The entrepreneurial dream is very much alive in the UK according to new figures which suggest 5.3 million people want to become a freelancer and be their own boss.
Direct Line for Business found that 10% of employees, equivalent to the 5.3 million workers, dream of becoming their own boss. That's in addition to the 8.6 million (16%) who already freelance full-time or carry out freelance work alongside their full-time job. And a further 12% of workers in the UK have freelanced in the past.
Breaking into freelance work is something many people will only consider if they have a chunk of savings, especially if an initial contract or client hasn't been secured. Seventy-one per cent of self-employed workers saved up enough money to cover living expenses before going freelance, while the remaining 29% admitted they had nothing saved before quitting their full-time to go it aline.
The average freelancer saves up to £16,000 before setting up on their own - equivalent to 70% of the average annual salary in the UK. Most said their savings cover potential shortfalls in monthly income (43%), while a third said it enabled them to purchase essential business goods. Another 16% said the funds covered them for holiday or sick leave.
In addition to financial savings, taking on sole responsibility for tax and legal issues were among the biggest concerns for people before they become self-employed. On average, self-employed workers spend seven months and three weeks preparing to go freelance, with 27% spending that time to read up on tax implications. However, one in three said they spend less than a month preparing to start on their own.
Jazz Gakhal, managing director at Direct Line for Business, said: "Going freelance is an exciting prospect, with the idea of becoming your own boss extremely tempting. There are pros and cons, of course, as independent contractors can often earn more by charging day rates, but don't benefit from paid holiday, pensions and sick leave. Any budding entrepreneur should consider the value of these additional benefits as well as any change in salary before making the leap.
Dealing with tax issues is one of the biggest concerns for freelances before setting up shop, with a third (33%) seeing this as a major hurdle for going it alone. Other issues include not getting paid when on holiday and being able to meet existing financial commitments (26%). One in five (20%) worries about marketing and bringing in new clients and the same amount again not being able to save for a pension (19%).