With the current technological advancements, it has become relatively simpler to work for yourself. The trend of self-employment has experienced a drastic increase in recent years. In fact, statistics show that there are 4.56 million self-employed people in 2020, which makes about 14% of all employed individuals in the UK.
The high rate of self-employment can be attributed to a number of factors. These include the simplicity of the process, as well as the chance to pursue one’s own passion. Essentially, the increasing reliance on technology has made it possible for many individuals to find simpler ways to scale their businesses and services.
As self-employment comes with the liberty and flexibility to make your own decisions, more and more people are inclined towards pursuing these opportunities. With you in charge of yourself, you decide the number of hours you dedicate to work, along with the monetary investment that you are comfortable with investing to the business.
One of the most attractive benefits of self-employment is the opportunity to pursue a venture that aligns with your interest and passion. Essentially, passion is the drive that makes businesses stand apart from its competitors. Self-employment gives individuals the chance to instate their business in a field that intrigues them.
With that said, there is significant competition in almost every industry. Therefore, it is essential to come up with a unique business idea, conduct market research, and take the right steps to make the business successful.
The following guide includes detailed tips on how to become self-employed.
Come up with a Unique Business Idea
Before opting for self-employment, the first thing that you need to do is establish a unique plan for your business. Currently, the global pandemic of COVID-19 has created several opportunities for individuals to come up with ideas that facilitate work from home opportunities, along with online shopping ventures.
To get started, here are a few self-employment ideas that you can consider or your start-up business.
- Ghost writing
- Social Media Marketing
- Affiliate Marketing
- Becoming a YouTuber
- Marketing Consultancy
- Digital Marketing
- Accounting and Bookkeeping
- Virtual Assistant
- Interior Designing
- Life Coaching/ Motivational Speaking
- Become a Yoga Trainer
- Personal Training
- Cooking Services
- Pet Grooming Services
- Personalised Jewellery Store
- Mobile Haircutting/ Styling Service
- Makeup Services
- Massage Therapy Services
While all the aforementioned ideas may not be entirely unique, it is imperative to make sure that the service you provide is different from other providers in the market.
Currently, there is substantial competition in the market. Therefore, in order to compete with the pre-existing companies, who have established a name for themselves for decades, it is essential to offer a service that is different and unique to your brand.
For instance, if you are starting a pet-grooming service, you can add the element of exclusivity by creating a mobile shop (you can customise a caravan to create a mobile workshop to offer your services). This way, a larger range of customers can be reached. The idea would also align with the COVID-19 restrictions, as your customers would not have to leave their homes to avail the service.
Conduct Market Research
Coming up with a unique business or selling proposition is no longer enough. In this volatile climate where consumer has infinite choice, it is crucial to fully examine and analyse your options before you step into the industry.
In the case of self-employment, market research is even more important, as it enables you to gauge an idea of the efficient ways to run a business. In every research, the following areas should be considered:
- Who is your target audience?
- What is the buying behaviour of your target audience?
- How diverse is the target market?
- Who are your competitors?
- What do your competitors charge for the same service?
- What are your competitor’s strengths and weaknesses?
Market analysis plays an integral role in the success of your start up. It empowers you to eliminate risks and gather a better understanding of your customers and market conditions.
This investigation further helps identify the uniqueness of your particular brand. It also highlights the areas that make you stand out, as well as find areas that you can make your business better than your competitors.
To carry out a successful marketing analysis, here a few steps that you need to consider:
- Understand the purpose of the research
- Analyse the current state of the industry
- Specify target customers
- Carry out oppositional research
- Analyse the findings
All in all, market research would educate you on the buying behaviour of your target customers. It further enables you to learn about your business’s forecasted growth, while also offering an insight into the cash flow projections. Considering this, market research is one of the best small business advices in the UK.
Unique Selling Proposition (USP)
Every business is required to have a unique selling proposition or a USP. A unique selling proposition refers to the attribute that distinguishes your business from others in the industry. Your USP determines the number of customers that will return back to you to avail your products or services. The USP gives your brand a noteworthy quality that makes it relevant for the customer base.
Follow the ensuing steps to determine the USP of your business.
- List down Ideas
A USP for a business is not limited to a single domain. In fact, your unique selling point could be your website, your product/service, your marketing campaign, or even your experience in the industry. Therefore, to find the right USP, carrying out a brainstorming session can be advantageous. List down all the relevant ideas and narrow down the list later.
