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Can I Be a Self-Employed Consultant?

Pros and cons of being self employed
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Are you tired of the daily work routine and crave more freedom? Have you recently been made redundant and looking for a new challenge? If these scenarios sound like you, then maybe you should think about becoming a self-employed consultant.

Do you already have the skills to be a self-employed consultant?

Most people have developed skills throughout their working life that they can put to good use on a consultancy or freelance basis. As the jobs market changes more workers are seeing this as a viable option. From IT and management consultants to writers and designers, the self-employed workforce is continuing to grow.

Why Should I Become Self-Employed?

Setting up your own business is a great way of achieving more flexibility and freedom in your working life. You have the ability to choose the type of work and hours you do. It’s a great solution for parents who need to fit in other commitments and don’t want to rely on outside childcare.

Working on a self employed basis is also more efficient when it comes to paying taxes. Depending on the hours you work and the industry you’re in, you could end up taking home more than a permanent employee.

could I be a self employed consultant?

However, there is less job security as a consultant and you need to ensure you have a regular supply of work. There’s also no sickness or holiday pay, so you should set money aside to cover these eventualities. Many freelancers miss the lack of social interaction, but there are now a number of online sites and forums where you can chat with others in the same situation.

How Do I Set Myself Up?

It’s relatively easy to start work as a freelancer. The hard part is making that leap from full time employment and finding the work. For tax purposes you need to decide how you’re going to work and invoice your clients. There are a few options open to you.

You could become a sole trader, which is the simplest option. You have responsibility for your own financial affairs, including invoicing your clients and paying your tax and National Insurance. This is beneficial for tax purposes, as you can use any business expenses and losses against your tax bill. However, your personal assets could be at risk if the business incurs any debts.

Setting up your own limited company is the most tax advantageous approach, but also leaves you with more financial responsibilities. As a company your personal assets will be separate from the business.

If you don’t want to have to worry about the finances, then working through an umbrella company or recruitment agency could be the answer. They’ll pay you a net salary, but it won’t be as beneficial tax wise.

How Much Can I Earn?

The amount you can realistically charge as a consultant will depend on the sector you work in and where you’re based. Depending on the client you could be paid on a daily, hourly or project basis.

As a rough guide a graphic designer would expect to earn around £175 a day. For a HR consultant the rate would be about £200 a day, but this could rise to as much as £650 in London. Starting rates for management consultants begin at around £300 a day.

Where Will I Work From?

One of the easiest solutions when you’re starting out is to work from home, but this doesn’t always suit every business model or individual. If you work from home you’ll have no travel costs or time, but there’s also the risk that you’ll end up working long hours especially when you’re establishing your business. If you do decide to work from home you’ll need to set aside a separate area, where there’s less chance of being distracted.

Renting a desk or office is a good choice, but there can be substantial costs involved. Try looking for a serviced office, which come fully furnished and are inclusive of bills, or just rent a desk in a shared office. Before making a commitment make sure you check out the full implications of the contract and exactly what’s covered in the rent, so that you can budget effectively.

 

Before you make the step into the world of freelancing you need to ask yourself is it for me and do you have the commitment to make it work? For those that do it can give you a new energy and enthusiasm for work and transform your life.

 

 

 

 

 

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About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

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