Working for yourself

INTRODUCTION

In a climate of constant change, library and information workers are increasingly considering working for themselves. Many organisations have shed permanent staff and rely more on consultants and freelance personnel. Early retirement, redundancy or unemployment are a frequent reality, and working for yourself offers a chance to continue to make use of the broad range of skills and experience acquired over the years. You may be attracted by the independence of working for yourself - a chance to make your own decisions, manage your own time and enjoy the rewards of your own efforts. Alternatively, it may be dislike of your present work situation that leads you to consider alternative ways of working.

There are, in addition, increasing opportunities for short-term and project style work. Library and information recruitment agencies have regular vacancies for this type of work, offering the opportunity to be independent whilst still having the status of an employee.

This leaflet, however, focuses on setting up in business for yourself. Careful research and planning are required before making this decision. The job market will vary from area to area but, whatever the local situation appears to offer, there is a lot at stake and you need to consider every aspect carefully before striking out on your own.

SO BEFORE you take the plunge and set up your own business ASK YOURSELF

• What has triggered your desire to CHANGE? Is it that you feel that working for yourself would allow you to use your skills most successfully? §
• Is your PERSONALITY (as well as your skills) suited to working in this way? Review honestly what you want and need from work.
• Would you be happy working ON YOUR OWN?
• Are you able to plan and manage your own TIME - and know when to call a halt?
• What have YOU got to offer that firms or individuals would be prepared to pay for? § How will you keep your SKILLS current?
• How do you decide which MARKET to aim at?
• How are you going to get KNOWN?
• What should you CHARGE?
• Could you handle your own FINANCES?
• Are you prepared to research and arrange your own INCOME TAX, VAT, NATIONAL INSURANCE PAYMENTS and PENSION SCHEME?

It is essential to do thorough research before making your decision to go freelance, so that you are confident that this is the right choice for you. It will also help you work effectively, once the decision is made. Look at books and articles on the competencies needed for solo librarianship, on entrepreneurship in library and information work and on alternate careers in this profession. The Members' Information Service at CILIP: the Chartered Institute of Library and Information Professionals holds relevant information. Also make use of more general publications on starting your own business and self-employment, available from larger public libraries. Adult education centres or the local Chamber of Commerce may run introductory courses, which will give a realistic flavour of what is involved in working for yourself. Distance learning courses, for example those run by learndirect, are also available.

WORKING ON YOUR OWN

Being self-employed in the library and information profession may mean spending long periods of time working on your own. Delightful though this may sound, it is important to remember that workplace colleagues provide companionship as well as advice, practical support and a sounding board for ideas. You need to be confident that you will not suffer from loneliness. Equally important is the capacity for self-motivation and self-discipline. There will be no one - except the client - to make sure that you meet your deadlines. Other essential qualities include the ability to be assertive with people who wish to interrupt you when you are working.

There may however be opportunities to work in association with others. Self-employed workers can form themselves into a consultancy, each with an individual area of expertise. Alternatively an individual contract may result in several people being employed to undertake different aspects of the work. Good links with fellow 'independents' may result in their recommending you to clients for your specific expertise and vice versa.

WORKING FROM HOME

Working from home, as many consultants do, can be enjoyable but also presents problems.

You need a quiet place to work with an identifiable area that is yours alone. To achieve this, you may need to carry out some alterations - either for your own practical needs or to meet local planning requirements. Check with your local authority, as you may require planning permission or need to notify them of change of use. This may affect any future plans to sell your house. If your house is rented or leased, there may be a clause in the letting agreement that excludes working at home. Consider whether you wish to use some space for discussions with clients or whether you would feel happier, or safer, visiting them or finding some neutral place to have meetings (such as a local hotel coffee shop). Your working environment should be safe and designed with your welfare in mind.

You may also need to make childcare arrangements to avoid interruptions, since working from home blurs the distinction between home and work. Get the balance right. Work seems to come all the time or not at all. As well as working under pressure on your own and at unsocial hours - weekends and evenings when necessary - it is important to build in some time for your family and leisure activities. A telephone answering machine is essential and can help minimise work intrusions when you need some time off. It enables you to be methodical and efficient at managing your workload.

