The cost-of-living crisis has impacted most people on an individual level, but little has been reported on the effect it has had on the self-employed.
A new study by Markel Direct, the specialist insurer of small businesses, has revealed the key challenges the self-employed are facing in 2024, with “irregular income due to economic issues” taking the top spot.
The study, which asked 500 self-employed people a series of questions related to their business or work, also identified a “limited client/customer base” as a problem for more than one in three respondents (34%) and “seasonal fluctuations” as the third-biggest challenge, with 33% of those surveyed experiencing this.
The study also uncovered that 41% of self-employed people have experienced a decrease in their income over the past 12 months, with the most common reason for this being a lower volume of new clients and customers to convert (reported by 62% of respondents).
Additionally, over a half of those surveyed (56%) reported having to increase prices due to the rise in the cost of living, which could also be contributing to the lower volume of customers.
Rob Rees, Divisional Director of Markel Direct, said, “There is little the self-employed can do to influence the economy itself; however, there are steps that can be taken to mitigate against the risks these economic issues bring. For example, implementing a prompt and efficient invoicing system can help ensure timely payments from clients.
“Offering incentives for early payments, or charging penalties for late payments, can assist with getting paid on time, and developing a broad client base that spans across different industries can help manage income fluctuations at those times of year when work can be slower.”
The benefits of “being your own boss” outweigh struggles
Data from the Office for National Statistics (ONS) provides insights into this ever-evolving landscape, and, despite the challenges, it shows that there has in fact been a 2% year-on-year increase in the number of self-employed workers.
As well as this growth in self-employed workers in the UK, a significant 92% of those surveyed said they intend on remaining self-employed in the future.
“Being their own boss” was cited as the biggest benefit of working for yourself, and was given as the primary reason of entering the world of self-employment in the first place by two-thirds of respondents. Other factors included “flexibility”, with 55% selecting this, whilst “escaping traditional employment systems” and “pursuing a passion” were both selected by 34% of respondents.