- Specify your Audience
The more specific your target demographic is, the better the plan for a USP can be created. You need to examine all the potential customers, on the basis of their identity. For instance, consider their age, gender, income, preferences and online shopping behaviour of the target demographic. Once these factors are determined, the buyer personas can be created that are specific to target audience.
- Study the Competitors
This step is quite similar to carrying out market research. At this stage, you are required to analyse the business of your competitors, in order to figure out the uniqueness of your own brand. To do this, you can make use of tools, such as Google Analytics, to carry out an in-depth analysis of the competing brands.
Essentially, to find your competitors, you must search for the related products and services. Examine their website, social media presence, as well as the traditional marketing incentives they have taken.
- Identify your Strengths
Essentially, you are further required to create a list of your strengths and weaknesses. To truly understand how your business is different from others, it is imperative to create a list of all the features that set you apart from your competition. These may be the price you offer, the discounts, the quality of the products, the free delivery option, level of service or the responsiveness of your customer service. Once your strengths are highlighted, you can formulate a marketing strategy on their basis.
- Examine your Weak Points
Studying your weaknesses is extremely important, especially for a new business. By taking this initiative, you would be able to gauge an understanding of your shortcomings, and subsequently, come up with a strategy to overcome it.
For example, if you have fewer years of experience, in contrast to your competitors, you can elaborate on your strengths to compensate for this lacking.
Essentially, identifying your weakness is important, as it can also enable you to come up with a strategy that facilitates improvement.
- Curate the USP
The final step for creating a successful USP is figure out what makes your brand unique, and come up with a way to integrate it in your marketing strategy. You can use all the information gathered from the previous steps to find elements that make your brand stand out from the crowd.
You can also come up with a product or service that is completely unique from what your rival brands offer. This distinct element would be your USP.
However, finding the USP would not matter, unless you find a way to integrate it in your marketing strategy. One way to do this is by adding precise phrases in your content that emphasise your uniqueness. It is important to create an impact, while also making sure that your message is getting across.
For example, one of the most popular USPs is written by an American company, which is popularly known for selling strong coffee. The brand, called ‘Death Wish Coffee’, claims to be the dealer of the ‘world’s strongest coffee’. The use of this tagline, along with the company’s official name, makes the brand stand out.
Deciding on the Brand / Company Name
Taking the previous example into account, choosing the brand / company name is a crucial step. This is because the business name is the ultimate foundation on which your brand will be constructed around. If there is even a slight error in the foundation, the whole brand would tumble and fall.
Considering this, it is important to make sure that the name is just right before you make the company public. The following factors can be taken into account when you are naming your business.
Identify the name’s function
The company’s name is the initial factor that leads to association with the products and services that you offer. Therefore, the name be constructed after considering the ensuing points:
- Is the name functional?
- Does the name align with the brand’s identity?
- Does the name explain the nature of products/services the business offer?
- Is the name attractive?
- Is the name easy to recall?
All these factors play an important role in making sure that your business is remembered by the target demographic.
Originality is one of the major factors that can make your brand stand out. It is crucial to come up with a brand name that is memorable and original, at the same time. Taking that into consideration, it is imperative to creatively put words together to come up with a unique name that fulfils all of the abovementioned criteria.
In addition to originality, you must also be sure that the name you have chosen is legally available. You can carry out a search on the database of Intellectual Property Office to check whether the name is trademarked. This way, you would not end up in a legal battle that can potentially lose you money.
Consider your Target Audience
When it comes to businesses, the preference of the customers plays an integral role in the decision-making process. This applies to every aspect of the operations, including the selection of the name. Therefore, when you are deciding on what to call your business, you can test out several options to see what is the most attractive to the target demographic. Conducting a focus group can help you identify the name that is more appealing to your customer base.
Choose between a Sole Trader or Limited Company
Self-employment provides you with the option to choose between setting up a limited company or becoming a sole trader.
Sole trader refers to businesses in which the person offering the services (you), and the business itself, are one and the same. On the other hand, if you are running a company through a limited company, it is legally a separate entity from you. This means that you would be the director of the firm, along with being a shareholder.
Both options have their own advantages and disadvantages.
