In this digital era, it’s never been easier to connect with people from around the world. This, in turn, has helped entrepreneurs launch new businesses in a more effective way – giving you more access than ever to customers across all walks of life. 

Being self-employed has plenty of appealing perks, granting you more flexibility and freedom. You’ll be able to make your own decisions about the future of your business and your working hours. For young people who value the ability to work around their own schedules and relocate at will, becoming a self-employed entrepreneur is often a dream come true. 

Thanks to all of the new tools and technologies available to modern audiences, there’s more scope for potential businesses than ever before. You can start your self-employment journey from your laptop and sell to customers across the globe – all with minimal costs. 

If you’re interested in becoming a self-employed business owner, there’s never been a better time. We’ve gathered some great ideas for businesses you can start with minimal investment, allowing you to seize the opportunities presented by the digital generation and become a successful self-employed entrepreneur! 

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What are the challenges associated with self-employment? 

Before you decide on an idea and dive into self-employment, you should understand the drawbacks, too. We asked Crunch’s self-employed clients about their most common challenges to help illustrate the real-world downsides of being a self-employed worker. 

‍“It’s hard to balance work and life because there’s no clear separation.” 

This is probably the most common problem reported by the self-employed, as balancing your time can be hard when there’s no real ‘break’ between work and life. Your business is going to bleed through into your personal life in some way – whether that’s taking calls after you’ve ‘finished’ for the day or being unable to switch off and focus on family time,

There’s no simple fix for this challenge. It’s about embracing the flexibility of self-employment from the beginning and learning how to set clear boundaries with your clients and, most importantly, with yourself. Set working hours that suit you and your family and stick to them.  

‍“Being your own boss can feel lonely and quickly become overwhelming because I don’t have colleagues or a management team to rely on.” 

Self-employed people often work in isolation, especially those who work mainly online. If you’re only communicating with clients remotely, work may quickly begin to feel lonely. When you’re feeling isolated, it’s hard on both your mood and your productivity - which in turn can lead to a lack of growth in your business. 

To help combat this, make sure you sign up for local networking events and experiment with co-working spaces. Taking a break from your home office to get out and about, meet new people and talk about your business with other self-employed people is a great way to feel like part of something bigger. 

‍“Making business decisions can be crippling. How can I know if it’s the right one?” 

When you’re an employee, you’ve usually got a manager who takes responsibility for big decisions. Self-employed people don’t have that luxury, and they can become overwhelmed by the responsibilities they have. You need to be able to position your business for growth AND make practical decisions around accountancy, tax, social media, marketing and more. 

Invest in freelancers or outsourced tools to help you spread the burden of everyday decision-making. Working with other experienced professionals can pay for itself by providing you with more freedom to work on what you’re good at. Our free accountancy tool, for example, helps self-employed people manage their money. 

Brainstorming digital business ideas in today’s world

The online world hasn’t just given us more tools and connections than ever before. It’s also led to a boom in the way we all do business. There are loads of different ways to sell online and one of the most common is ecommerce. In the UK, 2021 saw 24,000 new e-commerce businesses launched in a single year!

Of course, ecommerce is far from the only way to do business online. There are loads of great opportunities for you to start a self-employed business. To decide which is going to be right for you, follow our handy brainstorming process to find that spark of inspiration. 

1. First, write down any of the skills you have. These can be both ‘hard’ skills you have qualifications in and ‘soft’ skills like communication, empathy etc. Whatever you know you’re good at, write it down!
2. Secondly, write down what your interests and hobbies are. Go broad here; you never know which of your ‘things’ might feed into your new business venture. 
3. Write down the feelings and thoughts that come to mind when you picture yourself working online. What are the benefits you foresee? 
4. What kind of customers or clients do you want to work with? It’s okay if you don’t have an idea yet – but if you do, note them down. 
5. How much are you willing to spend to get started? You’ll need an idea of your budget before you start coming up with a plan. If you’re trying to launch as cheaply as possible, finding out what online self-employed businesses have the lowest start-up costs is an important early step. 
6. Now it’s time to do your research. Start by looking up business ideas based on your hobbies or interests. Make a note of the skills you have and match them to the businesses you like the sound of. For example, if you were interested in fitness and have a qualification in personal training, you’d have a strong set of matching requirements for an online coaching business. 
7. Once you’ve narrowed down your ideas, search for self-employment stories on YouTube and other social platforms like LinkedIn to see what being a sole trader is like compared to running a larger company. 
8. Put your best ideas through a filter of challenging questions to help assess if it’s truly worth pursuing. We’d advise the following:

