5 essential questions to ask yourself before going self-employed

More people over 50 are becoming self-employed than ever before, according to figures from the Association of Independent Professionals (IPSE), with over a million now working for themselves. 

“People in their 50s and 60s often have a clear idea of what they want their career to give them,” explains career coach and consultant, Hannah Salton.  

“If, for whatever reason, this can't be found in traditional employment, they see freelancing or setting up their own business as a good option.” 

There are lots of benefits to self-employment, especially in later years and, as Salton says, skills learned over the years can be a real benefit in a congested marketplace.   

"Freelancing can provide flexibility, autonomy and the chance to work on something you’re passionate about. And over-50s have a wealth of life and work experience, which can provide a great foundation of transferable skills to set up on their own,” she adds. 

This might all sound great from the outside, but the realities of going self-employed can be hard, especially if you’ve not prepared for your new role.  

Spending some time considering what it takes to start up on your own can make a real difference and set you up with a far greater chance of success. 

1. Is self-employment right for me? 

The idea of being your own boss and setting your agenda might be appealing, but it’s important to understand the drawbacks a more flexible working life can bring before deciding whether to make the jump. 

Ali Marsh, 57 from Oxfordshire, was a specialist in dementia care before she set up Miss A.M. Investigations and is finding the new challenge satisfying. “I studied while I was working, and I love my job as a private investigator because it helps people with their problems.” 

But, as Ali has found, sacrificing a steady job for self-employment means accepting a different kind of pressure.  

“Having no holiday pay is one of the downsides, but I get the freedom to choose when I work and who I want to work with. So, I can work at 5am or 11pm, depending on what I want to fit around the day.” 

Body language expert Carole Railton, who’s in her 70s and lives in London, often works as a guest speaker and finds that flexible freelance life, rather than retirement, suits her.  

“Be realistic: you might not walk into a freelance career and get work straightaway. I like to be challenged and I’m quite pragmatic, so I know I need to network, and I’ve had to be fearless to build up work," she says. 

2. What’s my niche? 

Many people starting their own business will carry on doing what they used to, just on a freelance basis, to keep the benefit of their years of experience but working on a more flexible schedule.  

However, it’s still possible to have a complete change of career – it’s all about finding your passion. Running your own business can be all consuming and having an inner desire to succeed will be critical to motivation.  

After a career in the civil service, Sonal Dave, 56, from Harrow, took the leap and now works as a self-employed celebrant and toastmaster.  

“I was starting to realise something was missing and was asking myself: ‘Is this the right job?’,” she says. 

“So, I woke up one day, got a blank sheet of paper and put myself in the middle. I drew a spider diagram asking: ‘What are my strengths?’ and ‘What do I not want to do?’ 

“I think sometimes you get so bogged down in your reality you forget to look outside the box. When you were young, what made you smile?” 

3. How comfortable am I with marketing and multi-tasking? 

A big part of being self-employed or going freelance is promoting and selling your services. Marketing, social media and networking are all critical to your success: before you start your business, think about how you’d approach these challenges. 

Colour analyst Sandy Lancaster, 55, launched her own business House Of Colour, after retiring from corporate life at 52. “I knew that social media and promoting myself was going to be the part I liked the least,” she says.  

“It’s taken a while, but I’ve got over my initial reluctance and now I see [photo-sharing app] Instagram as a free shop window.  

“On a Sunday, I create seven pieces of content based on photos I’ve taken the previous week, or events I’ve got coming up, and I post one a day so I’m consistently showing up.” 

Body language expert Carole Railton doesn’t have a website but finds the social networking site for professionals, LinkedIn, is essential for her business as a way to connect with new people and broadcast her skills and services.  

“Create a profile and keep it up to date. If you’re starting out in a new area, don’t be afraid to ask people you’ve worked with over the years for recommendations - and I wouldn’t be afraid to connect with or contact people on LinkedIn,” she says. 