Benefits of a limited company
- You would be entitled to pay a reduced amount of tax
- You would have limited liability
- The business would appear to be more credible
- It would be simpler to raise financial assets
- You would be able to sell equity
- You would be entitled to tax-free pension contribution
Drawbacks of a limited company
- Probable tax costs
- Heaps of paperwork
- Less privacy
Benefits of a being sole trader
- Maximum privacy
- Simpler to set up
- Low start-up costs
- More convenient to change the business structure
- Full control over the decision-making processes of the company
Drawbacks of a being sole trader
- Complete liability in case of being sued by customer
- Less flexibility on the tax system
- Lack of a professional image
- Relatively difficult to find funding.
Register with Companies House
The next step that you need to consider is registering the company name with Companies House. This step is crucial, as it enables Companies House to become aware of the company directors and shareholders.
The process for this is quite simple. You can follow the ensuing steps to get registered.
Step #01: Register with Companies House, which is the UK registrar for companies.
Step #02: Make sure that the name is not offensive, as it can be rejected by the institution.
Step #03: Certify that the name is free from any inference with the government. Avoid using terminologies, such as “British” or “Institute”. Any term that has a slight connection with official services or regulated activities, including that of banking, and non-profit organisations. Moreover, the use of the term, “Windsor” is also prohibited.
Step#04: Make sure that the name of the company is consistent in the documents provided to support it.
Step # 05: Submit an application at the Intellectual Property Office to trademark your company’s name. Although this step is not crucial, it can protect your firm in the long run, as another company might try to name their business similar to yours to profit off of your brand’s identity.
Open a Business Bank Account
If you have set up a limited company, you would be required to create a separate business bank account. This step is not as important for sole traders; however, it is recommended to create a separate account for your business either way.
Opening up a different bank account can help you stay organised with your finances. It would differentiate the monetary funds that you have allocated for the business venture, and separate them from your personal expenses. As a result, there would be reduced chances of errors while making financial decisions.
Choose the right Accountant
Self-employment can come with a number of risks, especially if you lack an understanding of accounting and bookkeeping.
Taking that into account, it is crucial to hire the right accountant to manage the financial intricacies of the business venture.
Finding an accountant is important for a number of reasons. First off, this individual would be able to assist you with filing and completing your tax return in a proficient manner. Additionally, accountants can assist with a number of business and marketing decisions, such as drawing up a business plan, creating a structure of the business and offering advice on opening the right bank account for the company.
With that said, if you do not have a budget to hire an accounting firm, you can collaborate with a freelance bookkeeper or an accountant. This individual would help you manage your accounts, keep track of your receipts, and handle the transaction documents. The freelance accountant would have a lower cost than an accounting firm, therefore, you can get a similar service in a reduced amount.
Launch a Business Website
In order to thrive in this competitive market, it is essential to have a digital presence. A website can help your business get itself on the digital map. You can either build your own website using an off-the-shelf builder, such as WordPress or Wix, or you can hire a freelance graphic and web designer to do this job for you.
If your business involves selling products through an eCommerce website, taking assistance from a professional is crucial. This is because an eCommerce website requires a lot of complicated elements and features in order to be effective.
Once the website is created, it is important to promote it on various social media platforms to augment its digital presence.
Work with SEO and SMM
In the current digital atmosphere, it is not enough to just have a business website. Instead, you are required to make sure that your website ranks on the first page of Google search results. For this purpose, employing the use of SEO or Search Engine Optimisation can be helpful.
Search Engine Optimisation experts employ the use of various mechanisms to make sure that the website’s ranking on Google’s Search Engine Results Page is improved. If you are setting up your business, make sure to hire an SEO expert to be a part of your team. However, you can also work with an SEO firm to work on your digital presence.
In addition to Search Engine Optimisation, Social Media Marketing (SMM) also plays a significant role in building your company’s relevance. Social media managers make use of various platforms, such as Facebook, Instagram, YouTube and LinkedIn, to promote your brand for its target audience.The management of social media platforms does not require technical skills; therefore, you can take on this task yourself. The key to a successful SMM strategy is to create relevant posts, for each platform and publish them on a regular basis.
The combination of SMM and SEO can augment the company’s presence in the digital realm. This way, you would be able to target a larger demographic of customers/clients.
Get started with your Business!
If you wish to become self-employed, you must come up with a unique business idea, conduct market research, curate a unique selling proposition, decide a company name, choose between a limited company or a sole trader and handle the financial aspects of the business. Follow the aforementioned checklist to start your new venture.