When you first go self-employed, it’s an incredible feeling. Scary – but exciting. Making that leap from employed to self-employed is a big step. But when you manage to handle things well, you’re always glad that you did it. Whether you’re someone that has been freelancing or working for themselves for years, or you’re still a newbie, you may find that you’re thinking of taking another big leap.
When you’re running your own business, you may feel as if you’re ready to go from being a self-employed solopreneur to a more formal business. And just like that leap you took before, this one can feel equally as scary. While your everyday work may not change, your setup does. And you have to be ready for it. But when it comes to growing your business, you will need to do it at some point or another.
But what does the move involve? And how do you know that you’re ready for it? Do you even need to make the move? Right now, there could be quite a few questions going round and round in your mind. And that’s okay. But you don’t have to worry so much about them, instead, you just need to work out what the process involves and pick up some tips to help in the process!
1. Know You’re Ready For It
So first of all, you’re going to want to make sure that you’re absolutely ready to do it. If you’re making under the higher income tax threshold and you’re happy operating on a self-employed basis, then you may be okay as you are right now. But, if things are rapidly starting to grow, and you notice that you’re earning more and more, it may be more efficient for you to make the leap sooner rather than later. The second point can help you to clear this up a little more.
2. Speak To Your Accountant
Other than wanting to look more professional and have a registered business name, one of the reasons that people go from a self-employed sole trader status to a company, is because it’s more tax efficient. As a sole trader earning a high income, you may be paying a significant amount of tax. You accountant can advise you on whether this is the right move for you just yet.
3. Register The Company
If you do decide that you’re ready, or when you do, the next step is to actually register the company. For this, you have a range of options. You could use a limited company formation agent, set it up yourself, or even work with your accountant. But, if you’re not sure that you know what you’re doing, working with a professional may be the safest option.
4. Stay Organized
Another thing to make a note of, is that you’re going to want to make sure that you’re being organized. Being set up as a company, rather than a sole-trader, has a few more limitations. You have to be very stringent on what you’re recording, how you’re taking money out, and how you operate. So for that to be easier, you need to be very organized with your paperwork and finances.
5. Make A Plan
From here, you may also decide that you want to make a plan for your business. Because if you’re already growing, or you have a rough idea of how you want to grow (and where you want to be), it can help to sit down and give it some serious thought. Make sure that you’re thinking about all areas of the business and creating a business plan that gives you actionable points to work on.
6. Keep Moving
Next, you’re then going to want to make sure that you’re executing on that plan. When you want to be a big business, or at least be bigger than you were as a sole trader, you have to keep moving. So this means that you’ll want to start hiring people, investing more money into your marketing, and generally looking to push your growth to get results.
7. Stay True To Yourself
And finally, just make sure that you’re still running things as you always have. Yes, you have to be more organized now. Yes, there are more restrictions financially. But everything else should essentially be the same. You don’t have to act more formal or change things, just because you’re a company now. As long as you’re still running things, growing, and enjoying the journey – the solopreneur in your can still stay strong!