1. How hard will this business be to launch?
2. How much will it cost me to launch it?
3. How long will it take for the business to become profitable?
4. Is there much competition in my area? How will I compete?
5. What equipment and support do I need to start?
6. Will I need extra help from other people? How will I factor that in?

Once you’ve done all of this, you should have a stronger idea of what business is right for you. If you’re still struggling, remember that imitation is the sincerest form of flatter – why not just gather ideas from other effective online businesses and put your own spin on it? Let’s take a closer look…

6 Tailored Business Ideas for Niche Audiences 

While getting going might be easier than ever, it’s also much harder to compete. If your business casts a net that’s too generic, you might find your larger competitors beat you to the sale time and time again.

To avoid that, it’s worth capitalising on niche interests and communities. In our brainstorming flow, we discussed coming up with ideas based on interests. Not only are interests good for forming ideas, but they also show you a sales path towards a specific type of audience. 

Here are six great online business ideas based on ‘niching down’ around your interests. 

Note: there are lots of other business ideas out there, but we’ve chosen to focus on those you can set up for very little and can generate returns quickly. Podcasts, YouTube channels and other creative ventures tend to start as a hobby before they can be monetised, so we’ve avoided them. 

1. Online Coaching (Most skills/interests)

Best for: Individuals with existing skills or interests that have a dedicated community

If you’ve got a talent or skill, have you considered teaching it to others? Practically any niche can be turned into a coaching business. All you need to do is search your interest and ‘coach’ or ‘training’ to see if it’s been done successfully. A quick Google returns all manner of coaches specialising in disciplines like:

• Life/wellbeing 
• Fitness
• Nutrition 
• Public speaking
• Business 
• Social media marketing 
• Leadership 
• Mental health
• Online gaming
• Chess
• Etc, etc – the list is virtually endless! 

Becoming a coach is all about self-motivation and developing a customer pipeline. Fortunately, delivering your training sessions is easier than ever, thanks to the utility of digital conferencing tools like Zoom. All you need to start are your own abilities, an enthusiasm for marketing and a sales plan to turn audiences into clients. 

Delivering your business service is straightforward, but putting everything else into place is where the challenge lies. You’ll need a website that demonstrates what you do and allows you to share testimonials and other content, a social media page to engage with your audience and some key digital tools such as a reliable video conferencing service and potentially a customer relationship management platform (CRM) to keep track of clients and sessions. 

Where to sell: Niche communities such as forums, Reddit, social media, etc 
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2. Virtual assistants

Best for: Organised people who will benefit from the flexibility of self-employment. Parents, retirees and those looking for side incomes

Virtual assistants work with businesses to help take care of everyday tasks and organise workflows. A good virtual assistant is a flexible resource for a client, so you’ll need to be ready to work odd hours and be responsive to client requests. 

Starting out as a virtual assistant can be challenging due to its low entry barrier, and many other individuals are competing to do the same thing. However, if you have any pre-existing experience with clerical and admin work, you should clarify that and position yourself as an expert. 

As you get started, you might list your services on marketplaces like Fiverr and PeoplePerHour – but we’d advise creating your own website, too. Whilst you won’t have the same database of clients that the other platforms have, your own website makes you stand out as a professional and means you can charge your own rate without worrying about commission.  

Where to sell: Fiverr, Upwork, PeoplePerHour, LinkedIn, your own website.
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3. Social media marketer

Best for: Social whizz kids who like to be ‘on the pulse’ at all times

Social media plays a big role in businesses – but so many of them are unwilling or unable to commit the time to manage their social media presence. You can bridge that gap and become a social media marketing manager, working to post, monitor and report on your client’s social media pages. 