You will need to set up an office, and acquire a range of equipment, such as:

• Business phone
• Telephone answering machine
• Computer (including a printer)
• Fax (possibly via your computer)
• Photocopier - you may be able to use a local copy shop, or use your fax machine.
• Desk
• Meeting place
• Filing space
• Software

It is easy to underestimate the amount of space needed. Collating reports, receiving correspondence, managing projects for different clients at the same time - all will create a great deal of paperwork. Your own growing professional library of books, leaflets and journals will create an additional need for space and for suitable storage and filing. In addition you will need to keep correspondence and financial records to ensure that you can meet any accountancy needs. Remember that clients who re-employ you may expect you to have retained details from their previous contracts. Older materials can be stored in an attic or garage or anywhere that is relatively accessible and environmentally suitable. Ultimately you will need to develop a policy for weeding out material that is no longer required

BEING IN BUSINESS

The business world can be highly pressurised and competitive. Have you the energy to meet those demands? Deadlines are crucial and organisations will expect similar quality standards from you, as an individual freelance worker, as they are offered by larger and well-established organisations.

It is essential to have specialist expertise (preferably in more than one area) but this in itself will not make you successful. You may currently be in great demand as a speaker, trainer or adviser but this does not mean that you will have the same demand when people have to PAY for your time. Consider carefully what you have to offer and the market for it.

THE MARKET

To identify potential clients, you must consider your own professional background and expertise as well as your target organisations' information needs.

Some offers of work may arise out of personal and social contacts or from the privatisation or outsourcing of your current information service. If you have no contacts to follow up, it is still possible to attract work. Visit the largest local public reference library - many authorities now have specialist business collections and services - and check company directories for addresses. Also check local professional lists of solicitors, estate agents and architects' practices and other small businesses. Many small businesses have information management needs, but not the resources or capacity to manage this in-house. Directories of library and information resources could also be useful.

Decide how to approach the market. You could contact every firm in the country in your specialist area or concentrate on your own geographical area, regardless of specialism. Find out if the organisation already has an established information service whether at local or national level. Sources such as the Aslib Directory may include this information, or you may need to check this, when you have made contact with the firm. The existence of an information unit may not preclude your service - consultants are often employed on short-term contracts to carry out a specific task such as reclassification or the implementation of a new service.

It is important - and often difficult - to identify the most appropriate person within the company to whom your approach should be made. Telephone to ask, and then ensure your presentation enables this person to sell your service upwards within the company hierarchy. 'Cold calling' can be daunting at first. Be prepared for some rejections.

With experience, some of your good ideas may justify further research. The search for funding is not covered here but this may be a development that you can follow up.

HOW TO SELL YOURSELF

The basic message is GET YOURSELF KNOWN, as most work comes through personal contact and raising awareness of both yourself and your work.

• Be clear in your own mind what you are offering and be ready to explain it to others. Identify your key selling points
• Prepare an attractive and professional looking brochure to send out or give to people. Summarise this information on a business card.
• State clearly what you are offering - and how it differs from what others offer - and indicate your experience and capabilities. Be as concise as possible. Try to think of it all from the client's point of view. Many will be non-library markets who will be switched off by the use of library jargon.
• Prepare a press release, if possible with input from a marketing professional or journalist. This should be concise - no more than a side of A4 and jargon-free - and could be sent to local papers and relevant trade journals.
• Membership of CILIP will mean your name and contact details appear in the CILIP Yearbook.
• Involvement in the work of relevant groups or branches in CILIP is a good way of maintaining your profile within the library and information sector. It may offer valuable experience in areas such as event management.
• Register your details with relevant recruitment agencies. CILIP has its own recruitment agency - INFOmatch. Its Members Information Service can also provide a list of other agencies working in the library and information sector. Use NETWORKS. If you don't have an established network, BUILD one.
• Write articles for the press, for library journals and the trade press § Join local business groups, Chambers of Commerce and similar networks and volunteer to serve on committees
• Join professional organisations, such as CILIP, or the Institute of Management Consultancy
• Consider organisations you would not normally connect with § Offer to speak at local business clubs, Women's Institutes, Rotary and other organisations.

Remember that these activities, although vital for publicity, consume your most important resource - TIME. Periodically review the benefits of your involvement and make decisions to weed out activities and participation that bring the least reward.

