The number of self-employed people on the Isle of Wight has risen by 18% since the financial crisis and now stands at 10,300, according to new figures published by the Office of National Statistics.
The rise comes as experts at Business Debtline called for more support in tackling the ‘advice gap’ for those starting out in self-employment.
New figures show an estimated 10,300 people on the Isle of Wight were self-employed in 2014/15, equating to 17.8% of the working population. The total is up from 8,700 before the recession in 2007/2008, as more and more people turned to working for themselves.
The figures were highlighted by Business Debtline, the free debt advice service run by the Money Advice Trust, to warn of a worrying ‘advice gap’ for people starting up their own business. It says that many self-employed people get into difficulty because they started trading without the help needed to understand how to run a business and keep finances on track.
43 sole traders, partners and other small business owners on the Isle of Wight contacted Business Debtline for help with business debts by phone last year, and the charity is concerned that many more self-employed people in the county who are struggling are not getting the free debt advice they need.
Claire King, the Money Advice Trust’s Insight Manager and author of the research, said:
“The surge in the number of people who are self-employed on the Isle of Wight is one of the consequences of the recession – and in many ways they are the unsung heroes of our economic recovery. Unfortunately, some are paying a high personal price for the risk they have taken to support the economy. We must do more as a society to give them the best chance of succeeding.
“We would like more to be done to widen access to the business advice and information at the outset of people’s journey into self-employment. This really can make the difference between triumph and disaster.
Article continues below this advertisement “Fortunately, where the self-employed do find themselves in financial difficulty, free, independent advice is available to help them resolve the situation. I would urge anyone on the Isle of Wight who is struggling to cope to seek free advice from Business Debtline as early as possible.”
In its new report, The Cost of Doing Business, the charity revealed the challenges facing many self-employed people who are struggling to cope. More than one in three Business Debtline clients interviewed drew less than £100 income from their business each month, leading to a constant struggle to stay on top of their personal, as well as business, finances – and more than three quarters (76 percent) had to cut down on household spending as a result.
Business difficulties were found to have a significant knock-on effects, with more than eight in 10 (82 percent) affected by stress, anxiety or depression and more than half (54 percent) suffering sleep loss.
Business Debtline’s three top tips to people starting out in self-employment:
Keep your business and personal finances separate
Opening up a business bank account will help you keep your business and personal finances separate and help you avoid seeing the money you need for your personal household being swallowed up by the business. Think very carefully before mixing the two, especially by propping up your business up with personal credit.
Set a business budget, and don’t forget cashflow
Setting a business budget is crucial in assessing assess your income and expenditure and ensure you are on a sound financial footing. This will also help you identify where you can cut costs and increase profit margins, in order to maximise the wage you can draw. Don’t forget to consider cashflow – this is one of the biggest causes of financial difficulties, especially early on. The Start Up Loan company’s Cashflow Forecast can help.
Seek out information – and seek free advice if you are struggling to cope
There are some sources of advice and information out there that can help you run your business, such as Gov.uk and Great British Business – so make sure you use them. If you are starting to struggle financially, the best thing to do is contact Business Debtline, the UK’s only free, dedicated debt advice service for the self-employed, as early as possible.
Business Debtline, provides free, independent and confidential advice 24 hours a day online at www.businessdebtline.org and on 0800 197 6026.
