Making sure you’re properly protected as a sole trader is key for your professional and personal wellbeing. Most people believe that the self employed are super lucky: no boss, the ability to say no to work you don’t want to do, and the ability to control your income. However, the freedom that comes with sole trading can come at a price. It’s all down to you to protect yourself, and making an error here could mean disaster. You have to be willing to put in the work and investment to protect yourself, because nobody is going to do it for you. Here’s how to get started:
Get An Accountant
When you work for another company, they take care of your payments and taxes. When you work for yourself, it’s up to you. Paying an accountant might seem like an unnecessary expense when you can do it yourself, but you’ll save yourself so much stress and confusion. An accountant will help you to keep everything in order and ensure you’re protected financially.
Take Out The Correct Insurance
Insurance is so important when you need to protect yourself. Income protection and business insurance are key for your peace of mind and safeguarding your future. Business insurance will cover your work, anything that you might be liable for, and even your equipment. If you get too sick to work, income protection can cover you for that. You might hope it never happens, but it can. Make sure you find out more so you are confident you have the right type of insurance for the work you do.
If you are a self-employed person then there may be specific insurance for your trade. Be aware that if you take out generic insurance it may not cover you or anyone who is injured through your work. Take for example if you are a welder, you will need to search for the best welding insurance so you know you are covered. Make sure you shop around a few different companies to find the best deal and cover for you.
Save For An Emergency
Money is way more of an issue when you’re self employed. Having a financial safety net is one of the most important things you can do. You can keep yourself stable this way if you earn less for a while – especially helpful if you deal with late payments like most sole traders.
Know What Your Rights Are
Knowing your rights as a worker is important if you take on work for other companies. You may get injured on a job, or if you do work for a specific company for X amount of time, you may be entitled to certain benefits. Make sure you read up on this.
Start A Pension
Starting a pension fund should be something of a priority, the earlier, the better. Taking out a personal pension ensures you can make the contributions necessary to live a comfortable life in the future. Having a retirement plan can give you an idea of what to aim for.
Take Holidays Into Account
Holiday is a luxury as a self employed person. Sure, you can have time off whenever you like, but you will not get paid for it like you would in a regular job. Make sure you account for this in your earnings.
As a sole trader, you need to be a little more vigilant when it comes to protecting yourself. However, it can be far more enjoyable to work this way – providing you take the steps to safeguard your future!