Handing in your resignation letter to your employer and going freelance can be the most liberating feeling in the world – as long as you’ve carefully analysed whether freelancing is the right career move for you. Nobody wants to go crawling back to their boss, asking to be re-employed.
If you are thinking of joining the 4.7 million self-employed people in the U.K, ask yourself these questions before committing to the freelance lifestyle.
1. Am I doing this for the right reasons?
Going freelance isn’t a decision that should be taken lightly. If you’re choosing to enter the world of self-employment because you hate your boss or you feel unhappy in your current work situation, stop and think about whether you’re going freelance for the right reasons.
There are many good reasons for going freelance, for example to be your own boss, to ditch the commute and spend more time with your family, or simply to have greater flexibility in your life. Honestly reflect on your true reasons for wanting to become a freelancer and make sure they’re valid.
2. Can I meet deadlines?
Freelancing is a time when your organisational muscles will be flexed. You’ll need to be able to actively manage and hit a range of deadlines for a variety of projects, alongside keeping a firm grip on your bookkeeping, and finding new work.
Consider carefully the amount of time you’ll be able to invest into your freelance career. Will you be able to meet deadlines and file copy or projects on time alongside all the other admin that freelancing takes? The last thing you’ll want to do is set off on a bad note with clients by not making their timeframes.
3. Can I find work?
Finding work when you’re a freelancer is imperative to your success. Without work there’s no steady income and without any steady income you’ll find yourself struggling financially. Think about whether you have the right mindset to actively find work. Are you self-motivated and disciplined? Do you find talking to other people a doddle? There’s a great range of freelance job sites available if you’re starting out. We also recommend attending networking events to grow your business and to meet prospective clients.
4. Will going freelance fit in with my lifestyle?
Freelancing can mean different schedules for different people. Some get their work done when the kids are asleep in the evening, some are up at the crack of dawn putting in a few hours of business before anyone else is awake. Whatever your lifestyle, make sure freelancing can fit in with how you operate and work.
5. Can I afford it?
The startup costs of launching your own business can vary greatly depending on what type of industry you’re in. For example if you were a looking to start a freelance photography business, your upfront costs for the latest equipment may be higher than that of say, an editor or journalist.
It’s worth adding up how much you think your initial outgoings will be and think carefully about whether you can afford to go freelance.
6. Can I go without earning any money?
Whilst it may be true that freelancers earn more than employees, freelancing is still a big financial risk because there’s no guaranteed income, holiday pay, or sick pay. Some months might be more flush than others, and in your months where you’re not earning much, will you be okay with that? We recommend having some savings in the bank before going freelance, so in the leaner months you’re able to keep yourself afloat by paying bills, rent, etc.
7. Do I need insurance?
You protect your car, house, assets, or holidays – why not your business? Having the right type of business insurance can save you heartache and money in the long run, should anything go wrong. You may also be legally required to have certain insurance cover in place before you start work.
8. Will I be eligible for a mortgage?
Getting a mortgage should be a time to celebrate and rejoice in the fact you’re now a homeowner. However, when you’re self-employed the road to house-ownership is slightly more complex than that of a regular employed person.
Depending on your business model (sole trader, partnership or limited company) you’ll need to have a minimum of one year’s finalised accounts, or a SA302 form from HMRC that is dated less than 18 months old. If you’re contracting at the time you apply for a mortgage, it’s likely you’ll also need to prove you have 12 months of experience and at least six months remaining on your current working contract.