The benefits and risks of running a business

The benefits and risks of running a business

Self-employment. It can sound like the holy grail if you’re stuck in a rut: more freedom and a career with the potential to have more finance and control.

In fact, a recent survey found that  64% of the UK employed workforce currently wants to set up their own business – and a whopping 83% of 18-24 year olds admit that they dream of self-employment.

Many have taken the plunge – there were 4.76 million self-employed workers in the UK in August 2020 with 672,890 start-ups founded in the UK in 2018/2019 tax year alone. That’s almost eight every hour.

The main motivations are the desire for more flexibility and a lack of current job satisfaction – but whatever your reason, if you are thinking about setting up your own business, there are of course a few pros and cons to consider.

So, before you start building your business plan, here are the main things to bear in mind.

Flexibility

Flexitime was a relatively new term just a few decades ago. First introduced in 1970, it has thankfully become the norm for most organisations as they seek to suit all employee demographics. Self-employment, or starting your own business, moves this along into a work-life blend, as it can enable you to embrace a fluid lifestyle that blurs the boundaries between work and home.

Taking a day off at short notice, rearranging schedules, working in the evening, it’s all much easier when you’re your own boss. The flipside of this is that you never switch off. That laptop can sometimes feel like an albatross around your neck – so do take time to close it when you can.

Autonomy

Being your own boss means that you are driving the business journey. It is your vision, your dream and you have the autonomy to follow that vision, without a board of managers pushing you in a different direction to suit the corporate strategy. You have the creative freedom to build your own brand, create your own team and take the path you choose.

Sometimes this can feel lonely at first. It can be quite a leap going from a lively office environment to working at your kitchen table before your business grows. To combat loneliness look into shared workspaces, join networking groups and take time to meet other freelancers for coffees. Mental health in the workplace is too important to be ignored. And it’s good to ask advice and work with mentors, as a second or third opinion will always help!

Financial rewards

It might take a little time to get to where you want to be, but lots of self-employed people or business owners do find the financial rewards to be a huge advantage when it comes to setting up their own business. You are in control of your overheads and outgoings so can drive the profit more.

There is a downside to that financial gain – the risk. A regular monthly paycheck is the thing of the past for many start-ups and small business owners, with shorter contracts; more project work and a less consistent pipeline.

Many love this – ‘the fear’ can drive entrepreneurs to greater success – but it’s not for the fainthearted. Be ready for the quiet months as well as the busy times and have some savings set aside for those months when your income is not where you’d like it to be.

Variety

You are now everything: your finance manager; your own PA; your marketing person; your cleaner; your IT bod: everything. Never a dull moment! And this is what some business owners love. For others, a jammed printer could now be their biggest nightmare, and tax returns… don’t even go there. As business owner or freelancer you now have a lot of hats to wear so but it’s vital that you don’t try to wear all of them. Nobody is an expert at everything and paying for someone’s expertise will save you money in the long term. Especially if it’s a good accountant.

Stress

Those afore-mentioned lean months can be pretty stressful. Larger corporations will have HR teams who will assess the stress levels of their employees and provide advice and tools to manage things.

Self-care is hugely important, so do take the time to monitor your stress levels. There is a vast support network in the UK for someone setting up their own business; from websites such as Start-ups, to government business support groups, to networking Facebook communities. Much of it is free, so do take advantage of all that is on offer and welcome all advice from those who have been there and done it.

Swap that commute for some yoga or meditation, ensure you get fresh air every day and use a journal if that helps. Work-life blend does not need to mean work all the time.