Section 5: Self Employment
Supporting Director-level Independents
Self-employment means employing yourself – being your own boss.
According to current statistics, 4.7m people are now self-employed in one way or another, a balance between full-time and part-time. Self-employment has accounted for some 45% of all employment growth in the UK since 2008. It is also worth highlighting that the UK is the only G7 country to have seen a significant rise in self-employment this century.
A more detailed analysis of the changing employment picture is set out in Section 4 under ‘The Self-Drive Worker Concept’. The metrics supporting this analysis are based on the ONS monthly employment statistics (EMPOI). You may also like to review some interesting data on www.resolutionfoundation.org.
There is no doubt that the nature of working patterns is changing and this is all having an effect on the UK’s employment law, tax system and welfare state. How does this affect you?
The key point is that you have some options on the ‘constitutional’ way you decide to operate. This section does not go into depth on the technical aspects of Self-Employment (accounting, tax, legal) as these are covered in detail in Section 6 – Technical Topics Contributions (TTC) – under the heading of Accounting and Tax. This is provided by Colin Howe, a specialist in this area and a Principal of the regional firm of chartered accountants, Hillier Hopkins LLP.
This section does, however, set the scene and we make the following points:
- If you start working for yourself, you are classed as a sole trader. There are other business structures apart from sole trader, for example setting up a limited company or a partnership arrangement of some type. Each business structure has different taxation and management implications – see Section 6 – Technical Topics Contributions (TTC).
- Each of these structures has pros and cons dependent on your personal circumstances and what you are trying to achieve. As such you need to discuss them with a professional accountant and possibly a lawyer too.
Overview & Key Points from the Technical Topic Partner
Chris Dunn of The TDA Transitions & Learning Organisation Ltd has been advising senior business people on career transition matters for over 30 years.
If you would like to make a comment that others can read, see where marked TTC at the end of every Section. This where you can make your Contributor comment – which is emailed to [email protected] - and published after screening. Please include your name and contact details so that other readers can get back to you. The real value in this Section– for all Readers – will doubtless come from learning from other Independents’ experiences and knowledge – what works and what does not work – things to do and things to avoid.
To get started as a Technical Topic Contributor click here.
Context and Objectives
The Accounting & Tax TTC topic dovetails with this section as setting yourself up for success and getting the best-fit building blocks in place must be a major consideration.
The focus however for the content that follows is very much about you and helping you to…
- Get your mindset right
- Get your overall approach right
- Put focus on your personal objectives and on the skills and behaviours you will now require as a self-employed professional
The work that you have already done in Section 3 will be revisited but this time within the specific context of your decision to go self-employed – What will be different? What new skills will you need?
Within this section you will be able to revisit and refine your thinking:
- Your personal objectives and goals for your future lifestyle
- Your strengths, achievements, interests and motivations
But, this time, our materials will enable you to ‘anchor’ your responses in the context of self-employment.
So what’s different about Self-Employment?
- You set the business direction and marketing plan
- You decide on the agenda for your business and the whole way it will be achieved
- You find the client, win the business, fix the price and payment terms, bank the revenue
- You manage your own time, business and professional affairs, including your accounts, tax, expenses, legal requirements, insurances, pensions and everything else related to running and managing your business
- You set the arrangements for anyone you ask to work alongside you, you manage their performance and remuneration
- You deal with any performance / relationship issues as the ‘buck really does stop with you’
- Anything financial is personal as it directly affects you, so any spend decision and action comes back to you whether it is for investment or expenses purposes. ‘Is x genuinely recoverable from my client work?’ becomes a meaningful question as does ‘Am I getting good value by attending x conference?’ It’s your sign-off and it’s your pocket. Your company credit card and account is yours.
- Managing your cashflow, handling late payment situations take on a new meaning and it really makes you think about the way you sign-up deals. Business terms, for example, are now down to you.
- The bottom line is that it is personal as there is truly a straight line between effort and reward
The Six Module Self Employment Route Map: Starting Up, Preparation and Planning
To assist you in thinking through the practicalities of “Start Up” we provide you with a DIY framework. To get the best value out of the materials provided please review the Work Module instructions and materials below.
The six modules have been designed to help you think things through systematically. Treat this as work in progress and constantly jot down your initial assessments and core assumptions before pulling everything together to talk them through with your Supporter and accountant.
Modules 1 and 2 focus on you, your skills, behaviours and aspirations and link directly to what you want to achieve as a business. The ‘engine’ of your business is your Marketing Plan which is why we have put this centre stage.
Modules 3 and 4 focus on how you will win business, position yourself in the market and how you will organise and manage your time to get the best possible balance.
Modules 5 and 6 focus on the Business Plan and we provide a format for you to review your progress regularly.
