Paths to self-employment are many and varied, so what makes people choose to go down them?
In 2016, the number of self-employed workers in the UK reached an all-time high of 4.8 million – an increase of 45% since the start of the millennium, according to the Office for National Statistics. But while the UK has seen a significant upturn in workers leaving salaried jobs to go it alone, the reasons for doing so are varied.
A study by online accounting experts Intuit QuickBooks of more than 5,000 self-employed workers found that nearly half (45%) said they made the move to self-employment because they believed they could build a business around their skillset.
That rings true for Polly Buckland, who started The Typeface Group, an award-winning digital marketing agency, during maternity leave from her job as lifestyle-marketing manager for BMW.
“I had my ultimate dream job and a fabulous package including a great salary and company car, but I knew I wouldn’t want to continue giving all those hours to the job once I became a mum, and it wasn’t a role that could accommodate flexible working,” she says.
Buckland took advantage of being allowed to work on a self-employed basis (with her employer’s permission) without it affecting her maternity pay and started freelancing, offering local clients marketing support based on her creative skillset and commercial experience.
“It paid off,” she says. “Eight years on I have two children whom I am able to collect from school every day, and I run a business doing what I love, which champions flexible working.”
Other self-starters are driven to start a new business by less inspiring circumstances – 23% of those surveyed by Intuit QuickBooks said losing a job was the impetus for going self-employed. Losing his position as managing director of British Gas was the catalyst for Adrian Harvey to start Elephants Don’t Forget.
“Losing my job was a huge shock which made me rethink everything, because you organise your life around having a certain level of income and then all of sudden it’s gone,” he says.
Friends urged him to tee up another job but, instead, Harvey accepted an interim corporate role. There, he met his co-founder and decided to “carve out a better life” with greater control over his career.
“I was determined not to put myself in a position where it could ever happen again,” he says. “We decided to start a business helping large companies performance manage their people more effectively – many big firms are bad at performance management and view it as something negative when it doesn’t need to be.”
But leaving employment to go it alone isn’t without its challenges. Setting boundaries to stop work from becoming a 24/7 commitment is one of the most significant challenges, according to Intuit QuickBooks, affecting nearly one in four people (23%).
Harvey identifies with this, but says dictating his own schedule makes long hours more palatable. “There’s no two ways about it, I work seven days a week and even on holiday but I’m also available to help my sons with homework and take them to school,” he says. “It’s also work I want to do – it’s meaningful rather than box-ticking. It’s not reading 50 emails you’ve been copied into that you may not even need to see.”
Another challenge for self-employed people is managing their finances, according to Amy Leighton, a theatre education and communications coach. “I love being self-employed because it means I get to do something different every day, but no one prepared me for the minefield of managing my taxes,” she says. “I was always envious of my friends who had employers doing the hard work for them, but apps like QuickBooks Self-Employed are brilliant - they save me time and hassle so I can focus more on the work I enjoy.”
In terms of earnings, the self-employed career path may also be more lucrative. According to Intuit QuickBooks, self-employed workers generate £5,000 a year more than the average UK employee, despite working 10 hours fewer than the average full-time worker per week.
But if your on-staff earnings were significantly higher than the average UK employee, your income might drop when you turn self-employed.
Nonetheless, Harvey says there are other ways to measure success in self-employment. “I’ve spent the last five years earning materially less than I did in my corporate roles and it’s just not that important,” he says.
“The money matters and it’s a reward – but it’s not the driver. Much more important is that I was one of the few dads on the touchline at all of my kids’ rugby games this season – I’d never have managed that in my old job.”
Bad news may seem an unlikely basis for self-employment, but 7% of those surveyed said a health emergency was their starting point for starting a business.
Charlotte Ellis had already started thinking about launching luxury letterbox flower delivery company Vela after leaving her role as marketing director at a London branding agency to freelance, but says her mother’s breast cancer diagnosis spurred her on to start her business.
“I wasn’t getting what I needed out of my job anymore – I felt like the learning curve had slowed and at 30 I wasn’t ready for that to happen,” she says. “My mum lives on her own and was facing really intensive chemotherapy, several operations and radiotherapy, and – having lost my dad when I was younger – I felt quite a big responsibility to support her in any way I could.”
Ellis says starting her own business gave her the geographical flexibility to be there for her mother during her year-long treatment. She says: “I don’t know what I would have done if the diagnosis had come while I was still an employee; it probably would have forced my hand into going self-employed.”
Whatever the impetus, walking away from work to become your own boss may seem risky yet those who do it are typically optimistic – 9 out of 10 of those surveyed (91%) by Intuit QuickBooks felt confident about the future of their self-employment.
For Harvey, the knowledge that no third party can disrupt his life again is invaluable, and being the master of his own destiny is the ultimate perk.
“The idea that you’re irreplaceable as an employee is a myth; you can be fired in an instant and you have zero control over that,” he says. “But start your own business and you’ve got full control. Ultimately, your hands are the ones on the steering wheel.”
Learn more about the benefits of self-employment at QuickBooks Connect, a two-day conference for SMEs and accountants looking to network, collaborate and grow. To register your attendance, and for more information, click here.
