Setting up a new business - #6 Homeworking, Offices & Freelancing

Working from home?

The rise of the Internet over the past five years has dramatically changed how people can run their businesses. Web design, search engine optimisation experts and webmasters can work from the comfort of their own homes, with very low overheads. But what are the problems or drawbacks that have to be considered before making this decision? And what are the rewards and benefits that can be gained?

• Working from home articles

Moving into an office is a big step when you run a small business or start-up, and finding the right premises in the right location and at the right price is a daunting task. Get it right, and your office premises will help you improve productivity, attract and retain good employees and give a positive impression to your customers.

But get it wrong, and you could be left tied into a costly lease with premises that might not suit your needs in the future.

A virtual office solution will provide you with a total office experience without having to physically lease office space.

The next type, serviced offices are extremely attractive to new start-ups as a first office or companies that want flexibility in a professional environment. Whether you need to move in for a day, a month or a year, serviced offices can be leased on a short term basis and as there is no capital expenditure required, it’s a low risk arrangement for your business.

The final type of business premises you might want to consider is a conventional office solution. If your office needs to accommodate 25 or more employees or you’re fairly certain of your business’s likely growth over the next few years, then renting a leased office might be the best solution

• How to find an office for your small business

IT Contractors and other freelancers tend to be highly skilled professionals who are hired by client companies to plug short term gaps in projects. Contractors are typically hired on 6 month or 12 month contracts to fulfil a specific role on a project.

Contract rates vary a great deal according to your skill set, but typically contractors are better paid than their “permanent” employee counterparts, however there are a large number of things to consider before deciding if contracting will suit you.

Unlike permanent employees, as a contractor you will effectively be your own boss – free to a great extent to decide when and where to work (subject to the strength of the market for your particular skills). Typically, you will also be responsible for running your financial affairs (via a limited company, umbrella company, or as a sole trader), and reacting to changes in the supply of contract work.

To be successful in a professional sense, clearly you need to be an expert in your chosen field (the rates will typically reflect the level of expertise required for a given role), however being successful in a lifestyle sense is perhaps a more important consideration before deciding to go it alone.

Contractors tend to be fairly self-sufficient, able to work on their own as well as in teams. You must be able to deal with lean times as well as boom times – if you’re lucky you may get extensions and be on the same project for years, but there may well be gaps when you’re out of contract for months at a time. This insecurity is something many people cannot deal with, so they prefer to stay as permanent employees.

If you’re happy that you would relish the chance to work on your own and be responsible for finding work, you will also need to fulfil a number of accounting and administrative obligations. Fortunately, there are a number of specialist accountancy firms out there who deal solely with freelancer and contractor clients, so all the hassle of paying yourself and the tax authorities can be taken care of with a monthly fee.

There are many benefits to becoming a contractor – you instantly gain a great deal of freedom and the chance to decide when and where you work. If you choose the right legal structure to work under (limited company, etc.), you’re also likely to pay less tax than a permie. However, you must be able to deal with the lean times and the responsibilities with come with effectively running your own small business.

• Guides to IT Contracting & Freelancing

• On to Part 7 - Setting up your website