GETTING WORK

Having attracted the attention of a potential client, you should then proceed in a professional way to confirm a contract. If the project has resulted from an idea of yours offered to several organisations, you may already have a clear idea of what needs to be done. Frequently it will be a request to resolve an organisation-specific problem or to organise an information collection that has "just grown". In any instance, a vital stage will be your preliminary discussion with the client. Find out as much background detail as possible to enable you to identify the actual (rather than the perceived) problem that needs solving. Then you can bid for the work on the basis of a firm proposal. You may need to tender in writing with a formal project proposal.

PROJECT PROPOSALS

Plainly put, your proposal should describe what you are going to do and how your client will benefit from this. The client will be looking for the person or firm with the best qualifications and most relevant experience for their project plus someone they can work with comfortably. Membership of a professional body such as CILIP or accreditation by, for example, the Institute of Management Consultants may be a significant factor in the client's choice.

Try to cover the following in your proposal, no matter how briefly:

• An introduction describing the background to the project, demonstrating your understanding of the problem and its context
• Methodology - preparation and planning, collecting information, options for the client to choose
• Resources needed
• Timetable for completing the project
• Brief contractual arrangements, specifying the resources required, security clearance if necessary and access to relevant documentation and people.
• Your experience and those of people who will be working with you. Offer references or refer them to previous satisfied clients.
• A confidentiality clause to safeguard both parties

FINANCE

Be precise about finances - especially whilst setting up. Work out answers to the following questions:

• How much do you need to live on per month?
• What is your financial break-even point?
• How much do you need to earn a profit?
• How much should you reserve to meet an annual tax bill?

Build into your calculations the cost of items usually supplied by an employer but which you will now need to pay for- training, sick leave, stationery needs, access to a range of databases, IT support, other bought-in expertise such as accountants or printers. You will need sufficient funds to finance yourself for at least six months without an income.

Weigh up the advantages of opening a small business bank account rather than passing your professional fees through your personal bank account.

WHAT TO CHARGE?

Be flexible about charges. It is all too easy to price yourself out of the market. Charge different rates for different things and possibly to different clients. It may be more advantageous getting a client on to your books than always charging higher rates. Be considerate in not undercutting fellow professionals. Although you may get a contract by charging very low rates, this will not help you earn a living in the long run.

When working out rates, take into consideration the following: § Using your home as an office incurs additional fuel costs.

• Paying your own Insurance, VAT, tax, pension arrangements and fees for your professional advisers.
• Allowing time for writing up detailed accounting records and completing tax returns.
• Cost of using your own telephone or email system.
• Paying for photocopying, clerical support or buying your own equipment.
• If you offer online services, hardware and software maintenance and telephone costs must be calculated as well as subscriptions and search charges.
• Time and travel costs in seeking sources of information or carrying out interviews.
• Paying your own fees for conferences or training.
• Sometimes you may be sick - allow for it.
• You will need to take holidays.

All these are hidden costs if you work for someone else. They are very real costs if you are working for yourself and their value must be considered when calculating a fee. One straightforward method is to take a realistic current salary and using that, calculate a weekly, daily and hourly rate. Remember that out of the 365 days, there are 104 days accounted for by weekends. Add in Bank Holidays and other holidays and this leaves about 220 working days.

However not all these 220 days are earning days, since there has to be a considerable amount of time set aside for business development and administration, course and conference attendance plus your own professional development. Hence the number of earning days can vary between 150 and 200 per year.

Charges are broadly based on your qualifications and experience, plus market forces. Where appropriate, use your previous salary to work out a daily rate. The following example is based on 180 working days per year.

A salary of £30,000 equals £166 per day. To take account of all the overheads discussed above, double these figures. £166 becomes £332 per day or £47 per hour based on a 7-hour day.

Having arrived at an appropriate figure, you can then make adjustments according to the market and the length of the contract. A short exercise of two or three days could be charged at a higher daily rate than a contract of several weeks or a regular weekly commitment.

With all these calculations, bear in mind that many organisations either cannot or will not be prepared to pay the sort of fees that an established firm of consultants would command to an individual freelance information professional.

