Making your own schedule. Being your own boss. Keeping all the profits. Working on projects you enjoy. Selling products, you like. Does all that sound good? Well, these are the special perks of being a sole trader. In the digital age, it’s become more and more common for people to venture on their own and become self-employed.
Of course, being a freelancer or sole trader doesn’t mean there won’t be challenges. For instance, making your own decisions is great but working extra hard, staying completely focused, solving every problem without any guarantee of benefits, success, or pay can be a lot to handle.
Opportunities for sole traders to expand their careers can vary greatly depending on the type of work they perform. For examples, self-employed farmers growing their own vegetables may experience up to a 3% decline over the next decade. On the other hand, for self-employed workers in the fields of real estate, media, and childcare are anticipated to experience a rise in job openings over the next ten years.
Getting Started: Public Liability Insurance
One thing is for sure: when you become a sole trader, you’re going to need public liability insurance ASAP. Public liability insurance will protect you and your business should an unhappy customer decide to file a liability claim. Public liability coverage will pay for your legal representation and take care of any money awarded to the displeased client.
Getting a public liability plan is easy when you check out Public Liability Australia
’s website. Take a few minutes to get a public liability insurance quote and coverage details sent right to your inbox. Or call a Public Liability Australia
agent today to get your new public liability policy set up.
Wait a Minute! Are You Ready to Be Self-Employed?
Now that you know how to safeguard yourself and your business, are you ready to be a sole trader? Have you thought a lot about what that even means?
Let’s explore the pros and cons of being a sole trader.
The Pros of Being Self-Employed
For most self-employed workers, the feeling of autonomy and independence over how and when they work is one of the most significant benefits. Depending on the nature of your work, sole traders often determine their own hours, office location, and work processes. Basically, there’s no one to tell a sole trader what they need to do and how to do it!
Being self-employed means, you’ll also wear many hats...all at once. You’re responsible for the services and products that you’re offering. You’re also handling administrative tasks, marketing, sales, and all other operational tasks. In other words if you’re a sole trader there’s not much time to be bored.
In addition, since you’re not working for set wages and benefits that were promised by a large employer, then you don’t always know how much income you’ll earn. You could make a substantial amount of money (more than you could ever earn from a traditional employer). That’s because there are no limits to how much money you could make. However, being self-employed also means you could lose money for various reasons and not be able to pay yourself a living salary.
The Cons of Being Self-Employed
Even though income for sole traders can be a major “pro” considering there’s no cap on what they can make. There’s still a downside to it as well. You see, self-employed people also run the risk of not having a consistent income, especially when they first begin their freelance gig. Plus, earnings can fluctuate quite a lot when sales are slow or the “off season” hits.
In addition, sole traders are usually responsible for getting their own benefits including retirement savings, healthcare, and paid time off. This can get complicated for sole traders that decide to expand and hire employees for which they’ll need to get benefits.
Besides an inconsistent salary and a lack of guaranteed benefits, the demands of managing multiple areas of your business can feel like a lot of pressure.
2 Work Hacks of Successful Sole Traders
There are ways successful sole traders manage the heavy workloads and big challenges being a business owner can bring. Below are two hacks that successful self-employed business owners find to be particularly useful.
#1 - Create a work schedule
Plenty of self-employed people seek out that type of work because of the flexibility. Who wouldn’t enjoy working where you want, when you want, and how you want?
The trap sole traders tend to fall into is not creating a consistent schedule which eventually leads to burnout and a lack of work/life balance.
It’s also important to have set work hours because your clients will know when to get a hold of you.
Establishing a schedule makes sole traders appear more professional and provides a sense of routine.
#2 - Set up standard processes
Developing standard procedures can really help you work quicker, smarter, and better. To get started, make a list of regular tasks you perform and then decide which of those could be simplified or automated.
Financials: For instance, you might want to find a more efficient way to record financials (incoming and outgoing) like using accounting software (e.g. QuickBooks) that allows you to take a picture of your receipts and upload the image. No more time wasted typing in dollars and cents in a big, complicated spreadsheet.
Client Relationships: Another example, implementing a customer relationship management platform (CRM). This is a valuable tool for tracking client information and activity. Sole traders, like yourself, can use the CRM to oversee all customer communication automatically without needing to track correspondence in a spreadsheet or through email.
Customer Inquiries: If a potential customer takes notice of your work and wants to hire you, how will they contact you? How do you handle lead follow up? It’s a good idea to get a process that will make communicating with new customers smooth. You wouldn’t want to miss out on any opportunities.
Maybe you could set up a dedicated email inbox and a schedule for checking messages.
Or you could set up a batch response to inquiries. Or you could establish a “work with me” page on your business website. Normally self-employed business owners include a web form that clients can fill out to start talking with you about a job.
Getting all this set up now will make sure you are prepared, and no leads get overlooked.
Project Management: How do you track projects? How do you keep track of multiple jobs for various clients? Using a project management system will make being a sole trader so much easier. It will most likely improve each customer’s experience too since you can be a lot more proactive when you can easily assess project status. Tools like Asana are helpful for project management and can be integrated with your CRM tool.
Obviously, you already know all the positive aspects of being a sole trader. It’s also necessary to understand all of the negative aspects and get ahead of those matters. You wouldn’t want to have a few pesky matters derailing your amazing career as a self-employed business owner. Understanding how best to manage your processes and schedules will get you off to a great start!