ESM0547 | Guide to determining status: opportunity to profit from sound management

A self-employed person often has the opportunity to profit from sound management of a task. Where the worker quotes a genuine fixed price for a job, then the level of profit or loss will depend on the speed and efficiency of the worker and the capacity to reduce overheads and organise work effectively. A workers income may be related to his or her efforts or to other factors and so may not be regular or constant. It may depend on how long he or she works and that in turn could depend on outside factors such as the weather.

For example, a company may engage a consultant to thoroughly review a business process and report to the board with acceptable suggestions for improvements or a whole new process. The consultant agrees a fee of £20,000 and that the report has to be completed within three months. There may also be penalty clauses within the contract. Clearly the consultant might be able to complete the report well within the three-month deadline.