Have you always dreamed that some day you’d become self-employed? Well, dreams can come true and you can make it happen.
Millions of people around the world run their own businesses in some shape or form. Whether they're part of the gig economy and have a side hustle, they’re freelancing while working full-time, or they’re busy launching a startup.
If you’re serious about being your own boss and having your own career as a solopreneur - then it’s wise to start thinking about the steps involved in running your own business and making it a success.
It’s critical to think carefully about which legal structure is best for your business, how you plan to manage your finances and international payments while maintaining compliance and being able to report on tax and VAT.
It’s equally important to consider where to register your company - based on tax rate advantages, access to larger economies of clients and customers, and the ease of running a business online.
That’s why so many solopreneurs are choosing to register companies in Estonia, via the e-Residency program. With access to the large EU market, ease of doing business 100% online, and the ability to quickly and easily register a company and file taxes online - it’s no wonder that thousands of entrepreneurs around the world are opting for Estonian e-Residency.
One of the best ways to register an Estonian company, open an Estonian bank account, manage your online business accounting and financial compliance for your Estonian business is to subscribe to Xolo Leap’s suite of business services. These services have been designed specifically for solo business owners who choose to become Estonian e-residents from countries across the world.
Self employment means you get to be your own boss. Whether you’re a freelancer, a consultant, or you have your own business - being self employed is all about being in the driver’s seat when it comes to your career and your earning potential.
There are many different career options when it comes to being self-employed. You don’t need to fit into any stereotypical role and you don’t have to do it as a full-time position either. Many people start out working part-time or as a hobby on something they’re interested in, that then does so well they transition to doing it full time.
Whether you’re a musician, a fashion designer, a social media influencer, a wellness coach, accountant, or teacher - there are many opportunities to start a solo career where you work for yourself.
Being your own boss sounds attractive, but it isn’t for everyone. While it can be rewarding and fulfilling, and oftentimes quite lucrative - it can also be lonely, stressful and quite risky. It’s a good idea to know what you’re getting into before you commit to starting your own business.
Below we look at the types of self employment and how to decide if running your own business is for you or not.
You may be interested to know that there are lots of different types of solopreneurs, entrepreneurs or independent workers. That includes being a freelancer, consultant, small business owner, or having a startup.
These categorisations are similar in that they all give the opportunity to work for yourself and take on clients - but they have slight distinctions, which we point out below.
Freelancers may work in a part-time or full-time capacity for just one client, or for a range of clients. Freelancers typically work on contract and are not employees of any business - rather they provide services to other people or businesses. That means that they typically don’t receive any benefits like sick leave, paid vacation days or health insurance cover.
As a freelancer you can work in a company’s offices or remotely - with a large number of freelancers opting for remote jobs around the world. Remote work freelancers are able to use freelancing platforms like Xolo Nation to find clients and manage payments. Freelancers are often paid hourly or on a milestone basis.
Some examples of freelance jobs include being a marketing manager, a graphic designer, a website designer, a copywriter or an editor.
Consultants are often specialists in a particular field who may have significant experience working for organizations in their sector. Consultants then typically offer their expert services on an hourly or project basis and may need to tender or quote for jobs that may span several months and include a set number of deliverables.
For example, you may be a financial or tax consultant, an environmental consultant, a marketing strategy specialist or a business management consultant.
If you’re part of the gig economy, you may have a side hustle going where you work just a couple of hours a week to make extra money, in addition to having a full-time or part-time job with an employer.
That could involve jobs like house-sitting, dog walking, being a weekend wedding photographer etc.
You may want to start up a small business that you grow over time. That may be done as a solo-enterprise at first, or even as an entrepreneurial journey along with someone else.
Startups may be funded through seed funding, venture capital or other types of initial investments and typically aim to grow significantly over time. Startups therefore focus a lot of energy on business strategy and growth and are often involved in innovation, technology and digital services.
There are many trades and creative pursuits that can also be used as the basis for being self-employed. You can run your own business as a landscaper, electrician, musician, painter, decorator or locksmith.
These types of jobs can be done on a full-time or part-time basis, and you’ll typically be paid for the work done, rather than on an hourly basis. Most trades and creative careers are performed locally within your area, but if you become highly specialized or skilled then you may be contracted to work further afield or internationally.
Oftentimes tradespeople need to subcontract work to others if they’re working on large projects, or hire staff to help manage the workload.
Yes! There are many people around the globe who have full-time or part-time jobs and have small businesses or freelance as a side hustle. While you’ll need to check with your employer if you’re legally allowed to do that (you may have signed a restraint of trade agreement that prohibits it, for example), many people supplement their incomes with extra work.
If you’re considering self-employment as a career move, then it’s good to do your research on the pros and cons of working for yourself.
Many people view being your own as the ideal job because - assuming that it’s a life of flexibility, working when you want to, being able to always take on the jobs you like - and being able to have the ultimate work-life balance. While some entrepreneurs definitely manage to achieve this, there’s a lot of hard work, long hours and late nights that can go into managing your own business.
Below are some of the pros and cons of life as an entrepreneur.
Pros of being self-employed and working for yourself
Cons of being self-employed and working for yourself
If you’ve decided that you’re suited to being self-employed and you’re aware of all the pros and cons - the next thing to do is to learn about the steps to becoming your own boss.
Here are some of the steps you’ll need to take to start being an independent worker:
You may have a wide range of skills, but to start a business, you’ll need to decide on a niche and focus on what particular services you plan to offer, or what type of products you want to sell.
