Dreaming of becoming your own boss?

New research commissioned by insurance experts Direct Line for Business has revealed that the entrepreneurial dream is alive and well in the UK, with 5.3 million people dreaming of becoming their own boss one day.

The data, conducted by Optimum amongst a nationally representative panel of UK adults, found that over 8.6 million people currently work on a freelance basis, with a further 5.3 million (10%) dreaming of going freelance and being their own boss.

The research also found that a further 12% of Brits had previously worked as a freelancer.

Breaking into freelance work is something many people will only consider if they have a nest egg saved up, especially if an initial contract or client hasn’t been secured.  Overall, 71 per cent of self-employed workers saved up money before going freelance, leaving a plucky 29 per cent who admitted that they had nothing saved before starting their business.

£16,000 is the average amount of money saved by a freelancer before committing to their own enterprise, the equivalent of 70% of the annual salary (based on a net median UK salary of £23,208 in 2018, ONS Annual Survey of Hours and Earnings, published October 2018). 

Most do this to allow for potential shortfalls in monthly income (43%), to ensure they have funds to purchase essential business goods (34%) and to build up a fund for holidays or sick leave (16%). 

For more than two thirds (69%) of the self-employed people who saved up money before going freelance, this money was enough to meet their needs. This should all be encouraging news for the one in 10 Brits (5.3 million people) who have never been self-employed but dream of one day setting up their own business.

“Going freelance is an exciting prospect, with the idea of becoming your own boss extremely tempting,” said Jazz Gakhal, managing director at Direct Line for Business. 

“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.”