Over the past decade, the number of people registered as self-employed has risen by 25% to over 4.6 million. And you’re now one more of them. Welcome to the world of freelancing!
Taking the leap into being a freelancer can seem like gigantic step into the unknown. Yet with some careful planning and thought, freelancing can be a successful and fulfilling career. Starting out might seem scary at first, but getting your head around the basics early on can work wonders in the long run.
Sole Trader or Limited Company?
A sole trader is in charge of every element of their business, including bookkeeping, invoicing, and cashflow. They answer to nobody except themselves and have free reign over any business decisions.
The major downside of being a sole trader is that both your business and personal finances are rolled into one. If your business plummets into debt and ruin, so do you.
If you’d rather keep a clear distinction between your personal and business finances, consider forming a limited company. A limited company operates as a completely separate entity from your personal finances.
Limited companies can be much more tax efficient, but they also bring with them more complex reporting requirements. Finding an accountancy service that suits you is therefore key – they’ll be able to advise what’s best for you.
Many freelancers prefer to start out as a sole trader and allow themselves time to get their head around other aspects of freelancing, such as finding clients and knowing what expenses to claim, and then move on to forming a company when business is going well.
Getting your first client
Obtaining your first batch of clients is a big step in any freelancer’s career. A great way to make sure you hit the ground running is simply to get your name out there. Attend meet-ups, go to networking events, and make sure you have your elevator pitch perfected.
Put some shout outs to your social circle. Chances are someone will have a friend of a friend that needs a writer, photographer, IT consultant, or whatever your specialisation is. It doesn’t hurt to ask your pals and peers – what are friends for, anyway?
Freelance job boards are also a terrific source of new work. Spend an afternoon sniffing out some tasty looking gigs and hopefully someone will bite.
Have an online presence
Knowing how to market yourself online is an important tool in the freelancer’s box. Depending on your line of work, think about creating social media accounts on the most popular platforms, such as Facebook, Twitter, Instagram, Snapchat, and LinkedIn.
Curate your social media presence wisely. If you’re a freelancer who specialises in food photography, sign up to Instagram and Pinterest, but perhaps give YouTube and LinkedIn a miss.
Put the time in and figure out how to build a business website – even if you’re a one person show. Having your own website looks professional and can be an easy way for clients to find you online, providing you’ve adhered to some search engine optimisation.
A business might suss out that you’re new to the freelancing game and set out to exploit you. A tactic of getting freelancers to work for free is by offering them exposure. In other words, you work and the company doesn’t pay you. Should you do this? We’d recommend not.
If a business doesn’t value your skill set, talent, creativity, and freelancing awesomeness, they’re not worthy of having you work for them. Freelancing should always be a paid gig. Don’t be afraid to send a polite email explaining you don’t undertake unpaid work to any business. You’ll come across as professional and maintain some dignity.
If a business genuinely can’t afford to pay you in cash, can they pay you in another way? You could negotiate a skills trade, for example exchanging your work for them building you a website or giving you a free photo session. Bartering and negotiating are valuable skills to practice when it comes to freelancing.
You’ve landed your first client and completed the work on time. Hurrah! It’s recommended that you send your invoice the day that works have been completed. Waiting until the end of the month or when the client would like you to invoice holds back your credit control and cashflow.
If you complete a project for a client at the start of the month and wait until the last day of the month to invoice them, you could be waiting yet another month for your cheque to come through. For a new freelancer, that’s important cash that will be better off paying your self-employed mortgage or putting food on the table.
If you’ve a client who isn’t paying up, grab one of our late payment reminder templates to get things moving. And if that doesn’t work, you can always enlist the help of a professional debt collection service.
Is now the time for you?
If you reckon it’s time for a career change and are considering setting up your own business, visit our #GetStarted homepage for free resources and advice on how to make it happen.