How to become a freelancer
Being your own boss is a dream for many people.
Pursuing your passion and starting your own business can give you control over your life enabling you to work flexibly and establish a healthier work/life balance.
But one of the biggest obstacles to going freelance is overcoming the fear of the unknown. Afterall, you’ll be giving up a steady job and all the benefits that come with it.
Gone are the regular salary, pension scheme and other benefits such as private healthcare and gym membership, not to mention your colleagues and the office banter.
However, if you’ve decided to take the plunge and want to join the UK’s 4 million self-employed then this comprehensive guide to what can be an incredibly exciting – and nerve-racking – journey will help.
Have I Got A Business Or Skill To Sell?
The first thing you need to do before you take the plunge into the world of freelance work is carry out some research.
You don’t have to be reinventing the wheel to start your own business, but ensuring there’s a market for what you’re offering is essential.
Equally, taking a close look at your competition is vitally important. If you’re entering a crowded space where competition is fierce you might need a unique selling point to stand out. Either that or the confidence that you can do things better!
Can I afford To Be Self-Employed?
Building up your own business can take time, and the bills won’t pay themselves.
It might be a while before any money comes in so do your sums and ensure you can afford to support yourself while you establish your business. Having at least six months’ worth of living costs stashed away is a good starting point.
Remember, there’ll be no sick pay, paid holidays or company pension contributions (aside from any arrangements you set up for yourself). And your income is likely to be sporadic to start with.
If you need to find inspiration for how to cut costs, check out this post featuring 50 ways to save money.
How Do I Attract Clients?
This is probably the hardest part about establishing your business.
When you’re working for a company you have its reputation, network and advertising spend to rely on. But when it’s just you in your kitchen with a laptop things are a lot tougher.
When you first start out as a freelancer you’ll probably spend the majority of your time alternating between hustling for business and worrying about where the next client – and payday – is going to come from. Don’t underestimate how hard this can be!
Using your network of colleagues and friends is a great place to start building a list of potential clients, and a few shout-outs on social media can also help.
You can also send spec emails to companies who you think will benefit from your services, but make sure you contact the right person, rather than just sending an email to a generic contact@ address.
Starting a blog and writing informative content is another great way to build your reputation. It will give you some great material to promote, which will hopefully be shared by others and generate new leads.
Once you’re established in the market with a good reputation you can start to encourage clients to give you referrals – the cornerstone of any successful business.
Register For Tax
Make this one of the first jobs you do after setting up on your own. However, you’ve chosen to establish your business – either as a sole trader or limited company – you’ll lead to let HMRC know.
Late Payments
So, you’ve won a few clients, carried out the work to a high standard and everyone’s happy.
You ping off an invoice confident that it’ll be paid on time and relieved that you’ll be able to eat more than baked beans for the next few weeks. Then nothing happens.
The invoice due date comes and goes but there’s still radio silence. Congratulations, you’ve just been initiated into the world of being self-employed!
Speak to any freelancer and they’ll have a tale to tell about late payments or people who haven’t paid at all.
Chasing invoices saps your time and energy and ultimately late payments can cost you your business if you’re not adequately prepared.
Make sure you have a contingency fund to cover any unexpected wobbles, and be prepared to have some tough conversations when it comes to chasing payment.
This blasé attitude that many companies have when it comes to paying freelancers on time is a scandal which needs addressing by the Government.
Do I Need An Online Presence?
Yes, this is absolutely essential. Choose the social channels that most closely align with your business and consider setting up a website to showcase you and your work.
These days, anyone who’s considering buying a service does their research online and having an active presence gives people greater confidence in doing business with you.
If your list of happy clients is growing, ask them to leave you reviews on sites such as Google. You can also request testimonials that you can post on your website for prospective clients to read.
Where Will I Be Based?
The thought of rolling out of bed and heading downstairs to the kitchen table without the daily grind of a commute is appealing to many, but it has its drawbacks as well.
You might be keeping your overheads down, but working from home can be lonely and isolating.
Yes, it will save you money and this is especially important at the start of your enterprise, but as your business grows it’s worth considering taking an office, or at least a desk in a co-working space.
You’ll feel more professional when you’re getting up and going out to ‘the office’, there’ll be less distractions and you’ll be surrounded by other people in a similar situation to you.
Co-working spaces can be great sources of contacts as well and are relatively cheap to rent.
Can I Motivate Myself?
Having the drive to push forward a business on your own can be tough so you need to be sure you’re able to motivate yourself. Afterall, only you can make your business a success!
When you’re working from home it’s easy to procrastinate and become distracted, whether it be with mundane chores or the cute family pet.
You’ll need the resolve to knuckle down, even when you’ve got a mountain of chores that you want to get done.
Juggling small children with a home business is nigh on impossible as well, especially if your work involves talking to clients on the phone, or online meetings.
That said, if your young ones are at school or nursery, freelancing can be incredibly empowering and enable you to work flexibly around their schedules.
Our How to Work From Home With A Toddler Article delves into this topic further.
Bookkeeping
Whether you’ve established yourself as a sole trader or a limited company, you’ll need to keep accounts and pay tax.
If you’re a sole trader and your business affairs are straightforward there’s really no need to pay for an accountant, other than to save a few hours of your time at the end of each year.
Filing a self-assessment may seem daunting, but the reality for most people is very different. If you’ve kept an accurate record of your invoices and expenses, there’s really no reason not to file your return yourself.
However, if you’ve set up as a limited company things are a lot more complicated and the filing requirements are far more stringent and complex.
In this scenario it’s worth hiring an accountant to give you peace of mind and preserve your sanity!
There are a few things you can do to make your life easier when it comes to tax time:
- Keep a careful note of your expenses
- Keep all your receipts
- Keep an ordered copy of all your invoices and when they were paid
- Set aside money every month to cover your anticipated bill. Exactly how much depends on your earnings, but about 30% of your profits is about right for most people.
- Ensure you complete your tax return by the deadline to avoid a fine
It’s not uncommon for those who are self-employed to move their tax money into a separate account where they can earn some interest until the bill is due.
Another option is buying Premium Bonds over the course of the year then cashing them in when you have to pay HMRC.
Try Before You Commit
One final thing to consider before you hand your notice in is whether it’s possible for you to dip your toes into the world of freelancing while keeping your current job.
Working in the evening and at weekends may give you a feel for how successful your enterprise is likely to be while maintaining the security of a steady salary.
It may even be possible to reduce your hours with your current employer while you give freelancing a try.
Adam Smith is the director of Topline PR, a boutique public relations agency servicing an eclectic range of clients. He’s a former newspaper editor with 20 years of experience working in the media and PR. He also holds a Diploma in Financial Advice (DipFA) with the London Institute of Banking and Finance.
