Proof: grass IS greener if you work for yourself
Becoming your own boss can be the formula for a happier life... as this expert shows
ANYONE can be an entrepreneur – whether it is setting up a small business or topping up income with part-time endeavours. Although it is not without its tribulations, for many it provides a richer, more rewarding life.
Here, The Mail on Sunday speaks to people who have changed their lives for the better by becoming their own boss – and looks at the crucial ingredients required to help kick-start a new business.
ANTHONY Makin set up a landscaping and gardening business just six months ago. He says swapping the office for the outdoors has made his life richer. By judging health, happiness and income on equal terms, rather than assuming the latter would take care of everything, he has a new perspective on life.
A former export manager for an insulation manufacturer, Anthony says he had always believed that the harder he worked the more rewards he would get. But the company he toiled for axed his job position. He was offered a different, lesser role, which he refused in favour of redundancy in February this year.
‘I worked extremely hard,’ says Anthony, 49, who lives in Honley, West Yorkshire, with wife, Louise, 47. ‘I was away on business a lot of the time which, together with stress, explains why I had a heart attack in 2013.
‘We were on holiday in the Lake District in March. As I sat eating a crumpet, looking at the stunning views, I decided to do what I wanted, not what a company asked me to do – and go it alone.’
Anthony has long loved gardening and after the couple returned from their trip away they worked long into the night to set up his new business – Butterfield’s Garden Maintenance Services. Helped by Louise, who is also self-employed as a marketing and communications expert, he ordered business cards, joined an online community events group to spread the word about the new business and later walked the streets of their town, posting flyers through letterboxes.
‘From that very first walk, I’ve picked up business,’ says Anthony. ‘I’ve lost two stone in weight as a result of my healthier work lifestyle. I come home from work tired – but not stressed or jetlagged.’
Anthony and Louise have paid off their mortgage, so they have only to worry about bringing in an income to pay bills and to put money towards retirement savings. Louise pays into a pension while Anthony wants to put all his effort into his business before resuming pension contributions, which he acknowledges is important.
Essentially, he has found the recipe for a richer, happier life – something recently investigated by scientists. Dr David Lewis, psychologist and chairman of market research company Mindlab, was tasked with finding the formula for ‘true richness’ by marketing gurus at cheese brand Anchor Cheddar. He used quadratic mathematical modelling, which is the use of an equation to tell us something practical about life.
Two thousand people were quizzed about their jobs and income, as well as their attitudes to topics such as success, money and leisure time.
Their answers helped form the equation which Dr Lewis, pictured above, says tells us ‘what combination of attitudes towards life is found in the happiest people’.
The equation takes into account people’s attitude towards various issues such as planning (P), confrontation (C), perfection (K), money (M), family (F), leisure time (L) and materialism (Z).
Results showed that fishermen, foresters, people aged over 65 and individuals earning annual incomes between £20,000 and £35,000 are happiest. By comparison, bankers and people earning between £150,000 and £200,000 score poorly on a ‘happiness scale of richness and fulfilment’.
Speaking about Anthony’s change in employment, income and pace of life, Dr Lewis says: ‘This is a typical case of taking stock of one’s life and making sweeping changes for the better.
‘Anthony and Louise have swapped financial riches for a simpler and happier lifestyle. They are able to enjoy their jobs, which no longer take over their lives and spend quality time together.’
Despite new-found freedom and happiness, Anthony and others like him have to learn tough lessons about being a new small business owner – but there is help available for anyone who wants to be an entrepreneur.
MAKING THE BUSINESS OFFICIAL
THE first step to launching a business is to choose a legal structure – sole trader, limited company or a partnership. Sole traders are responsible for their business, work for themselves, complete self-assessment tax returns and pay tax and national insurance.
The process is more complicated for limited companies where corporation tax is payable, and finances must be kept separate from those of the business owner. Other types of structure include business partnerships, limited partnerships and limited liability partnerships. Sole traders must register for self-assessment with HM Revenue & Customs. Limited company directors must also inform the taxman and register with Companies House.
