Picture the scene. It’s a cold, gray, office morning and the same old people are bickering about the same old things. You’d get involved if you thought it was worth the effort, but instead you’re asking yourself that recurring question: wouldn’t I be better off on my own?
For many people, especially those with an entrepreneurial or creative bent, the temptation to go it alone has never been stronger. According to UKCES (the UK Commission for Employment and Skills), the rate of self-employment in the UK – currently 15% of the workforce – is at a 40-year high. The proportion of self-employed women is up, and the number of over-65s who have chosen to take the plunge has doubled over the last five years.
Here at My Accountant Friend, we spend most of our time working with freelancers and independent contractors, so we thought it’d be an interesting exercise to put together a survey looking at why people choose to become self-employed. We spoke with our own clients as well as people that we know who have taken the self-employment route across the creative sectors, the independent business sectors, project management, startups and more. Scroll down for the results.
Our respondents
Of the people we spoke to, 62% were male and 28% female. To the question, “how long did you work at your previous job before becoming self-employed”, we got the following answers:
- 1-2 years (32%)
- 2-5 years (27%)
- 5-10 years (16%)
- Less than a year (13%)
- 10+ years (12%)
What made you leave your previous job and choose self-employment?
In our experience, it’s not a single factor that makes people turn to self-employment, and neither is it necessarily a negative experience, so we offered our respondents the option of choosing several answers.
Somewhat unsurprisingly, 40% told us that they left because they didn’t like the office politics. 38% simply needed a change, while 36% felt they could do things better on their own. 32% said that they felt it might solve the work/life balance issues they’d been having, while 19% suggested it was a money thing – that they could earn more if they went freelance.
Interestingly, only 13% said that their hands were forced by redundancy, while nobody admitted to having been sacked. (Nobody!? C’mon, guys…)
Other interesting answers that came out, although not in sufficient number to rank as a trend, included, “my boss was incompetent” and “my skills weren’t fully appreciated”, suggesting that there may be a wealth of talented people at companies across the country, many missing a potentially more rewarding set of circumstances due to unfortunate managerial skills or fear of the unknown.
What was the biggest challenge you faced in becoming self-employed?
Again, our respondents were offered the chance to choose a variety of answers, but we weren’t surprised by the results. After all, we’re an online accountant service, and we tend to attract people in the early stages of self-employment who need help and simplicity in setting up their new business and working out their tax situation.
Nonetheless, 45% told us that they had been most concerned about running their own accountancy, while a further 14% said they had had trouble working out whether to be a sole trader or become a ltd company – something we are help with as part of our service, and are therefore very used to.
27% explained that they had worried about finding contacts, while 25% had been concerned about their ability to time-manage themselves (not to worry! We’ve written this article on freelance time management.) 24% said they hadn’t known which steps to take first, and 18% had concerns about how to advertise their services.
Naturally, we asked people to name any other reasons, and we were told that major self-employment challenges included, “a lack of workplace benefits”, “no confidence in approaching new clients”, “getting used to unpaid holidays!” and “knowing when and how to switch off” – all of which we think are valuable things to consider when you’re pondering your options.
What was most appealing about self-employment?
If you think it’s all about self-empowerment… well, you’re right. 69% of our respondents said they were attracted by being in control of their own destiny, while 52% said they were keen on being their own boss.
Meanwhile, 58% said that working to their own schedule (avoiding the humdrum 9 to 5) was particularly appealing, and 48% were eager to explore their higher earning potential. Although 48% demonstrated their social side, saying they felt self-employment would allow them to work with a broader range of people, 46% said they were simply looking forward to working from home.
A number of people cited that work/life balance situation again, saying that self-employment allowed them to avoid “expensive childcare”, while others relished their newfound autonomy. “I’m looked forward to building my experience,” said one person, “rather than being limited by what my employer wanted me to do.”
Elsewhere, another explained that self-employment meant “being passionate and taking ownership”, something she hadn’t felt at her previous company.
What do you know about self-employment that you wish you had known when you began?
This was an open question, so the answers were many and varied. However, many followed similar themes. Here are a handful of our favourites.
- “I wish I had known how fun it is!”
- “Relationships matter. Selling yourself matters.”
- “You don’t have to say yes to every bit of work that comes your way!”
- “It will take time to build a steady (and good) income. Be patient – it will happen.”
- “It’s OK to take holidays!”
- “Get a decent accountant onboard, rather than trying to do it all myself.”
- “That you and your business are a work in progress, not an overnight success. Praise the exceptions who happen to be an overnight success, but don’t measure yourself by their standards, otherwise you’ll feel like a failure.”
- “Don’t panic if the work doesn’t come. Keep calm and enjoy being in charge of your own destiny.”
- “That when you’re setting tax payments aside, you need to take into account National Insurance contributions!”
- “I should’ve gone freelance sooner!”
The right decision?
With hindsight, few people can ever say they did things perfectly. However, our 44% of our respondents said they were happy with their decision to become self-employed, and 34% said they’d “never made a better decision in their lives”. 18% said they have good days and bad days, while only 4% appeared to have any real regrets.
Overall, the decision seemed to have been a good one, with 80% saying that they recommend the self-employed life to other people – many of them on a daily basis!
Is a life of self-employment the right choice for you? Feel free to get in touch with us at My Accountant Friend to talk it over. Whether you’re worried about being a sole trader or a ltd company, how much salary to pay yourself, how much you can take as dividends, we’re here to help. Your life is your business, your accounts are ours.
