So many of us dream of leaving our 9-5, to follow our passion and do what we love.
Having the freedom to take holidays when we want.
The flexibility to choose when we work and where, with complete control over what we do all day.
Helping people and making an impact in the world – with the unlimited capacity to make all the money we want!
And honestly? Yes. Being a business owner IS brilliant (there’s no way I’d ever go back now).
But being an employee also comes with perks, that it’s easy to overlook when you’re so focused on starting your own business.
Like the sick pay. Pension. Death in service benefit. Paid holiday. Private healthcare…
The good news is, of course, that as a business owner you can still have all these things. Often your business can pay for them, without any tax liability for you.
But you will have to organise them yourself – there’s no Susan in payroll to create your employee benefits package!
So if you’re considering leaving your job, to brave the life of an entrepreneur, here’s how to make sure you’re covered (literally):
1. Check your existing policies.
If you have private medical or life cover through your job, give the provider a call and see if it’s an option to keep paying the premiums privately.
This gives you continuity of cover (really useful if you have pre-existing conditions) and buys you some time to shop around for other options later.
You’ll have plenty of other stuff to do when you start your business – so this buys you a bit of breathing space, without losing the benefits or the secure feeling of knowing you’re covered.
2. Figure out what you need.
Unless you have a massive lump sum in the bank or a chunky redundancy pay out (and even then) – it’s always worth considering some private sick pay. So that if you’re too ill to work, you still have an income to live on and meet all your essential outgoings.
These are called Income Protection Plans (IPPs) and can cover your monthly outgoings, for a monthly premium. You can choose the deferred period (how long you need to wait before it pays out) and how much you want to be covered for each month, subject to certain restrictions.
Depending on your budget and the level of monthly payment that’s affordable, you can choose to cover either just your essential costs (like your mortgage or rent, food and utilities) or a greater proportion of your income.
You can choose a plan that pays out in the short term (1-5 years) or full-term, which will pay out until you reach retirement age. These are more expensive. But if you can lock in a good price when you’re young and healthy, all the better!
Whether you go down the IPP route or not, it’s always worth considering private healthcare too, so you can get treated and back to work quickly if you’re unwell.
3. Take advantage of being a Director!
I KNOW it easy to put “get a pension” to the bottom of your list. Especially in the early days of setting up your new business.
But I have so many women come to me 10 years down the line, regretting not sorting their pension from the start!
A Director’s Pension saves you and your business tax. When you’re entrepreneurial and love your business, I know lots of us feel we’ll never really stop working – but it gives you the freedom to choose, putting money away for when you want to work less hard.
Obviously you’ll be exempt from workplace pensions rules, so you don’t need to do the NEST thing – but the sooner you get your Director’s Pension in place, the longer your money has longer to grow (even if you’re not paying in huge contributions during the first 12 months).
And those are the 3 biggest things perks to consider when you leave your 9-5!
If you’d like my support to make sure you have everything in place, to build a secure financial future while you start your new business – our Retirement Snapshot Service is a great place to start.
You’ll get a clear, bespoke plan to follow, to make sure you’re on track for the future you really want.
And wishing you huge success with your business plans!