Part of defining your niche involves taking a look at your competitors to see what unique service offering you can create that differentiates you from others.
For example, you may be a graphic designer. But you might decide to have a particular niche in working with foundations, charities and nonprofits. That may be part of your unique skill set that sets you apart from others.
Even if you think you know exactly what you want to do, writing it down into a well documented and thought out business plan is always a good idea. The process of writing a business plan can be illuminating and may help you define your niche, your unique offering, how to market yourself better and how to find clients.
In today’s hyper-competitive world, marketing is a crucial aspect of any successful business. You’ll need to take time to consider exactly how you plan to build your brand, your reputation and grow your client or customer base, by creating a marketing strategy.
And finally, taking time to figure out a pricing structure can help you to scale the business in the long-run if it’s done correctly from the start.
Not only are budgets important for forecasting your earning potential and how much you need to charge, but they are also a way of keeping track of income and expenses so you know what your cash flow is at all times.
Cash flow is important for all businesses, but if you’re a start up it can be even more relevant. Having a budget can also help you innovate and think of new avenues to make money and make the most of being self-employed.
A frequently asked question when it comes to starting a new business is “what legal structure do I need to be self employed?”.
Once you decide what type of solopreneur you want to be - you’ll then need to consider the relevant legal structure for your business.
That includes being a sole trader, partnership or private company - and these legal entities will vary depending on where you register your company.
Choosing the right legal structure is important as it may affect your accounting requirements and the amount of tax you pay. Many types of legal structure can also help protect you from legal liability in your personal capacity.
Do you know where you’ll bank, how you’ll handle foreign payments, or how you’ll handle invoicing customers and clients? Having a financial plan will help you to answer these questions and put processes in place to make financial administration easier and more simplified so it doesn't consume all of your work day.
When you’re self-employed, you’ll need to manage all aspects of your business. From finances and accounting, to marketing, sales and customer care.
To stay organized and productive you’ll need to find a suite of tools to use for each of these business management functions. And ideally these tools should integrate and work together to streamline your operations.
Take time to figure out which tools you want to use, depending on your unique niche and your budget. For example, if you plan to send out regular emails you may want to look at email marketing tools like Mailchimp. Or if you’re planning to manage large numbers of sales, you may want a CRM like Salesforce.
Once you’ve covered steps 1 to 6, you’ll be ready to start trading or offering your services. This is the part where all your planning gets put into practice and you start implementing all of the strategies you’ve taken time to craft.
Once you’ve made the decision to start work as a freelancer, tradesperson or another type of self-employment, you’ll also need to decide which tools to use to stay organized, productive and to collaborate and communicate with your clients and any staff you may have.
Below are some useful tips and suggestions of tools you can use to manage your payments, accounting, tax, and other aspects of business management.
Solopreneurs can apply for Estonian e-Residency and then easily register an Estonian OÜ (similar to an LLC) company all online.
The advantage of having a business registered there is that you can run your business remotely without needing to live there. And because Estonia is part of the EU, you can access the large EU market and open an Estonian bank account to manage all your transactions.
Plus, Estonian tax rates are quite competitive, and their e-services make conducting business online simple and easy. Even tax returns can be submitted online in Estonia!
One of the most efficient and effective ways to become an e-Resident and register your business in Estonia is to use the services of a reputable e-Residency service provider like Xolo. We’ve helped over 110,000 entrepreneurs around the world to ‘make the Leap’ and start businesses in Estonia, using Xolo Leap.
One of the most difficult aspects of managing your own business is to get used to managing your small business finances.
Having a business bank account and using accounting software can go a long way in making sure your finances are organized.
It may help to have a separate business bank account to keep your finances organized, and to comply with legal rules.
In addition, you’ll want to have access to a system of managing money in different currencies like Xolo Leap.
Accounting software helps you stay organized and maintain productivity and efficiency, while keeping backups of all your files.
When you use Xolo Leap you get access to all this and more. You’ll be able to keep track of expenses by uploading a photo on your phone, or even emailing invoices. You’ll be able to invoice people in almost any currency and have the VAT amount automatically calculated - saving you countless hours!
Xolo Leap can also help you prepare for annual tax reporting or audits review, and integrates with payment gateways so that you maintain compliance no matter where your clients or customers are based.
Taking out insurance helps to protect you from unforeseen events that may happen in future. If you’re a sole trader and haven’t registered a company, then you will need to consider personal insurance.
Business insurance can also include cyber insurance which is a good idea if you’re running an online business or any kind of e-commerce. That can help to protect against the risks associated with cybercrime and data breaches, which can be costly and protracted to mitigate.
As a solopreneur or someone keen to become self-employed, you’ll want to dedicate as much of your time as possible to actively managing client relationships, to implementing your business strategy and to overseeing all aspects of your business.
Automating and outsourcing routine and administrative tasks is a prudent strategy to help you free up more of your time to work on the important stuff.
You don’t want to be worrying about issues like ‘how to manage finances’, ‘how to get paid’, or ‘how to pay tax as a self-employed person’.
That’s where services like Xolo Leap can help. Xolo Leap is a subscription service for Estonian e-residents that includes:
If you’re ready to launch your Estonian-based company and manage it remotely from anywhere in the world, try Xolo Leap Pro (our most popular plan)!
Andy is a seasoned digital nomad and content writer. He has been running a fully remote digital marketing agency and traveling the world for the last 10 years. Andy shares his advice and insights on digital nomads and the future of work on his blog, Andy Sto.
and get the latest updates and expert
business tips straight to your inbox.