I’ve been a freelancer for a number of years and freelancing has certainly been an adventure. I was thrust into it after being made redundant and it was, without doubt, the best thing that could have happened to me – although it didn’t feel like that at the time.
Over the years I’ve worked with some fabulous clients, collaborated with amazing freelance peers (who I otherwise would not have had the opportunity to work with) and worked on some exciting campaigns. Oh, and did I tell you that I also increased my income by 35%?
More and more people seem to be taking the plunge into the freelancing world, whether by choice or not, so I thought I’d share some tips that I’ve learnt on my journey.
Get an accountant
I am not good at accountancy and that’s fine because I’m not an accountant. I can’t keep on top of all the HMRC updates or know what I can claim and what I can’t. Plus I’m busy trying to find clients, work to deadlines and build my brand – I don’t have time to try and be an accountant too.
Before becoming a limited company, I would keep a simple spreadsheet with a tab for each month, where I recorded my income and any business-related expenses. I then sent this to my accountant to compile my tax return. And I never needed to remember any deadlines because they always gave me lots of warning.
Since moving from a Sole Trader to a Limited Company, I now use FreeAgent to send my invoices out. I bank with HSBC Business Banking and can upload my bank statements to reconcile my income and expenditure within FreeAgent. Again, my accountants keep me informed of when to pay my self assessment tax and corporate tax, and how much I owe.
Prior to getting started in the world of freelancing, you should speak with an accountant about whether to set up as a sole trader or a limited company. Believe me, it’s complex so seek professional advice. Also, ask for accountant recommendations from your fellow freelancers so that you choose one wisely.
Set up a business bank account
Don’t make things more complicated than they should be. The simplest way to manage your finances is to separate your personal life from your work life with a business bank account. Only use your business account for work-related expenses, direct debits and for receiving payments. This helps you see at a glance your in-comings and outgoings. Transfer money to your personal account as a salary. It makes life for your accountant much easier too!
Put aside 30% of each paid invoice
This was the best advice my accountant gave me when I started out. Whether you are a sole trader or a limited company, you will have to pay tax at a certain time of the year and you will face late penalty fines if you do not pay on time. DON’T GET CAUGHT SHORT. Make sure you always have the money for your tax by setting aside 30% of each payment you receive. This way there will be no nasty surprises. It will also force you to budget and live within your means. And, 30% is more than your tax so you’ll have a lovely little bonus after you’ve paid HMRC. Although, don’t forget that you also need to pay some of the next year’s tax upfront, which is called payment on account so factor that in too.
Build your brand
For most freelancers, it’s essential to have a portfolio of work to be able to show potential clients. But this doesn’t need to be a traditional portfolio. Be your own PR! Write guest posts on relevant publications or even your own LinkedIn blog posts to showcase your expertise. If you have a personal blog, this is perfect for showing off your writing skills, web skills, photography skills as well as your marketing skills – as no doubt you’re seeding your posts on social media. I have built up a profile for myself within my sector through having digital proof points of my work. This is easy to then show to prospective clients.
It is about who you know
Around 95% of my work comes from people in my network, either from them directly or via them. It really does pay to network so make sure you keep in touch with ex-colleagues, attend events, seminars or conferences whenever you can as well as join relevant freelancing Facebook groups. Once you’ve completed a job, ask for a LinkedIn recommendation from your client. These really do go a long way as you’ll be surprised to see how many connections you have in common and, of course, word of mouth is always the best marketing.
Know your worth
It is natural when you start out to not really know how much to charge a client but do a bit of research on day rates in your sector. There are lots of places you can find this information and you can always just ask in a relevant Facebook group – there are lots of people happy to share their day rate. The Freelance Lifestyle Facebook Community is a great place to start.
It’s tempting to want to drop your day rate from time to time but I really advise against this. Be confident in your ability, your skills and expertise and charge what you are worth. Plus, you’re not doing your fellow freelancers any favours by under-charging.
Remember that, as a freelancer, you don’t get paid sick leave or paid holiday so this needs to be reflected and accounted for in your day rate.
Work in-house from time to time
Personally, I think it’s imperative to work in-house from time to time for a number of reasons. The first is because it can become easy to forget what it’s like working in an actual office. By working in your client’s office, as part of the team, you will be closer to the project and you’ll gain insight into other factors at play – such as their processes, work flows or even office politics. Plus, having company is a good thing if you’re used to working from home. Believe me, freelancing can be lonely!
It’s ok to say ‘no’
When you start out as a freelancer it’s tempting to just say ‘yes’ to everything that comes your way. You’ve got bills to pay, right? That’s fine (in the beginning). Once you’ve established a client base and also worked out what type of work (or which type of clients you want to work with), you must get better at saying ‘no’ when an opportunity comes along that simply isn’t the right fit. Believe me, you’ll be happier for it.
Manage your time wisely
The beauty with freelancing is the flexibility it offers. Need to meet someone at 3 pm for a coffee? Not a problem. There’s no boss wondering where you are, how long you’re going to be, why you’re out of the office etc. The real problem is, it can be very difficult to just work 9 to 5 because it’s so easy to try to fit in extra work or procrastinate in getting things done because you know you can do it at 9 pm if you must. THIS IS NOT HEALTHY. Do not take on more than you can actually do without reaching breaking point.
Embrace the quiet times
All freelancers will tell you that freelancing has peaks and troughs. It’s completely normal to go through some quiet periods and it can be worrying if you have bills to pay. If you’ve been charging an appropriate day rate (remember, with a day rate you need to factor in sick and holiday pay) and you’ve had steady work then you should be ok when a quiet period hits.
Take this time to refresh your website, write some blog posts to market yourself and also reach out to ex-clients to see if there is anything you can help them with. Look for speaking opportunities or guest post opportunities to help boost your brand. Whatever you do, don’t stress too much – believe me, the work will come!