Do allow yourself at least two years to really get established and build up your client base. Initially, much time and outlay will be spent on trying to obtain work. Many organisations take a long while to respond - some unfortunately also take a long while to pay their bills.

OTHER FINANCIAL CONSIDERATIONS

Agree a contract with your client covering your fee and all other matters. This should cover how you are going to be paid - weekly, monthly, in other stages or on completion. Decide on a timescale for invoicing and providing statements. In addition to your actual fee, determine the entitlement to expenses such as overnight stays, travel, and meals. Expenses should be spelt out - rate per mile for a car, itemised telephone calls. Is there a limit? Is prior approval required? Remember that even if the client doesn't pay on time, you will still have regular expenses to meet, and possibly some special ones in connection with client work. With long contracts, consider asking for interim payments. You will need to review your charges each year.

In practice you may find that organisations that regularly use freelance workers have highly detailed standard forms of contract. You may wish to draft your own standard form, although for some projects an exchange of letters will suffice. Invoices should include your terms, including any penalties for late payment. Make clear your VAT status and give your number if you are registered.

VALUE ADDED TAX (VAT)

VAT is collected on business transactions and imports and you will need to decide whether to register for VAT. If your annual turnover is low, you will not need to register. However some freelance workers feel that being registered - and quoting this in their publicity - gives them added credibility. Other more tangible benefits include being able to recoup your expenditure on some goods and services that you use in your business - the VAT element of your business telephone bill for example. Take advice before making your decision.

TAX

Even if you employ an accountant, the responsibility for complying with all tax rules and regulations lies with you. It is therefore important to understand how the tax system works, and the responsibilities it places on you. With the present system of self-assessment, it is necessary to keep accurate records and relevant documents, so that you can back up the information on your tax return. Self-employed people must retain these for five years after the date of sending back their tax return. Invest in a straightforward bookkeeping package, so that records are organised and accurate from the start.

Tax rules and allowances change regularly and it will be necessary for you to contact your tax office for authoritative guidance. The Inland Revenue has a useful website www.inlandrevenue.gov.uk. It also produces a helpful leaflet for those starting up in business, which includes guidance on income tax, VAT and National Insurance contributions.

The Inland Revenue and the Department of Social Security may examine people who claim to be self-employed, and the companies that pay such individuals. One major criterion used to assess whether an individual is genuinely self-employed is demonstrable financial independence from the possible employer. This is best demonstrated by having several clients for whom you act or provide services. Another indicator is the amount of control the company has over you. If YOU decide where you work, what you do, when and how you do it, you are more likely to be accepted as genuinely self-employed.

DATA PROTECTION

The Data Protection Act 1998 requires that the processing and retention of personal information held on any electronic data storing equipment, such as computers or databases, be handled in accordance with the Act. Data must be:

• fairly and lawfully processed;
• processed for limited purposes;
• adequate, relevant and not excessive;
• accurate;
• not kept longer than necessary;
• processed in accordance with the data subject's rights;
• secure;
• not transferred to countries without adequate protection.

Contact the Data Protection Agency to establish how this will affect your working practices.
Information line: 01625 545745
Email: mail@dataprotection.gov.uk
Website: www.dataprotection.gov.uk

PROFESSIONAL INDEMNITY

As yet there is no record of a library and information professional being sued on the grounds that their work caused loss or damage to their client. The best defence against such claims is to pay attention to your own professional development and keep yourself up to date. However as a sole practitioner, you would be personally liable for negligence, if proven, whatever the legal form of your company. This form of insurance is therefore recommended, particularly if you are giving advice that could result in financial loss to your client. Clear and reasonable disclaimers are also helpful, for example stating that you have no liability for errors in published sources. Pay attention to deadlines and keep records - ideally for six years.

CODE OF PRACTICE

As a member of CILIP, you can quote your adherence to the Professional Code of Conduct in paperwork to potential clients.

CONTINUING PROFESSIONAL DEVELOPMENT

As an information professional, you may have expertise to offer in a particular field or may wish to maintain your marketability across a range of sectors. In either case, you will need to ensure that the skills and competencies you have to offer are as up to date as possible (see CILIP's Professional Code of Conduct).

