Many people like the idea of becoming a sole trader, and it is easy to see why. As a sole trader, you are your own boss, and you can operate your business exactly how you wish. In addition to giving you control over your business, this can also help you to build a healthy work-life balance and choose your own schedule. Operating as a sole trader is also unique and different from running a regular business, which means that you need to know how to succeed with this business model. With this in mind, this article will offer advice for a sole trader that should prove to be useful.
Know How To Network
One of the most important skills that any sole trader can have is networking. To find continued success with your business, you need to build a large network and maintain this network over time. Meeting people face-to-face is the best way to make a positive and lasting impression, and then using social media to maintain these relationships over time is effective. Having a large network can help you to discover new customers/clients, improve your brand reputation, and allow you to find new opportunities.
There are many benefits to running your own business, but one of the challenges is that it is up to you to keep on top of all business tasks. For many, this can take away from the service and key competencies that you provide. If you are a builder, for example, then you do not want to be using your time messing around with bookkeeping and marketing! This is why it is a good idea to outsource these areas so that you can focus on other areas while getting these tasks completed by a specialist. A few areas to outsource include:
- Digital marketing
- IT and cybersecurity
Make Sure You Have Insurance
You might wonder do sole traders need insurance. Absolutely, especially as you are liablefor any losses or debts incurred. Without proper coverage in place, you would be responsible to cover any damages, and this could ruin both your business and life. With insurance in place, you can protect your income, property, and personal assets and enjoy peace of mind. The kind of insurance that you need for your business will depend on the type of operation, but a few of the most common types include:
- Income protection
- Professional indemnity
- Public liability
- Tool and equipment
You will want to establish what your risks are and shop around to find the best deals for insurance.
Have An Emergency Fund
Leading on from this, it is also a good idea to have an emergency fund both for the business and for your personal finances (always keep your finances separate). The money that the business brings in can fluctuate over the course of a year, so you need to be able to manage any quiet periods. It is generally recommended to have at least three months’ worth of expenses in an emergency fund, which will help you to stay afloat if you have any issues.
There are many benefits to being a sole trader, but it also has unique challenges, and you need to know how to prepare for these.