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Freelancers can sometimes seem like a mythical beast to those working in full-time employment. From afar, they look great; they get to wear what they want, work from home and pick their own hours. On closer inspection though, life isn’t always quite so leisurely, and it’s certainly not the carefree walk in the park many assume it to be.
So, what is a freelancer?
Essentially, it’s someone who works for themselves. This means they don’t have your usual, run-of-the-mill employment contract with a company (although there are plenty of people who do freelance work in their spare time outside their normal job). This means a freelancer must go out and find work themselves. This can be done in a number of ways and, usually, an array of methods have to be employed. It can include networking events, word-of-mouth, job posting sites (see our article six freelance job sites that actually pay well) and the tried-and-true CV-spraying. Often, freelancers won’t know when their next job will be coming in – half the battle is constantly searching for new work.
Where does the term come from?
It was first coined in 1819 by Scottish writer Sir Walter Scott in his novel Ivanhoe. In Ivanhoe, Scott describes Italian and French mercenaries as “freelances”, meaning they were free men who offered their services (in this case, their skill with a lance) to wealthy landowners. They basically amounted to a private army, and would fight on their Lord’s behalf against groups loyal to other noblemen. Thankfully this element of freelancing has largely been abolished today.
The term “freelance” was recognised as a verb (he/she freelances) by the Oxford English Dictionary in 1903, and since then has passed into the everyday lexicon as a noun, adjective, and adverb.
Is a freelancer a businessperson? What do they do?
Freelancers come in different guises. Some may prefer to act as a sole trader, while others may opt to become a limited company. Both come with their own pros, cons and challenges.
All jobs vary in size as well, so it’s pretty common for a freelancer to be working on a number of projects at once. This also means they can have several different clients at the same time. A freelancer, therefore, has to be well-organised. This means keeping tabs on various conversations, deadlines and work in tandem. Without organisational skills, freelancers can really suffer.
What other responsibilities do they have?
In essence, the freelancer runs their own business, which brings a lot of extra work with it: administration, accounts, marketing, contracts, invoices and all the other stuff that your average worker doesn’t have to juggle alongside their actual job.
This is why the idea of the relaxing life of a freelancer is a myth. Not only do they have to do the job they’re trained in, they have to learn how to do all the other essentials – and find the time to do them all, of course.
In the end, a freelancer is someone who’s willing to take risks. Risks that involve putting the responsibility for their working life and career progression on themselves and doing all they can to make their rent at the end of the month.
It can be a tough life, but it can be incredibly rewarding as well. Either way, it’s certainly not for the faint-hearted.
How can you succeed as a creative freelancer?
There are many points to consider to become a successful freelancer, from how you deal with your clients to managing your accounting. We’ve provided a breakdown of all the areas you’ll need to plan for to become the best creative freelancer on the market.
Proper planning
Becoming self-employed 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: to be your own boss, to do something you really love, to ditch the commute and spend more time with your family, or simply to have greater flexibility in your life.
Slowly reducing your hours while you build up your freelance business is a great way to leave your job while minimising money worries. Every employee has the right to request more flexible working hours for any reason. This means – presuming your employer grants your request – you can dip your toes in the freelance waters while maintaining the safety net of a salary.
When you’re a freelancer, nobody else is responsible for your success. There isn’t any guidance, mentoring, or coaching from a superior and you certainly don’t receive any encouragement from teammates. You need to be able to motivate yourself – whether that’s forcing yourself out of bed at 7am every day (even though you know you could get away with staying there until 10am), or keeping yourself going even when things get tough.
You’ll need to push yourself out of your comfort zone to get new clients, so whether you hate speaking on the telephone, networking, or dressing up smart for a pitch, you’ll have to keep making yourself plug away at your business because you’re the single driving force that keeps it all going.
Selling yourself with an online portfolio
A great online portfolio can win you more work, promote your services, and set you apart from the competition. It’s also advisable to talk about what clients gain by working with you, and how your approach benefits them.