Achieving academic and professional qualifications should be considered the starting point for an on going programme of Continuing Professional Development throughout your career. Maintaining a portfolio of skills, competencies and experiences will enable you to offer evidence of your professionalism and previous successes to potential employers. CILIP offers both the Framework for Continuing Professional Development and the Turning Points Toolkit, which will assist you in assessing both your current competencies and establishing your future training needs.

CILIP runs a regular programme of specialised library and information short courses, detailed in its training directory and in its monthly members' magazine Update.

Other publications that are useful for current awareness include the Bookseller, Information World Review, Managing Information, the Times Higher Education Supplement, the Times Educational Supplement, IFLA Journal, Information Development, Knowledge Management and the Journal of Librarianship and Information Science as well as more general titles covering the areas of literature and ICT. These are all available to view at CILIP's Members' Information Service.

Further guidance on Continuing Professional Development can be obtained from CILIP's Membership, Careers and Qualifications and Training and Development Departments.

PROFESSIONAL ADVICE

The Inland Revenue and other relevant government departments offer free advice but it is still worth considering whether to use professional services such as accountants and lawyers. Using other people's expertise can save you time, effort and, ultimately, money. Most professional advisers will give you a cost-free preliminary interview to explain their services, and give you a quote.

SOURCES OF SUPPORT

In addition to finance available through commercial organisations, such as banks, government help may be available. The Loan Guarantee Scheme, for example, is designed to help new and established small businesses that have failed to get a conventional loan.

Some geographical areas may be designated Assisted Areas or covered by Single Regeneration Budget programmes, which may offer additional opportunities for small businesses.

Local authorities may provide help to new businesses, ranging from grants or premises, to advice on loans. Contact their Economic Development Unit.

The organisations listed below provide a single source of information and advice for small businesses. They are country specific and are made up of a partnership of local agencies in that region.

England

Business Link
Tel: 08456 045678
Website: www.businesslink.gov.uk

Scotland - Lowlands

Business Gateway
Tel: 0845 609 6611
Website: www.bgateway.com

Scotland - Highlands

Highlands and Islands Enterprise Business Information Source
Tel: 01463 715 400
Website: www.hie.co.uk

Northern Ireland

Invest Northern Ireland
Tel: +44 028 9023 9090
Website: www.investni.com

Wales

Business Connect
Tel: 08457 96 97 98
Website: www.businessconnect.org.uk

Chambers of Commerce

A local Chamber of Commerce or business club may be useful for advice and information and as a good source for contacts. You may be able to offer your services to new business ventures in your area.
For further information on your local Chamber visit www.britishchambers.org.uk

FURTHER INFORMATION

There is a huge range of publications giving information and guidance on starting your own business and working for yourself. Larger public libraries will stock a representative sample.

Particularly useful is:
Croner's Reference Book for the Self-Employed and Smaller Business
A regularly updated loose-leaf reference book, it covers taxation, VAT, National Insurance, company and consumer law. This should be available in any major reference library.

The following publications are helpful in determining existing library and information provision:

Aslib Directory of Information Resources in the United Kingdom
Current edition

The Libraries Directory: a guide to the Libraries and Archives of the United Kingdom and Ireland 1998-2000 edited by Iain Walker

James Clarke and Co Ltd 2001. 0 227 679563

Libraries in the United Kingdom and the Republic of Ireland
Facet Publishing. Current edition

Much useful information can be found on the Internet. A brief list of sources for information, guidance and training is given below.

Some sources are contactable only via their web site

Department of Trade and Industry
Tel: 020 7215 5000
Textphone: 020 7215 6740
Website: www.dti.gov.uk

Enterprise Agencies
Website: www.smallbusinessadvice.org.uk

Federation of Small Businesses
Tel: 01253 33600
Website: www.fsb.org.uk

Inland Revenue
Website: www.inlandrevenue.gov.uk

Institute of Management Consultancy
Tel: 020 7566 5220
Website: www.imc.co.uk

Learndirect
Website: www.learndirect-business.co.uk

Small Business Service
For details of the organisation:
Tel: 0114 259 7788
Website: www.sbs.gov.uk
For business information and advice:
Website: www.businesslink.org.uk

UKOnline
Website: www.ukonlineforbusiness.gov.uk

Women in Business
Website: www.womeninbusiness.co.uk