Many people dream of some day breaking away from their job in a large corporation and setting themselves up in their own business as a self-employed freelancer or contractor. Increasingly, this scenario is becoming real for more and more people, as self-employment becomes both attainable and practical. However, prospective entrepreneurs still need to keep some basics in mind when setting up a business so as to avoid some of the more common difficulties and pitfalls.
Common difficulties when setting out alone
One of the most difficult parts of starting a new business is covering an initial period without income. In most cases it is essential to secure outside funding, have funds banked in advance, or have a workable strategy for generating funds quickly in the short-term. The first two options – utilizing personal savings or securing a small business loan from a financial institution – may be easier for many individuals; however, using tactics such as up-front invoicing or deposit payments on products, it may also be possible to work on building the bottom line up from day one.
Another difficulty, both in the initial stages and later on, is keeping operating costs low while ensuring a steady stream of income. Business efficiency can often be challenging, both for small and large companies, and hard-earned income should be spent wisely. Time must also be efficiently managed so that more time and effort can be spent on building and running the profitable side of the business than is spent on paperwork and bureaucratic necessities, such as bookkeeping and the tax-related tasks involved in setting up and operating a new business.
Handling finance and administration
Quite frequently, the most problematic areas for the newly self-employed contractor is handling business finances and other administrative necessities. In particular, as the self-employed payroll grows, time and money can be saved by finding an efficient way to manage the associated tasks and paperwork. Using the services of a trusted umbrella company is one possibility that may be well worth exploring when striving to make financial organization more time- and cost-efficient. An umbrella company can also offer assistance with tax related issues, ensuring that figures are accurate and the business is in compliance with current laws and regulations. Using an umbrella company for these administrative tasks can release a new business owner or self-employed contractor from many of the headaches related to the financial and payroll end of the business, which can in turn boost profits by providing more time for the freelancer to pursue new customers and work to strengthen the relationship with existing customers.
Growth in contracting and freelancing
Although setting out in business alone can be quite challenging, there are more and more contractors and freelancers taking the steps necessary to make their businesses succeed. In the current economy, individual entrepreneurs and independent contractors account for a larger proportion of the overall workforce than ever before, and abundant opportunities currently exist for those who have the confidence and drive to seek them out. Additionally, there is an increasingly efficient business infrastructure designed to help support the start-up business and the first-time business owner, so there has never been a better time to set out on your own in business.