Posted on: 20 June 2018
The demand for flexibility in employment is at its highest ever. The growth of the gig economy, the upsurge of co working spaces and the number of people working from home has risen significantly. Online retailers and mobile beauticians are some of the most popular self-employment options while others are turning their spare rooms into offices for their home business.
Self-employment hit an all-time high in 2017 with 4.8million people opting to be their own boss. So is now the time to embrace your dream and put that talent or hobby to good use? With so many people adopting their hobbies to boost their earnings, the answer to this question seems obvious – why not?
The beauty of self-employment that attracts so many is that it can often fit around family, school runs or any other commitments you might have. Being self-employed doesn’t have to be a full time occupation either; the amount you work is entirely up to you meaning you can decide the days and hours that suit you. Best of all, when your work involves something you love doing; it doesn’t really feel like work!
Some of the most popular working from home ideas include:
- Accountancy and bookkeeping
- Catering or cake making
- Hair and beauty
If you’re not quite ready to take the plunge entirely, leave your job and start flying solo, then why not dip your toe in the water and use some of your spare time exploring your options as an entrepreneur? By using your spare time at weekends or in the evenings you could get a feel for the demand for your idea or skill and whether or not it presents a feasible business opportunity.
In April 2017, the government introduced an allowance for property or trading income of up to £1000. This means if you’re earning less than £1000 gross profit a year from your hobby, you don’t necessarily have to tell HMRC. While it’s always best to check whether these earnings need to be declared, this flexibility allows you to explore some entrepreneurial initiatives without necessarily committing to a full business start-up.
The fundamentals of turning your concept into cash:
- Do you have an idea that people will pay money for?
- Is your home a suitable environment to start your business?
- How much time can you dedicate to your idea?
- What additional resources will you need to get started and how can you fund these?
Asking yourself these questions can help you establish whether or not you have a viable plan. Delving further into these questions can help you determine the finer details such as whether or not you need to make any tax declarations.
Do you have an idea or passion that people will pay money for?
Have you ever thought ‘why doesn’t that exist?’ or ‘why isn’t someone offering this service’ or even ‘this product would be so much better if…’? You could be onto something.
What are the advantages and disadvantages of working from home?
The concept of IMOFF is an easy acronym to remember when starting a basic business plan:
- Idea – is your idea a potential money maker?
- Market – who are your potential clients and what does the competition look like?
- Operations – consider taking your product or skill from planning to production
- Financials - what funding do you need to set up your business and where can you get this from?
- Friends – what connections do you have already to help make this idea a success? Are there any possibilities for business partnerships?
Creating your work space in your home environment
If your business is starting off as an advanced hobby, your home working environment may well be the kitchen table, or another area of your house that’s easy to work from. As you grow, you will want to distinguish your work and home environment from each other so it’s recommended that you define a space that you’re comfortable working in. This could be a spare room, a shed or even a loft conversion; whatever suits your business set up.
Consider your clients, and your neighbours
Does your business model mean that potential clients will be visiting your home? Could you be taking regular deliveries that could clog up the street in which you live? One essential element of working from home is not to annoy your neighbours. Let them know that you plan to start a business from home, and keep them informed along your journey. You could even hold a party to celebrate your first year or milestone achievement and invite them along. This way, any issues they may have can be discussed and addressed in an open and friendly way.
So if you’re expecting regular client visits or deliveries at an unsociable hour make sure your neighbours are aware and do what you can to minimise disruption in your neighbourhood.
Promoting your business through social media
Social media platforms are a fantastic place to promote your business in a cost effective way. Facebook, Twitter and Instagram can help you reach out to your friends and people in your local area and advertise your skills and services by demonstrating the work that you do and collecting reviews from customers.
Setting up the right company type
If your new venture takes off you could find that you’re running a full blown business before you know it. If your gross profit exceeds £1,000 per year then you will need to declare this to HMRC and think about your company status.
There is a lot of useful information available on the Central Government website that can help you decide which of the following business types is right for you:
- Sole trader
- Limited company
This information can help you decide the right structure for your business and also provides some useful information around employment, licences, business rates, tax, national insurance and much more.
Getting the right insurance
Whatever kind of business you’re running or hobby you’re developing, you should consider taking out insurance to protect you financially in case something goes wrong. The nature of your business will determine the covers you need most.
To help you understand the covers available, we’ve included a brief summary of some of the most relevant types of insurance for home businesses:
- Public liability insurance can protect you against claims from third parties if they are injured at your premises.
- Product liability insurance can offer financial protection against claims for defective or damaged products made, sold or supplied by you that cause injury to third parties.
- Employers’ liability insurance is required by law if you employ anyone in case they injure themselves during the course of their employment.
- Professional indemnity insurance is designed to protect you against claims made for wrongful advice that causes a client financial loss.
- Contents insurance can protect your stock and business contents against a number of risks from fire to theft and much more.
- Commercial buildings insurance might be needed if you are using a dedicated building for commercial use.
- Business interruption insurance can protect loss of income incurred following damage to property at your business premises.
Premierline help many business start-ups arrange working from home insurance whether you’re setting up an e-commerce retail business, doing accountancy, consultancy, starting a catering business or beauty business from home. Our insurance experts can help you find the right cover at the right price to protect you and your business against the unexpected.
If you’re looking to get quotes for your home business insurance, click here or call one of our expert advisors for professional recommendations tailored to you.
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