Here are 6 work modules to help you generate your own ideas and thoughts. Feel free to print them off and discuss with a friend, filling in the forms where advised.
Please read the introduction document first as this gives an insight into what the modules offer and how to use them.
- Starting Up on Your Own – How to Succeed as an Independent Consultant or Freelance
- 9 Essential Steps to Start a Small Business
- What You Need to Know About Starting a Business
- How to Start a Business and Ignite Your Life
YouTube has a host of small business-related video clips. These typically highlight the top 10 tips to starting up and they also provide specialist material on topics such as marketing and selling.
To obtain more advice on how to put a business plan together, I would suggest:
- Obtaining a start-up pack from your bank. All major banks have useful frameworks and templates.
- Talking with your accountant
- Talking with other self-employed and small business contacts
- Business Model Generation – Alexander Osterwalder
- The Ernst & Young Business Plan Guide
- Entrepreneur.com – How to Write a Business Plan
- My Own Business Institute – How to Write a Business Plan
- www.lawdepot.uk – This provides information on what should go into a business plan, who should write one and how to write it. It gives access to business plan templates.
The emphasis on business planning books and services tends to be that you are putting the plan together in order to raise monies, so bear this in mind when reviewing your options. I.e. use whatever is relevant to your needs. Take advice before you start!
- Marketing Guide for Small Business
- The One-Page Marketing Plan Audio Book
- The Value Driven Business
- The Art of Client Service
- Flawless Consulting
- The Consultant’s Toolkit
- TheTrusted Adviser
David Maister, Robert Galford, Charles W Green
- Humble Consulting
- SPIN Selling – Situation, Problem, Needs, Pay-Off
(This book is excellent. Neil Rackham is a genius and many sales models stem from his pioneering behaviour analysis into what makes for success in sales scenarios.)
- Newbie’s Guide to Selling Face-to-Face: Quick Start for Consultants, Freelancers, New Self-Employed, Career Changers, Start-ups
- How to Sell Face-to-Face Survival Guide
- Secrets of Question-based Selling
- Relationship Selling: The Fine Art of Consultative Sales
- Selling to the C-Suite – What Every Executive Wants
Stephen J Bistritz
- Consultative Selling
- Consultative Selling for Professional Services
- What Great Salespeople Do
Michael T Bosworth and Ben Zoldan
For those more interested in starting a business, rather than purely marketing your own skills, I refer to the book I co-authored called ‘Starting a Business on a Shoestring’. This was written some years ago in the 1980s but the principles still apply and copies can still be obtained on Amazon if wished. The last two chapters concentrate on Writing a Business Plan and Reviewing Your Business Plan.
Behaviour Profiles: What style of independent will I be? What will I naturally enjoy? What will I need to work on?
I mentioned this previously in this section and in Section 3. It is a profile that helps you to understand:
- Your style and approach to people, events and situations and to your values
- Your core and supporting behaviours
Understanding your behaviour preferences in 121 and group situations becomes much more important as a self-employed Independent – YOU are the business. This type of personal diligence is worthy of high focus. The outputs can be directed to help you run your business more effectively, in particular to help you to get your approach right with clients and to win business.
BASIS can provide you with a personal report which highlights your behaviours divided into three categories – Energy, Exploration and Focus. Less than 2% of people offer a balanced profile with more than 60% showing a strong preference of one particular style. The BASIS model provides feedback based on gaps in your scores, not on the scores themselves. This gives powerful information about your behaviour stock levels and you can see clearly where you are strong and what behaviour areas you need to develop.
A unique feature of BASIS is that it is possible to identify the past and present trends within your overall behaviours – what is rising and what is dropping. This can be very useful to understand your stage and state of development today but it also poses questions as to what you need to work on to handle your transition to Independence.
At rest and under pressure – because BASIS is based on preferences and tolerances around specific enterprise behaviours, it is possible to identify the types of situation that can lead to stress. As such, it can help to explain your likely internal experience in different scenarios and also explain what others would observe.
The original BASIS research was set in the context of entrepreneurial environments – What behaviours best match different stages in the growth of a business? It does not set out to define an Ideal template, there are many combinations that can be successful, but it does set out to enable individuals to understand ‘stock’ levels and to think about their likely responses and plan accordingly. The BASIS report contains an action plan focusing on those areas that are important to develop.
Forewarned is forearmed!
For further information, please contact [email protected]
Pricing as follows:
- Personal feedback report plus ‘key point’ letter with access to telephone support. £97.50 (including VAT)
- 121 BASIS feedback session (1 hour) is an additional £150 (including VAT)
Over the coming months and years ahead, Working Free will expand its Additional Resource references to signpost users to relevant organisations. This will take time and feedback from you, so do let us know about organisations and resources that you personally have found useful.