Record numbers could turn self employed in 2010

Around 300,000 people are likely to take the plunge and turn self-employed in the UK this year, according to the Federation of Small Businesses.

Redundancies and shorter working terms are forcing workers to create their own businesses.

Mary Johnson-Evans has a business which is globally marketable

Figures show that in the East Midlands the number of people asking Business Link for help and support has more than doubled in three years - from 1,984 in 2007/08 to 4,595 in 2009/10

Sadly, figures also show that three out of five of those businesses are likely to fail within the first three years.

Murray Fairclough from the FSB told BBC Radio Derby: "There's never been a better time to set up on your own - technology allows you to have the internet as a distribution channel.

"But you've got to make sure you don't fall into the obvious traps - it's no good having great enthusiasm if you don't have a business plan.

"Or if you have a great design or a brand new product you need to patent it."

But even if your new business is service-based, you still need the right support. The FSB estimates that the average small business spends seven hours a month dealing with the tax man, tax issues, the VAT man and health and safety-related issues.

Case studies

Mary Johnson-Evans and Amanda Johnson each started their new businesses in the early part of 2010 and both run them from their homes.

Mary runs a property finding service for people wanting to move to Derbyshire. Her background was in property sales and so this was almost a natural extension for her. She got the relocation business idea after several calls from people asking her opinion about areas of Derbyshire, spotting a niche in the market.

But her business really took off when a friend wrote an article about her for a parish magazine: "The article was published online. Someone searched for Duffield on the internet and found me. They were relocating from Germany and that was my first client!"

So for Mary the internet has made her business marketable worldwide.

Amanda has a divorce coaching business.

Amanda Johnson's business stems from her background in family law

She guides people through divorce by helping them think through their options before the go to the solicitor, thus keeping the cost and turmoil of the process to a minimum.

Amanda's background is family law and counselling and she herself has been through a divorce. She runs her business on a part-time basis with most of her work being in the evenings and at weekends: "I decided I wanted to work with the more vulnerable and help them through the minefield.

Amanda's top tip for new businesses is to get a good accountant who will help keep the tax burden as low as possible.

Both Mary and Amanda said they found Business Link invaluable in getting started in self-employment - partly because of the courses they offered and partly because of the support they gave when they hit problems along the way.

And Amanda says other local, new enterprises have proved their worth in getting her started - via a local magazine she found another small business which helped her to set up a website for only £200.

The pair agree that staying motivated can sometimes be difficult - particularly given that there are no colleagues around.

Mary gets round this by trying to do most of her work during the school day: "You're so busy you don't have time to think about it... but there are times when you think 'I just need to bounce that off somebody'."

Amanda says: "You've got to have a real belief in your idea and have the confidence to do it.... you just know that when it kicks off it's really gonna kick off!"