5 things you have to know about being self employed

TL;DR

This video discusses five important factors for individuals transitioning from employment to self-employment, including the need for a good accountant, efficient invoicing, managing cash flow and debt, understanding pricing and value, and taking care of insurance and superannuation.

Transcript

good day and welcome to this week's video my name's robert gowdy and over the last couple of weeks i've had a chat to some young self-employed people and they're about they're going from being employed they've learned their trade and they're going out on their on their own and there was quite a number of really important topics that it was worthwhi... Read More

Key Insights

• 🤳 Hiring a competent accountant is vital for self-employed individuals to receive guidance on software selection and entity formation.
• 💐 Efficient invoicing practices help maintain a healthy cash flow and ensure timely payments.
• 😷 Self-employed individuals must manage cash flow and reduce risks by asking for upfront payments when materials are involved.
• 🤳 Minimizing debt and unnecessary expenses in the early stages of self-employment is essential for financial stability.
• 😫 Understanding the value of one's skills and setting appropriate pricing is crucial for profitability and avoiding undercharging.
• 🤳 Self-employed individuals should prioritize insurance coverage, including income protection and contributing to their own superannuation.
• 💬 Additional suggestions for self-employed individuals can be shared in the comments for further discussion.

Questions & Answers

Q: Why is having a good accountant important for self-employed individuals?

A skilled accountant can guide self-employed individuals on software selection and entity formation, allowing for flexibility in income distribution and ensuring compliance with tax regulations.

Q: How can efficient invoicing help self-employed individuals?

Timely and organized invoicing is crucial for prompt payment and maintaining a healthy cash flow. Including the invoice in the customer's vehicle or sending it immediately via email showcases efficiency and professionalism.

Q: How can self-employed individuals minimize financial risk when materials are involved in their jobs?

Asking for a percentage of the payment upfront before starting the job and collecting the remaining balance upon completion can mitigate risk and ensure that self-employed individuals are not burdened with unpaid bills.

Q: What should self-employed individuals consider when setting their pricing structure?

Self-employed individuals must understand their skills and value, and price their services accordingly. It is important not to undercharge and account for additional costs associated with running a business to maintain profitability.

Summary & Key Takeaways

• Hiring a competent accountant is essential when starting a self-employed venture, as they can provide guidance on software and entity selection for maximum flexibility in income distribution.

• Efficient invoicing is crucial for getting paid promptly and maintaining a strong cash flow, and strategies like including the invoice in the customer's vehicle can enhance efficiency and expectation.

• To minimize financial risk, self-employed individuals should consider asking for a percentage upfront before starting a job, especially when materials are involved.

• Avoiding debt and unnecessary purchases in the early stages of self-employment can help maintain stable cash flow.

• Setting an appropriate pricing structure is important to reflect the value of your skills, ensuring profitability, and avoiding undercharging.

• Self-employed individuals should prioritize insurance coverage, including income protection, trauma insurance, life insurance, and contribute to their own superannuation for retirement.