Have you been a tradesman for some time now, but can’t quite shift the feeling that you’d make a better fist of things on your own? If so, becoming an independent contractor may be a perfect way forward, giving you greater agency over your career, a better work-life balance, and potentially more money.
However, you can’t become an independent tradesperson overnight. It’s a steady transition that requires certain processes to succeed. Hopefully, these three tips will help you along the way and allow you to realize your dream.
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Find a mentor
Luke Skywalker was onto something when he sought out Yoda to mentor him as a Jedi, and you too should find somebody who can aid you in your quest to become an independent tradesperson. By talking with somebody experienced in your desired career path, you can gain invaluable insight that will help you avoid the mistakes they might have made themselves.
Ask them what they would’ve done differently in hindsight, what unexpected challenges they faced, and what opportunities they jumped on (as well as the ones they missed out on), so you can learn from both their missteps and successes.
If you don’t have anyone in mind to talk to, then ask friends or family members, or post something on social media about your plans and whether anybody has any advice. People love talking about their expertise, and plenty of tradespeople will be more than happy to have a chat with you. Failing that, there are professional tradesman mentors out there who can help you.
Sort out your insurance
While you’ve probably been able to rely on your employer’s insurance so far, you’ll need your own policy now you’re going solo. Whatever trade you’re in you’re sure to encounter various risks, whether that’s working at height with dangerous tools, or making a mistake on the job that leads to you being sued. Having a comprehensive insurance policy protects you financially in such situations, ensuring you don’t lose money if you can’t work, face a legal claim, or do something else.
One cover you’ll almost certainly need is public liability insurance, which protects your business from injury or property damage caused to third parties. As noted by insurance expert Tradesman Saver: “Having public liability insurance could be the difference between your business flourishing or going bankrupt. There’s no telling when an unpredictable accident will take place, and if your company has to pay damages for causing injury or property damage, you could be put in serious financial trouble.”
Another critical cover is employer’s liability insurance, which is legally required if you hire staff. Other covers you might want include tools insurance, personal accident cover, and professional indemnity insurance.
Register yourself
If you start working for yourself, you’ll automatically become classed as a sole trader, meaning you need to legally set yourself up with HMRC for tax purposes should you earn more than £1,000 in a tax year. This will involve filing a tax return each year and paying income tax on your profits, as well as national insurance. You may also want to name your business, making sure that it doesn’t contain ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company or ‘plc’, and isn’t the same as an existing trademark.
Alternatively, you could set your business up in another business structure, such as a limited company, a partnership or a limited liability partnership. Each of these affects things like your tax liability, the insurance you need, and the amount of administrative work you’ll have to do, so it’s well worth researching into the different types before deciding on one. You can find learn more about company structure with LegalVision NZ.