To get started, you’ll probably want to invest in a social media management tool like Hootsuite, which lets you run multiple accounts from one place. You’ll need to attract and sell to clients in the same way as any other online business – but you have the added benefit of selling face-to-face by visiting businesses and pitching your services. 

In general, larger companies already have marketing teams, so it’s the small and medium-based businesses you can sell to. Make sure you keep a record of any successful clients or campaigns you’ve been involved in and use those to sign future clients. Be sure to check out our recent guides on being a social media success, including how to freelance as a social media content creator and how to make money on TikTok!

Where to sell: At in-person, networking events, social media and your own site.
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4. Sell handmade goods

Best for: crafty types with business vision

The internet has changed lots of attitudes and behaviours, including the way people shop. Where it was once a real challenge to purchase any form of handmade goods if you didn’t know the creator personally, it’s now as easy as typing in ‘Etsy.com’. 

Sites like Etsy and other creative-led marketplaces give makers a real home for selling. The popularity of the platform also means that customer interest in handmade goods has skyrocketed as more people look for unique or thoughtful gift ideas.

Popular categories include jewellery, furniture, pottery, crocheting and printmaking – demonstrating the wide variety of goods people are looking to buy and the options open to any handy creator. 

Remember, if you want to make a living as a self-employed person, you need to generate enough revenue to pay your overheads and fund your lifestyle. If you’re spending too long making your items and selling them at a loss, your business won’t be sustainable. You need to find the balance between time, price and quality – a tricky challenge for anyone! 

Where to sell: Etsy is the king of handmade goods. See our guide to becoming an Etsy seller here or alternatively, an article with the top Etsy alternatives for UK sellers.

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5. Narrators and voiceover artists

Best for: People who love reading and have a suitable voice

If you’ve got the voice for it, you can potentially make a good living online as a narrator and voiceover artist. Narrators are in high demand thanks to Amazon’s promotion of the Audible app. Thanks to the ease of self-publishing, plenty of authors find themselves in a position where they have begun selling their ebooks but can’t publish an audiobook until they find a narrator. 

On the other end of the market, you can also establish yourself as a voiceover artist for business videos and other commercial media. This may not be as ‘exciting’ but can generate more stable income. 

You don’t need to limit yourself to either choice – if you’re keen to embrace the challenge, you can try both and see which drives more revenue. Marketplaces like Fiverr and Voices.com allow artists to set up a profile and promote to a pre-built audience, so they’re a good place to start. 

Where to sell: Upwork, Fiverr, Voices.com and other voiceover platforms
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6. Language tutor

Best for: native English speakers and anyone with fluency in a foreign language

When you hear language teacher, you’re probably thinking of someone teaching a foreign language to English speakers. The reality, however, is that there’s a huge potential audience for non-native English speakers who want to learn the language. With very little in the way of formal training, you can become an English tutor and help people from all over the world.

To teach English as a foreign language, you should complete a course in Teaching English as a Foreign Language (TEFL) – or hold a different type of teaching qualification. Ultimately, it’s then up to you to set up your business in the same way as the other ideas in this guide – meaning a website, social media, listings on marketplaces such as Fiverr, etc. 

Where to sell: to secure customers and portray yourself as a professional rather than competing with lots of other sellers, we’d advise creating your own website to sell from. See our guide here. 

How to start a business on a shoestring budget

All of the ideas above require very little in terms of up-front investment, but there are still loads of other ways to save money when you’re starting off with self-employment. To get started as affordably as possible, here are some top tips for starting a business with no money. 

Use off-the-shelf software to save time

Early on, most entrepreneurs spend time juggling the day-to-day tasks associated with running a new business – limiting their ability to grow. Most of the time, a software solution can automate most of the work for you. Tools exist for all sorts of uses – from customer relationships, social media posting, financial planning and more. Even if you have to invest in a paid tool, the time-saving they represent might be worth it. Options include:

• Cloud storage: Google Drive, Dropbox, Microsoft365
• Task management: Monday.com, Asana, ClickUp, Trello. 
• Customer relationship management (CRM): HubSpot, SalesForce, Keap
• Photography/image editing: Unsplash, Pixlr, Canva
• Writing: Grammarly, Google Docs, Microsoft Word
• Communications: Zoom, Google Meet, Gmail, Outlook. 