Once you’ve got enough work to show off, check out these tips on what makes a fantastic portfolio site; presenting your work in the right way to ensure it leads to enquiries:
Keep it Simple
It can be tempting to include every single job you’ve done on your portfolio, since
you want to show off your versatility and experience. However, no matter how engaging the content is, this can actually bore the viewer. It also gives more opportunity for the potential client to discover work of yours they don’t like! It’s best to stick to five to ten examples, making sure these are the ones you’re really proud to promote or that have previously had great feedback.
Ease of Access
You can’t be sure your prospective clients will view your portfolio on a huge glossy iMac screen - they may view it on a phone or tablet. You may find one platform displays your work perfectly, but is it accessible to the average user? Choosing how to display your work is crucial, and can make the difference between your work being loved or ignored. Alternatively, you could look at some of the options out there for web builders such as Squarespace or Wix.
Clear Calls-to-Action
Unless you include instructions and clear calls to action (CTA) in your portfolio site, your visitors aren’t going to know what they need to do next. For example something such as, “if you like this style or think your business could benefit from my design, please contact me on…” Your contact details should be easily available on every single page of your site.
Finding funding
Getting the money required to get your business off the ground can be tricky. Here are some pointers on ways you can get help with obtaining funding.
Startup loans
You could be eligible for a loan of up to £25,000 from Start-Up Loans, a government funded scheme which also offers mentoring and business advice. You can also look into business loans from high-street banks and building societies, challenger banks, independent lenders, and smaller specialists.
Collaboration
Look for any local creatives you could build a business with and work collaboratively alongside. Put out some messages on Gumtree or local job boards or speak to people you know.
Crowdfunding
Once your business is up and running and you’re looking for extra investment, asking the public for help is becoming increasingly commonplace. Use a website like Crowdfunder or Indiegogo to offer perks with varied value depending on how much each backer donates.
Calculating a day rate
Working out a sensible and competitive rate to charge for a day’s work can be tricky, particularly in a saturated market. Ask yourself how you want to appear to your potential clients. Of course, you don’t want to overcharge, but pricing yourself too low could mean you’ll need to work longer hours to achieve your desire.
Number crunching
To avoid making such a mistake, you could simply add 20% on top of your desired salary for tax, a sensible sum for expenses and holiday and divide the total by your working days - giving you a more realistic day rate. Don’t forget to allow for building up some savings or a pension pot too if you’re a good forward-thinker.
Add another 10% on top of this rate when you give a quote, then if you need to negotiate, taking this off will still leave you with the rate you’re looking for. Unless the job is a valuable gig for your portfolio, don’t do yourself a disservice by accepting any work for less than your day rate. Alternatively, it might suit you better to charge per-project rather than per-hour.
How to increase your day rate
As a freelancer, there’s obviously no boss or HR department to make the judgement for you - so you have to be the one to make the call if you want a pay rise. See what your more upmarket competitors have to offer and where you differ - don’t risk losing out on pay because you’re too shy to up your rates.
Give your regular clients plenty of advance warning if you’re going to be charging more. Nobody likes an extra expense coming out of nowhere, and this will at least allow them to budget accordingly. However, if you’re asking for more money, you need to explain why you deserve it. Explain to them briefly what sets you apart from those charging less.
Finding clients
Got a fantastic business idea in place, but not sure where to start with generating leads? You’re not alone. Lead generation is a vital part of running a small business, but even seasoned self-employed professionals can find it difficult sometimes. Having a broad set of methods for getting in front of the right people (and knowing how to hook them in) will improve the cash flow and public image of your business, and – just as importantly – your own morale.
Here are some ways your small business can generate leads and bring in more money.
Advertising
Search engines (mainly Google Ads, but don’t discount Bing) and social media channels offer straightforward ways of paying to get your small business in front of people, as well as advanced options for those with an expert on hand. These are often referred to as ‘Pay Per Click’ or PPC, and (if done right) are an incredibly targeted and effective way to get visitors onto your website or online store. Depending on what you’re selling, you also might want to consider traditional advertising. Local directories and newspapers are always looking to fill ad space, and might offer you a tasty discount for late space if you build a decent relationship with their sales reps.
