There’s a growing band of professionals who are doing it for themselves but fear they are totally ignored and without a voice. They are in the vanguard of the new way of working, able to work how they want, when they want, combining flexibility with efficiency. They are the growing mass of self-employed professionals, those accountants, consultants and marketing advisers who have decided to go it alone and run their business in a way that suits them, not some large, faceless corporation. But until now, scant regard has been given to this sector of the economy. There are of course many profession-specific organisations that claim to cater for their self-employed members. But it is not just a particular profession that can bind together groups of workers – self-employed professionals face similar issues irrespective of whether they are architects, natural remedy specialists, or accountants. According to a recent survey, 69% of self-employed professionals received little or no support for their business from banks and other financial institutions, and three quarters felt they had no support from the government. But despite this apparent feeling of being left to sink or swim, 86% believed working for themselves was more enjoyable than working for someone else. The survey was carried out by MORI on behalf of Alodis, an organisation set up earlier this year specifically to cater for the needs of self-employed professionals. The report revealed the lack of support available from a range of institutions, who simply see this group in terms of ‘small’ small businesses. According to Alodis – whose name is derived from ‘allodium’, meaning a freehold estate which is the absolute property of the owner – these institutions are unable to support or communicate with the self-employed professional class. Banks in particular are singled out for criticism. ‘When starting out, a professional will turn to his or her bank manager, but end up being sold services that they might not want and might not be appropriate,’ says Julia Hutchison, the glamorous founder of Alodis. They are one of the most affluent sectors of the working population, with a combined turnover of some #65bn, but you still can’t get a mortgage without three years of accounts.’ Hutchison, whose background is in media and marketing, delights in telling how one member of Alodis went to his bank for a #5,000 loan but was refused. ‘If he had been a small business and had asked for #0.5m, the bank would probably have said yes,’ she says. Yet ironically, it is this sector that is most likely to be switched on to sophisticated financial investments. ‘You still can’t get a mortgage without three years of accounts. But even if you are employed you haven’t got a job for life – most people are on one month’s notice and there is little difference in terms of security,’ argues Hutchison. A significant number of accountants – over 5,000 at the last count – have signed up with Alodis, perhaps suggesting, rightly or wrongly, they receive little support from their institutes. Both ACCA and the ICAEW provide plenty of services for small practices or sole practitioners but not necessarily for the self-employed accountant. Some of the facilities provided by ACCA, such as its Business Navigator website, are certainly of use to the self-employed accountant but there is clearly a feeling that such organisations do not provide a voice specifically for the self-employed. The MORI/Alodis survey revealed the belief among these self-employed that they need a collective voice to lobby the government on key issues, such as late payment. ‘We’ve started lobbying government over late payment and Patricia Hewitt is interested in talking to us on a co-operative level,’ says Hutchison. The Late Payment Act 1998 may have gone some way to helping the situation where if a company is late in paying a self-employed consultant – effectively withholding his wage – the consultant is entitled to charge interest. But research has shown that of those who had heard of the Act, only one in five would pursue such a course. Such action can put a strain on the client relationship. ‘Interest sometimes isn’t even paid when it’s asked for,’ says Hutchison. Alodis calculates there are at least 1.6 million self-employed professionals currently working in the UK, contributing #65bn to the economy. The government has estimated that this number is set to double by 2010, taking it to over 10% of the working population – clearly a sizeable, yet disparate, constituency. Alodis is convinced that this sector can no longer be ignored, and must be taken seriously by government, the banks and accountants. Hutchison is keen to dispel the myth that the self-employed have to work for themselves because no one else wants them to work for them. ‘These professionals are concerned about their status and disagree with the idea that because I’m self-employed everybody thinks I’m lazy or that you are self-employed because you can’t get a job,’ she says. ‘But that’s just not the case.’ According to its research, Alodis has found that accountants, as well as making up a significant percentage of this sector, are often seen as the most helpful to these same people. Someone starting out on their own is likely to turn to an accountant to take care of their tax affairs. But often it does not stop there. Once they have found their banks have not been as helpful as they had hoped, self-employed professionals will more than likely turn to their accountant for other advice. ‘At the end of the day, the person who was most help was the accountant,’ Hutchison says. ‘Often it is not apparent where to find information on areas such as government grants and tax incentives. This is where the accountant comes in.’ Alodis plans to bring together accountants with other professionals so that they can swap services in a virtual pro bono way. An accountant can do the books for a marketing specialist, who in return can assist with promoting the accountant. This ‘virtual team’ approach could prove to be a very powerful proposition – if they can work with each other, there is no reason why they could not team up and offer a combined service for clients. The key to such a successful relationship would lie in the networking facilities offered by organisations such as Alodis. Through its website and meetings, like-minded people will be able to get together – something that is never easy when you are working on your own. Such events will help to generate a community and give a focus to the organisation’s activities. So why would anyone want to become self-employed in the face of such difficulties? According to the MORI survey, seven out of ten became self-employed because they could not stand office politics, and nearly eight out of ten felt they had a better quality of life since making the switch to independence. And most telling, 85% said they would take the same decision again. This would appear to reflect the breakdown of the ‘corporate promise’. As Hutchison says, many professionals are asking themselves: ‘Do I want to work all hours of the day to put money into someone else’s pocket?’ And as more people take the plunge and go solo, organisations like Alodis will be helping them put money into their own pockets. Alodis can be reached at www.alodis.com SUITS ME, SIR
After 16 years of running his own three-partner practice, Richard Murphy decided it was time to sell up and go it alone.
‘It is excellent, simply because of the flexibility it gives me – I am at home and I happen to like being at home,’ he enthuses. Murphy says it would not suit everybody: ‘You need to get up and be disciplined, but I can do that.’
The financial benefits are also a clear incentive for working alone.
‘When I was running a firm it took me until 2.30 in the afternoon before I had covered the overheads and started making money. ‘Now I’ve normally covered the overheads by 8.45 in the morning – everything I do after that is profit.’
Murphy, aged 46 and based in London, specialises in corporate finance and management consultancy work, essentially helping clients achieve their business goals.
On one day he could be writing a business structure plan in the morning, and interviewing for a financial director in the afternoon, with a good lunch in between. These days he does not do a great deal of standard tax and accountancy work – and he does not have any qualms about turning down work.
‘There’s no point in taking on work if it’s a drag – I can be selective in want I do.’
– Richard Murphy is a self-employed accountant. He sold his practice last year.