Make Money
When you become a sole trader, you get to manage your finances. This means you can choose what you charge for your work and control your “pay rises”. You can also take on extra or niche work that you wouldn’t have had time for in a full-time job under somebody else’s management.
You Can Choose Your Customers
Perhaps the best thing about being self-employed is that you can choose exactly who you work with. You’ll also have a personal connection with your customers or clients, which will motivate you to provide a more valuable service and give you a bigger drive to do your job well.
Of course, there are some downsides to being self-employed, too. These are:
Reliant On Yourself
As a sole trader, you’ll need enough discipline to show up every day. While in your old job, you might have been able to do less work when you weren’t feeling at your best, being self-employed means that if you don’t work, you don’t earn – it’s that simple. You have to get used to working hard consistently if you want your salary to be consistent.
More Financial Responsibility
Self-employment requires plenty of financial responsibility. You’ll have to pay tax returns, and you’ll also be required to pay class 2 or class 4 national insurance. Additionally, you will need to register for VAT if you have a turnover that exceeds £85,000 a year. It’s essential to keep track of your small business’ finances so that you can accurately file your taxes on the HMRC website.
No Paid Holidays
While you might have been used to taking paid holidays in your previous job, this isn’t the case once you register as self-employed. You won’t be paid to take a week off when you’re your own boss. This is one of the many reasons your pay can be unpredictable and unsteady as a sole trader.