What skills will I need to become self-employed?

How do I become self-employed?

I have a criminal record. Will I have any problems with becoming self-employed?

Where can I get help with business start-up costs?

What skills will I need to become self-employed?

Millions of people in the UK, from all different backgrounds, are self-employed across all different types of businesses. Some are very successful and earn lots of money; others do it as a lifestyle choice, enjoying the flexibility of being their own boss and working around other commitments.
Self-employment is not an easy option, however. To set up your own business successfully, you need to think carefully about whether this option will suit you. The following are key skills and qualities that will help you:


The work required to get your business off the ground will sometimes be difficult or maybe even boring; you need to be motivated to get on with it yourself.


You need to be confident in yourself and in your business idea, as there will be people along the way who will tell you that it’s not going to work and will not want to help you.

Organisational skills

Apart from the work you will be doing, there are lots of other things you need to plan for and paperwork that you need to complete. Will you be able to balance your business requirements with your other commitments and your personal life?

Good interpersonal skills

Setting up a business usually requires a lot of talking and networking with other people and other businesses. You need good communication skills and a polite and friendly manner to get others interested in what you are doing.

Reading, writing and maths

You need these skills to get to grips with managing your accounts and paperwork. Lots of people find these skills difficult, but you can get help (for free) to increase your confidence in these areas.


If you are self-employed, you won’t get wages and will need to be able to keep your business-related finances separate from your personal finances. You need to be able to budget to ensure that you have enough money to pay suppliers, the taxman and others.

How do I become self-employed?

To become self-employed, there are lots of things you will need to consider:

1. You will need to write a business plan. It is a good idea to get some help from someone with experience if you have never done this before. The following organisations can help you with this:

2. You need to decide on the legal structure of your business. You might decide to operate as:

You might also decide to:

  • operate as part of a franchise
  • become a participant in a cooperation.

3. You need to think about where you will work. If you rent out a premises for your business, you need to find out whether you will need to pay business rates.

4. You need to register as self-employed with HM Revenue and Customs.

5. You need to find out whether you need a licence, a certificate or specific paperwork for your business to operate legally.

6. You need to find out what sort of insurance you need. This might include (but is not limited to):

  • Public liability insurance: this covers you if somebody sues you for injury or damage to themselves or their property.
  • Employer’s liability insurance: this is a legal requirement if you intend to employ anybody.
  • Contents or property insurance: this can cover your business assets, such as equipment or your laptop.
  • Business car insurance: you need this if you intend to use your car or van for business-related purposes.

7. You need to find out what your business health and safety requirements are. For certain types of work, there are some things that the law says you must do. The Health and Safety Executive (HSE) offers advice and useful resources on their website.

8. If your work involves keeping personal information about others, such as the names and addresses of your customers, you need to think carefully about how you store and manage this data. The Information Commissioner’s Office (ICO) can give you advice.

I have a criminal record. Will I have any problems with becoming self-employed?

One of the advantages of becoming self-employed is that you do not need to worry about having to declare your past convictions to an employer.

However, becoming self-employed does not completely remove the potential problems posed by having a criminal record. Aside from the usual considerations that everybody starting a business must take into account, if you have a criminal record there might be a few hurdles to overcome on your way to self-employment:

  • Getting business-related insurance

If you have unspent convictions, you must declare these to your insurance provider if they ask you for a declaration. You do not need to declare them if you are not asked, but failure to declare unspent convictions to an insurance provider that has asked will invalidate your policy.

If you are having trouble getting insurance due to your unspent conviction(s), please contact the Criminal Record Support Service on 0300 123 1999 or helpline@nacro.org.uk.

  • Opening a bank or building society account

It is a good idea to keep your business and personal bank accounts separate. If you have past convictions for fraud, or if you are an undischarged bankrupt, you might find it difficult to open even a basic bank or building society account.

  • Taking on business contracts

Although being self-employed means that you do not need to disclose your criminal record to an employer, you may need to disclose your criminal record or be asked to provide a criminal record certificate for any contracts you may take on. For example, you might set up a cleaning business and take on a local authority cleaning contract. The local authority is within their rights to ask you to make a criminal record declaration and provide a criminal record certificate.

If this is something you are worried about, please contact the Criminal Record Support Service on 0300 123 1999 or helpline@nacro.org.uk.

  • Your reputation

If there was any media coverage of your offence, or if it is easy to find details of your convictions online, you might risk losing clients or customers if your name is attached to your business. You may wish to consider either changing your name, or trading under a different name.

Where can I get help with business start-up costs?

Setting up a business costs money. You might need to buy special equipment, for example, or do a course to get an essential industry-related qualification. You may need to rent office or retail space, buy products and get insurance before you start trading.

It can be difficult to work out how much money you need to get your business idea off the ground, but it is important to find out. Banks will often provide advice on this, or you can contact a business support helpline to speak to a business adviser.

Once you know how much you need, you might be able to get some financial help from the following:

  • New Enterprise Allowance

If you are aged 18 or over and receive either Jobseeker’s Allowance, Income Support (as a lone parent) or Employment and Support Allowance (if you’re in the work-related activity group), your Jobcentre Plus adviser can refer you to the New Enterprise Allowance scheme. Once referred to the scheme, you will get a business mentor to help you with your business plan. If the plan is approved, you may qualify for financial support.

  • Government schemes

You might be able to get some financial support from a government-backed support scheme to develop and test your business idea. Use this search tool to find out which schemes you might be eligible to apply for.

  • Bank loans

You could approach your bank for a loan if you are able to provide realistic cash flow forecasts and prove that you’ll be able to pay back a loan with interest. This option should be approached with caution; see here for further advice about taking out a bank loan.

  • Selling shares

You might be able to raise money for your business idea by selling shares to family or friends. Anybody you sell shares to will jointly own the business with you and may have a say in how the business is run. If you cannot raise enough through family and friends, you can look for sources of equity funding. See here for sources of equity funding.

  • Other sources

Startups has a range of articles on their website offering further advice on alternative funding options for small businesses.