Being a sole trader can be an extremely exciting and rewarding experience, but it’s not always as straightforward as we’d like it to be. While it can look like a dream from the outside, the fact is that operating as a sole trader can throw up a long list of stressful challenges that regular employees simply don’t have to deal with.
That’s the bad news. The good news is that the stressful aspects of being a sole trader are well-known and common, and as such, there are nearly always solutions. In this post, we’ll take a closer look at the headache-inducing aspects of being a sole trader in more detail, as well as outline what you can do to overcome them.
The Admin Tasks Can Pile Up
You can overlook some sole trader tasks, and they’ll simply go away. Admin tasks are not like that. Not only will they not go away, but they’ll accumulate, and it doesn’t take long before there’s a long, time-consuming list of jobs waiting to be taken care of. Having an endless, messy list of admin duties creates background stress that can be hard to ignore.
You can’t get rid of admin tasks, but you can optimise your approach to them. Spending a day finding the right tools for each job — one exists, trust us! — and committing to one hour per week to take care of business can keep your admin pile manageable.
Tax Season Can Be a Headache
The pressure of having to submit taxes correctly is one of the few times when sole traders will get nostalgic about the days when they were regular employees. The fact that many sole traders leave it late until they start to get organised makes the task even more challenging.
Sole traders think of tax-related stress as inevitable, but it’s one of those things that’s easily avoidable, provided you have the right tools in place. There are Making Tax Digital for Self Assessment tools that are easy to use, fully automated, and involve no ongoing admin. All you need to do is sign up, connect your business bank account, and then let the software’s auto accountant do the work. It’s an effective way to not only reduce tax-related stress but to eliminate it entirely.
Cash Flow Troubles
Dealing with cash flow troubles isn’t just a stressful part of being a sole trader — it also puts your business’s existence at risk. Even sole traders who are profitable on paper can find themselves in real trouble if their cash flow isn’t as solid as it could be.
Getting a handle on cash flow really can make a big difference not just to your business’s ability to function, but to eliminating the stress that comes from having less cash to hand than you need to feel secure. The tip we mentioned above about using the right tax software can play a role here, helping to limit your tax obligations by claiming every available expense. Prompt invoicing, subtly raising prices, and auditing expenses can also all help.