HELP WITH TAX
NATIONAL insurance, Value Added Tax and corporation tax may be owed, depending on your
business size and type. Those earning more than £82,000 in taxable income must register for VAT, charge customers the right amount and then pay any owed to HM Revenue & Customs.
You do not have to be a tax specialist, you just have to keep track of all incomings and outgoings. Find-anadviser websites unbiased and VouchedFor can ease the search for a qualified accountant, who will be ready to help with the finer details of book-keeping. Personal recommendations can also prove productive.
Help is also available for people on lower incomes who need assistance with their taxes from TaxAid and the Low Incomes Tax Reform Group, which have guides to help self-employed workers.
MARKETING ON A BUDGET
SPREADING the word online is the easy and cheap way to market your business. Having a website, Twitter feed and Facebook profile makes it easy for potential customers to find you and gives your business a reassuringly legitimate feel.
For cost-effective website design, consider businesses such as Wix, GoDaddy and Vistaprint. The latter can also print business cards, starting at around £10 for 100.
MANAGING FINANCES
SOLE traders can use their own bank accounts for cash flow, but businesses with a bigger set-up will need a small-business bank account. Both Yorkshire Bank and Clydesdale Bank offer 25 months of free banking for start-up businesses. Royal Bank of Scotland offers free business banking for 24 months, along with a £500 free overdraft.
For a cash injection into the enterprise, consider the Governmentfunded scheme Start Up Loans. It offers an unsecured loan for up to five years, mentoring, advice and special offers for business services, such as a web-hosting package, business mobiles and payroll software. To find out about the scheme, visit startuploans.co.uk.
Crowdfunding websites can also be a source of much-needed investment from members of the public who are chasing rewards or better rates of return on their cash savings. Consider FundingTree, Seedrs and Crowdfunder.
SAVING FOR RETIREMENT
BY LAW small-business owners are obliged to automatically enrol any employee aged between 22 and State pension age who is earning more than £10,000 into a qualifying pension scheme.
They must also make contributions of 1 per cent of an employee’s salary, rising to 3 per cent by 2018.
Deadlines for complying with auto-enrolment depend on the size of the company’s workforce, but for smaller operations with fewer than 30 employees the latest date is April 2017.
Providers such as Nest – set up by the Government – and NOW:Pensions can take care of these pension requirements on a company’s behalf.
A pension is vital for many sole traders – especially given that there is no longer an employer managing and topping one up in the background.
Insurers such as Aviva and Standard Life offer personal pensions, or you can choose a stakeholder pension, which has minimum standards set by the Government.
Insurers also offer these and monthly payments can be as low as £20. Contribution ‘holidays’ are allowed if income is tight for a period.
A self-invested personal pension (Sipp) gives an individual greater control and more flexibility over saving for retirement. Check out brokers such as Hargreaves Lansdown and Fidelity, which both sell Sipps.
ALTERNATIVE WAYS TO TOP UP INCOME
EARNING a bit of extra money with ‘enterprise on the side’ can be lowkey – anything from letting a driveway with unused parking spaces to letting your car to fellow motorists at times that suit you.
It is often the case that those who are bringing home more money do so because they have used entrepreneurial spirit to encourage repeat custom. For example, some homeowners who let their driveways via websites such as JustPark and Park On My Drive also drop off or collect customers at their ultimate destination as part of the deal – at a nearby airport or concert venue, for instance.
Car owners letting their vehicle to fellow motorists via the easyCar Club have the option to deliver their set of wheels to the doorstep of the paying customer, for an additional fee.
Householders happy to welcome another person to live in their home can earn up to £4,250 a year tax-free. From April 6 next year this tax-free allowance rises to £7,500 a year.
You can also try selling your skills online through websites such as PeoplePerHour. Post any job you can do on the website, or search through tasks other people have posted to see if any requests match your abilities.