Piggybank News

May 12, 2008

The self employed revolution.

Recent research commissioned by Vodafone UK, found that 12% of the UK’s working population have set up their own business and that a further 33% of people are seriously considering dumping the rat race to join the ranks of the self-employed. So what is behind this silent revolution in the UK’s working life?

One simple reason is that employment is no longer as secure as it once was. There is no such thing as a job for life in the 21st century. Almost every person you speak to has either been made redundant at some point in their career or knows someone who has. Starting a business may seem like the obvious choice to someone who has just been made redundant but increasingly people still in employment are also beginning to look for a “part time thingy” to run on the side “just in case”.

The pension’s crisis may have something to do with it as well. It has become clear that relying on a company or government pension to provide for your old age is simply not an option for today’s 30 somethings.

Self-employment is also often a logical choice for women returning to work after having children. Out of date qualifications can make it difficult to find a job and despite anti-discrimination legislation there can still be resistance to allowing time off if the children are sick or need to be taken anywhere. Childcare fees also account for a huge chunk out of the wage packet, leaving many women working for little more than a few hundred pounds a month. Running a business from home can provide the ideal solution to all these problems and a large number of networking groups and agencies have developed to support the growing numbers of women entrepreneurs. Athena Network is a typical example www.theathenanetwork.com

Of course starting your own business carries its own risks – four out of five new businesses fail within the first five years of opening. This is why smart investors follow some very simple advice…

1) Take the time to educate yourself first on the advantages and disadvantages of different business models. Employment is not the only area where the 21st century has brought significant changes. Newer business types such as Franchising and, more affordably, Network Marketing, are booming and generally offer higher success rates than traditional businesses. Many well known brands are now supporting this kind of home business, Tiscali (the internet and telephony company ) is one obvious example. www.t-network.co.uk

2) Look for training/information in both the area of business you are considering as well as more general skills such as sales and marketing – it will be time well spent. If you are looking at working with a specific company or brand then choose one which provides you with a comprehensive training package as part of the deal.

3) Keep your expenses as low as possible – your profits are affected as much by what you spend as by what you earn. Two of the biggest advantages of Home Based Businesses are their low overheads and minimal financial commitment but if you require commercial premises for your new business then don’t underestimate the importance of rationalizing your utility spend.  For advice on  how to do this go to www.nspresources.co.uk

4) And finally, if at all possible, don’t put all your eggs in one basket – start your business part time while you are still employed (there are great tax advantages to this by the way) – or look for two complementary business types or product lines.

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