99.9 percent of all businesses in the United States are small businesses, with three‐fourths representing the self‐employed. (nase.org)
Recent figures have shown that the amount of those choosing to enter into self-employment has risen dramatically since the recession started, with 367,000 more people self-employed in 2012 than there was in 2008.
As 60% of this figure began working for themselves between 2011 and 2012, it would perhaps suggest that people had tried and failed to find work at the beginning of the economic downturn, or were considering what their next career move would be before turning to self-employment.
“More than in one in three new jobs created since 2010 have been self-employed roles. It would be naïve to think that these are all budding entrepreneurs.
TUC general secretary Frances O’Grady continued: “Worryingly, the figures suggest that many of those who have lost their jobs over the last few years are not simply choosing to go freelance, but are being forced into false self-employment, which is often insecure and poorly paid.” (Source: hrmagazine.co.uk)
Ian Tonkinson lost his job as a property manager with Foxtons estate agents in 2007. He was awarded a redundancy pay-out, which allowed him a grace period to consider what his options were. Ian chose to use his redundancy pay to set himself up in business, and has been able to provide jobs for half a dozen other people who now work for him.
According to the Office for National Statistics, some of the most popular occupations adopted in self-employment are within the construction trade such as carpenters, electricians and plumbers. This is echoed in Ian Tonkinson’s situation as he started up a building company and has enjoyed relative success.
If you want to follow in Ian’s footsteps and start your own business, you should seek advice from a professional body who will guide you through the necessary steps. The government run a website completely dedicated to starting up in business that provides advice on a large range of topics varying from developing a business plan to managing your cash flow.
What are the benefits of becoming self-employed?
When you choose to work for yourself, it means that you will be able to choose your occupation and be your own boss. It is also a viable option to beat the unemployment crisis brought on by the recession; as the number of recorded employees shrunk by 2%, so starting your own business is a way to create a job for yourself if you can’t find one elsewhere.
Being self-employed can also open up a wider range of new career opportunities at a later age, demonstrated by the figures that show that the average age for a self-employed worker is 47, and 20% of all workers aged 50-64 are working for themselves. Training for a new trade is also becoming easier, with apprenticeships now open to people of all ages and a huge choice of courses available ranging from electrician training to flower arranging.
What are the drawbacks of becoming self-employed?
Of course, running your own business is not easy. Whilst Ian Tonkinson is in demand, he still takes home only £26,000 per year after taxes and other deductions, which is much less than they pay their employees. However Ian has said that this is balanced by the enjoyment he has from working for himself, and the satisfaction he gets from making employment opportunities for others within his business.
A recent report published by the Centre for Economics and Business Research also found that those working for themselves are burdened with debt worth four times greater than those in full or part time employment.
Therefore when planning to start your own business and work for yourself, finances must be carefully considered as whilst the job may be fulfilling, the pay might not be.
Infographic showing the characteristics of self-employed workers in the UK for April to June 2012.
Infographic via Visual.ly:
About the guest post author:
Rosie Percy writes for a large range of topics and industries including business, education and finance. Rosie has previously written for the Guardian and lifestyle blogs, and now lives and works in Brighton.