Sam (employed, late 30s)
Sam was on the cusp of leaving her full-time job and setting up a business. Having been an employee for many years, she was unsure of the tax implications and how she’d manage her money. As she had significant financial responsibilities, it was important for Sam to understand exactly what was involved.
What we discussed
In the first session, we investigated Sam’s relationship with money. Events in the past were making her feel anxious about taking a big step. We then discussed her goals in more detail to establish Sam’s immediate priorities, including paying off debt and minimising outgoings. Next, we addressed how she’d structure her business and considered the differences between becoming a sole trader versus registering a limited company.
The second session was dedicated to discussing the company cashflow. This mainly involved working out the likely overheads and deciding how much to charge. We delved into the tax and National Insurance implications of being a company director to Sam could understand her potential net income.
In the final session, we focussed on pensions. Sam had a very small pension pot so realised she’d need to catch up by making significant monthly contributions. We discussed her likely retirement outgoings and created some forecasts to indicate how much she’d need to put aside. We went through the different types of pension scheme to Sam could make an informed decision on what was right for her.
Outcome
After three sessions (a total of four hours), Sam had a much greater awareness of what was involved in running her own business. Once she understood the tax implications, it was easier for her to plan the next year and also to make provision for retirement. With a strong understanding of financial matters, she hired an accountant to set up the business and manage her payroll.
Nora (self-employed, early 40s)
Nora had just completed her PhD and wanted to set herself up as a consultant. Although she had a clear idea of the area in which she wanted to specialise, Nora felt overwhelmed by too much advice and information on how to get started with her business. She wanted to clarify her aims and develop an action plan for the next six months.
What we discussed
First, we identified the key decisions Nora needed to take. This exposed some fears that had been holding her back. We devised strategies for making those steps less scary and giving Nora a greater sense of control. Feeling in control was key.
Our discussion also revealed risk averseness, a common barrier to self-employment. Nora has a mortgage and no proper pension arrangements, so needs a reliable income. However, she also finds it hard to charge clients a realistic fee and is working on some projects for free. We worked through the true costs of running a business – e.g. rent, insurance, software – and also factored in pension contributions. This gave Nora an accurate sense of her overheads and allowed her to calculate an appropriate fee structure. She felt more comfortable in quoting a price when it was based on an underlying calculation.
Like most of us, Nora finds marketing difficult. We talked through some strategies, such as focussing on solving clients’ problems rather than “selling” herself. Nora tried out some pitches on me and we refined the message to focus on the client.
Outcome
After a 90-minute session, Nora had developed an action plan. She’d also addressed her fears around risk and control.
Tony (self-employed, early 30s)
Tony had recently left his secure full-time job to start a business. Although he was already securing contracts, he worried about the charging structure and whether his model was sustainable.
What we discussed
Like many freelancers, Tony felt uncomfortable in negotiating fees with clients. As he was working mainly in the public sector, he was also concerned about affordability. This meant he wasn’t necessarily charging a realistic amount for his services.
We discussed some strategies for conveying value, and also adding value, rather than lowering the price. Tony then sketched out a pricing structure to improve transparency and set some limits on what he was offering.
Next, we addressed the longer term, including how to avoid overreliance on a small number of clients. Given Tony’s initial success, we also looked at how he could scale the business. This part of the session revealed a possible challenge to Tony’s core values around work-life balance. Often, we focus on the risks of failure, but ignore the risks of success.
Outcome
After our 2-hour session, Tony had both a plan for the short term and also a longer term view on the future challenges. He was clearer on his core values and also realised how much he had achieved.
Lucy (employed, mid 30s)
Lucy was employed full-time but was keen to become a freelancer. Although she craved the freedom and flexibility, she also feared the uncertainty and pressure of being completely independent. Feeling overwhelmed, Lucy needed help in breaking down the challenge to make it more manageable.
What we discussed
Lucy’s main fears were around not earning enough money. One of the primary reasons for becoming self-employed was the opportunity to pursue more creative projects, but Lucy realised this came with additional risk. We discussed taking on some reliable, unexciting projects to generate a basic income, but still allowing enough time to develop other areas.
Another concern was energy levels. Lucy’s proposed business partly involved running events, which are notoriously exhausting. We identified a potential portfolio of work that would allow her to balance demanding activities with more sedentary projects.
Lucy also hated the idea of promoting herself on social media but thought this was unavoidable. We brainstormed more palatable alternatives and outlined a marketing strategy.
Outcome
After a 2-hour session, Lucy was more confident in her abilities and felt as though the move to self-employment was actually feasible.
Marine (self-employed, early 30s)
Marine was trying to decide on a career path. She had a few choices, including pursuing a full-time teaching job, but also felt pulled in the direction of building her own business.
What we discussed
Although the teaching career was a good choice in terms of stability, Marine needed the challenge and flexibility of a freelance career. We discovered through our conversation that her outgoings were relatively modest but, as the main breadwinner, she required a predictable income. We outlined the types of project that would be suitable so she could identify clients to contact. It was clear from Marine’s body language when she was talking about work that really motivated her.
Outcome
Following our two 1-hour sessions, Marine planned a portfolio career that would provide some stability, along with opportunities to develop and explore new areas.