The Leap of Faith - Self Employment
For millions of people across the UK, they took the decision, they took the leap and decided to setup a business on their own.
Hours of deliberation and many sleepless nights. It is not something that is an easy task, as Alan Owen explains.
The year was 1994 and I was employed as a developer for a large IT company, working on a particular contract. The client was leaving the software company and offered me a 1 year contract, if I was to leave and setup my own consultancy business.
The offer was good, but I would be leaving the support network of the company I was working for. I would now have to pay for everything myself. It was a decision that I do not regret, and one which has proved successful, but has cost me many personal relationships.
For anyone who has never setup their own business, it is hard. Starting out on your own is a difficult task. Building a business is difficult, you are the business, and you work 10 times harder when it is your own. Long hours working on all aspects of the business:
Advertising / Promotion
Suits / uniforms
Tools and Equipment
Salaries / Wages
Overnight, you become all of the departments in one. Whilst the rewards can be huge, the effort needed should never be underestimated. You do not know where the next contract is coming from, you have to work, there is no sick pay. Spending time with invoices, bills, contracts, sales, promotion, as well as working on the actual contract is hard.
The use of an Accountant is a must, the tax system is very complicated and in 1995, it was advisory to setup a Limited Company and pay through dividends. I was not a tax dodger or a criminal, it was advised due to the contractual nature of my business. In 2020, these advantages have all but disappeared, the 'loopholes' that many refer to have been closed. VAT, Corporation tax, Dividend tax, National Insurance and PAYE contributions are all paid.
For many the savings are extremely small, compared to the problems, the effort needed and extra hours the owners of small businesses complete that no-one sees, apart from their families.
It is a massive responsibility to take on a business, especially a start up business and I admire everyone who has undertaken the challenge, not all business succeed, but the effort and determination to succeed should be recognised. The new startups have also been ignored, the new businesses who have evidence of their trading.
Yet, the UK government during the time of enforced lock-down, refuses to help these business owners who take dividends and the new start-ups.. The refusal to acknowledge these people whose incomes have been reduced to zero is scandalous. These are hard working people, the majority are not millionaires, they survive year on year, have the same bills as everyone else and continue, rain or shine to get up every day and provide for their families, playing their part as the backbone of the economy.
Running a small business is hard, it brings with it a bag full of issues, mental health issues, worry, anxiety, despair. It can also bring great rewards if the business is successful, but every business owner has had the 'Is it worth it' conversation with themselves. The 'Why do I bother' conversation when times are hard.
I remember travelling to work, feeling so ill, that I was physically sick on the way to a client, but continued to work. This is the reality of owning a small business, no work, no pay.
I am sure any Ltd Company Director who pays themselves with dividends is having those conversations now, you are angry with the Government, but stay strong, stay focused on the future, this pandemic will not last forever, use support groups and Charities for help where you can, every one is in this storm, just not in the same boat.
The UK Government have refused to help the dividend payers so far, claiming fraudulent claims and complicated system changes would hamper any system and that manual intervention would be necessary. Despite many proposals being put forward, the Chancellor of the Exchequer refuses to help them.
Not every Director needs their help, it is the hard working individuals who take enough to live that are being penalised. Everyday, a new scheme is launched, helping different areas of the country, the dividend payers get up every day and check to see if they have been helped. Many are suffering with anxiety and depression, many are considering closing their businesses and not returning, leaving millions of employees without jobs.
For those people who are struggling, get help, get support, take the time to be with the family, most of you work long hours, sacrificing time with loved ones to ensure that the bills are paid. Give them the precious gift of your time.
Use your time efficiently, check your finances and contact your mortgage / rental company and any credit / finance companies and ask for a payment holiday. You founded the business and worked extremely hard to make it a success. You can get through this, use this time to plan, look at all aspects of your business, stay productive and build a plan of action for when the lock-down is eased, because it will be eased and we will return to work. It will be a different environment for the foreseeable future, so adapt as you have done in the past.
If you have a Twitter account, follow @ForgottenLtd - (https://twitter.com/ForgottenLtd), you are not alone, there are hundreds of thousands of like minded people who have been abandoned, join the fight.
If you are having the 'Why do I bother', 'Is it all worth it' conversation with yourself at the moment, if you are not sleeping due to worry and stress, take the time to remember why you took the Leap of Faith in the first place. You were motivated to setup your business, and you can and will get through this. It is an enforced situation that you cannot control, but a situation you can influence. You have already proved yourself a strong person, this pandemic will make you stronger.
Alan Owen is the creator of 'Halt2Proceed'.