Manage your own accounts

A good accountant might save you money, but even a small fee from an accountancy firm each month can mount up quickly if you’re just starting out. Rather than paying for a firm’s service, use Crunch’s accountancy software designed to help sole traders get started. 

Explore free marketing channels

When you’re new to the world of business, you might be tempted by offers around advertising. Unscrupulous businesses will make promises like: “Pay us X amount of pounds and we can guarantee X amount of sales.” Don’t trust them – advertising always has variable results, and costs can outweigh any gains.

Instead, use free advertising as you’re getting started to help grow a small but dedicated audience. Create social media pages for your business and interact with people relevant to your field through social groups and communities like Reddit. List your business in relevant directories and attend local networking events. 

Build a website for free

Okay, maybe we’re telling a little bit of a lie here – it’s better to invest a little bit of money into your website so you can own it outright and have a reliable host. It is technically possible to build a site for free, but with a small investment, you’ll get something much more stable and better for you. 

Building your own website saves you potentially thousands of pounds and gives you a true place to market your services. See our guide to building a business website to get started. 

Expand your network

Whether you’re selling B2B or B2C, you can benefit from a business network in lots of ways. Having peers means you can ask questions and get answers from people who have more experience, get general support on running a business and often find opportunities to grow your customer base. 

Most areas have networking groups and opportunities that are free to attend. All you’ll need to do is sign up and show your face. Create a short and punchy description of what you do so you can inform people and generate interest. 

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Exploring High-Income Digital Opportunities

If you’re not interested in more general business ideas and want to focus on profits, you’ll be interested in some of the highest-earning self-employment business ideas. Most require qualifications or training, but the rewards speak for themselves…

Software developer

Know how to code? You can build a lucrative self-employed career out of going your own way and working on the projects you choose. Developers are always in demand and as such, a freelance software developer commands average earnings of £49,333 per year in the UK. 

Freelance sales representatives

If you have the gift of the gab and can sell products or services, why not lease your abilities out to other businesses? Rather than selling your own business, you can work for others and take commission for each sale. In the UK, freelance sales professionals can earn as much as £38k base before commission is added. 

Project manager

Digital project managers are responsible for overseeing and organising entire corporations, dealing with everything from employee workflows and KPIs to budget-setting. A talented freelance project manager can expect earnings over £51,000 per annum. 

UX designer

Unlike more general graphic designers, UX designers focus solely on one discipline: user experience. Designing and improving the ways in which users interact with products and websites, UX design is in high demand. Freelance UX designers can earn £30-45k per year. 

Freelance SEO

Search engine optimisation deals with helping websites rank higher in search engine results, which is an in-demand skill most businesses require at some point in their lives. A competent SEO can achieve significant earnings based on retainers and project work, though the UK average is £35,766. 

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Decoding UK Income Tax for the Modern Self-Employed Individual

Unlike traditional employment, where taxes are calculated and taken from your pay, self-employed people have to calculate and pay taxes themselves. This can be a challenge for lots of people, but you can always use a tool like our free accountancy software to help you stay on track. 

Self-employed people have to complete a self-assessment and pay income tax and National Insurance manually. This is done at the end of a financial year and involves inputting your earnings and deductions to determine your tax liability. Your total earnings (less eligible deductions) that exceed the £12,570 personal allowance are what you’ll be taxed on. 

Tax rates change, but 2022-23’s rates are: 

• 0% on the first £12,570
• 20% tax on income between £12,571 and £50,270
• 40% tax on income between £50,271 and £150,000
• 45% tax on income over £150,000

These rates can look scary, but there are lots of ways to manage tax and anticipate your liability. 

We’ve written about it at length, so click here to read our definitive guide to income tax for the self-employed. 

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Launch a self-employed business today!

If you’re looking to take the leap into self-employment, you don’t have to go it alone. Use Crunch to keep your finances under control as you take the brave steps towards a new business and enjoy business ownership without accountancy worries. We’ll help you track your finances and tax obligations, leaving you to focus on winning clients and growing your business.