Then comes the multi-tasking. When you set up on your own, you decide on your job description, so you can play to your strengths and outsource the parts of your business you feel you don’t have the skills for. 

You could employ a virtual assistant, a contractor who helps you with scheduling, planning and other administrative tasks.  

“I have absolutely no clue when it comes to technology,” says Ali. “So, I have a fabulous VA (virtual assistant) who deals with that. You don’t need to employ one full-time, you can choose however long you need them for so it’s flexible on both sides.” 

Susan Bonnar, 56, from Lee-on-the- Solent, runs The British Craft House, an online platform that lets artisans from across the UK sell their handmade goods. 

She made the big switch from working as an air traffic controller in the Navy, but she’s fully embraced all aspects of the business and is currently studying for an MA in digital marketing too.  

“I do absolutely everything and my dream is to not take my laptop on holiday,” she admits. “Today I’ve written a press release, I’ve emailed customers and I’ve sorted out a payment problem someone was having. But I love it, this business is my baby.” 

4. What will I need for tax and accounts? 

If you’ve always been in a PAYE job, now’s the time to think about how you’ll handle your finances, which includes everything from budgeting to tax.  

HMRC has a calculator to help you work out how much to put aside for tax and National Insurance (NI), although most people stop paying Class 4 NI in the following April after reaching State Pension age. 

However, this calculator will only be useful once you’ve been self-employed for a few months (or years) and have a decent handle on how much profit you’re making per month on average – until then, you’ll need to be methodical and make sure you’re putting money aside. 

Whichever method you use to calculate the tax owed, there’ll almost certainly be something to pay. 

Employment status and tax expert, Rebecca Seeley Harris, says: “I learned this the hard way when I had to start doing a tax return for my Dad under his Lasting Power of Attorney. This can [easily] catch you out...so make sure you have it in hand. 

 “If you only have a small turnover, you don’t need an accountant, but you may want to use a bookkeeper. Otherwise, you’ll need to have a system to show your income and expenses. You could use an Excel spreadsheet to do this or old-fashioned pen and paper.” 

Budgeting is paramount, particularly if you’re launching a business with overheads. Amber Harrison, 55, from Dorset, opened Folde, a bookshop inspired by nature, with a friend and learned a lot in her first year.  

“I think if you’re starting a business, it’s vital to think about every single cost. Include things like building a website, email hosting, business insurance and software,” she says. 

“Another consideration is the impact of tax, such as self-assessment and getting payroll right if you’re paying staff. Always keep VAT in the back of your mind. You might not reach the threshold (currently a turnover of £90,000 a year) immediately, but it can be a real adjustment when you do.” 

5. Am I ready to work for myself? 

Self-employment offers freedom over how much you work (and earn), and you might find that going all out into a role you’ve created might be too much to handle initially. 

If that’s the case, it might be that a part-time side hustle feels better for you.  

Think about the timing: if you have a big event such as the birth of a grandchild or have caring responsibilities, it’s important to be realistic about how much time you can give to your new venture. 

“Quite a lot of the sellers on my platform are in that time of life where they have kids at university and parents who need their support and they’ll say things like: ‘Can you just pause my shop for a couple of months so I can help my in-laws move house?’ and being freelance gives you the flexibility to do that,” says Susan. 

When you don’t have the luxury of holiday pay, it can also be tempting to never take a break, but it’s important to carve out time for yourself.  

Sonal blocks out a regular week off in May and Susan puts a coffee with friends and her regular runs in her diary. 

Don’t underestimate how much you might miss being part of a team either, not just for moral support but for practical reasons too. As Sonal says, she had to pick up new skills quickly without other people around to rely on. 

“You need to learn the business basics such as spreadsheets, technology or creating images on Canva [a graphic design tool], which can be difficult if they’re not things you’ve used previously,” she says.  

“It’s a hard mountain to climb but remember you can outsource it. I had no clue where to start doing my website and I wasn’t so comfortable with accounts. One of the things I learned quickly is to focus on what I’m good at and outsource the rest.”