Ask your friends for help
Phone, email, and text your family and close mates explaining you have this exciting new business venture, and that you’d really appreciate it if they could help you out. Even if they personally have no interest whatsoever, maybe they can tell their friends on social media, or might be able to hook you up with a friend who would love whatever service it is you’re selling.
Important note though, don’t confuse this with doing a big generic mailout of all your contacts, otherwise, you may fall foul of the GDPR rules regarding recipients needing to opt into promotional material.
Blog
Creating interesting and informative content will, if promoted properly, keep potential leads coming back and increase their awareness of your company.Showing that you know what you’re talking about will improve your credibility, and documenting your own thoughts and experiences can put a more relatable, human element to the company.
Business cards
If you want to make sure you’re making a lasting impression when you meet a potential client or customer, get some high-quality business cards printed.
Calls to action on your website and social media
Although this isn’t a platform in itself, calls to action (CTAs) are such an important lead generation factor that they deserve their own section.
Community involvement (online and in-person)
Getting out and about amongst your target audience via networking events, meetups, and industry conferences will keep your face and brand in the public eye. In the modern age, this can also be done online. Sign up to sites like Reddit, Quora, and community forums.
Competitions
Running a ‘like or share to win’ style campaign on social media can put your small business in front of hordes of potential leads. Keep in mind they’re probably just interested in the prize – it’s up to you to build something more meaningful upon their short-term engagement.
Flyering
Getting promotional materials printed and heading out to places your core audience hang out can still be a great way to generate leads. You also benefit from the personal touch that digital promotion lacks.
Free samples or trial runs
As with competitions, giving people something useful for free helps you stand out from the pack. Get them used to enjoying your service, and introduce the fees later on.
It’s important that you don’t confuse this with working for free - you want to be offering something that is useful for people - perhaps a template for a Facebook advert or a presentation rather than designing a logo for free and hoping they’ll then use you for paid work afterwards.
Newsletter
You’ll have already participated in some lead generation if you have a collection of email addresses to send a newsletter out to, but you can encourage the recipients to share the news with their friends using carefully tailored CTAs. As we’ve mentioned, all correspondence must now be in line with the General Data Protection Regulation introduced in May 2018.
Partner with another company
If there’s another business out there you have a feeling your target audience might be interested in, the feeling could be mutual. If you suspect this is the case, make contact and see what sort of relationship you can foster. Read our article on choosing the right business partner for some more useful pointers.
Rates enquiries
When you get an email from someone who just wants your rates, pick up the phone and ask them what they need, how you can help, and what their budget is. It’s easier to discuss rates on the phone, because you can respond to their reactions. So if they think your rates are high, you can ask what they expect to pay, and then you can decide if their budget is feasible for you.
Social media
Social media can be daunting if you’ve not been using it much previously, but once you’ve seen the success it can bring by generating leads, you’ll want to use it constantly.
Videos
YouTube is the second biggest search engine in the world behind Google (their parent company). Think about what you can do to build a YouTube presence and how you can then use this to generate leads and subscriptions.
Webinars/podcasts
A great way to showcase your knowledge and expertise is simply by talking to people for a substantial amount of time. Perhaps you can speak at a local or industry-specific conference, or host a seminar at a local function room. Recording and broadcasting interesting discussions and advice online can bring in subscribers, and mean that you have a base of people who are the first to know when you have a tempting offer or a new product available.
Website & SEO
Having your own website can give you authenticity, gravitas and simplicity. It’s important to make sure you’re doing your website justice by ranking above your competitors on search engines.
White papers
Got some unique insight into your industry? Slapping it into a blog is fine, but if it’s really valuable stuff and you’re keen to generate leads, you might consider creating a sleek looking PDF version and asking for the reader’s email address before they can access it. Of course, you’ll need to make sure the data you gather (and what you do with it) is in line with GDPR.
Word of mouth
Ask your best customers to talk you up to their friends, and give them a little extra service or special thanks for their good deed. Referral or affiliate schemes (like our Crunch referral scheme) or positive feedback on relevant review websites can often make or break a customer’s decision to engage with your business.
Working with international clients
One of the most attractive aspects of freelancing is that despite working from home, working online offers you many opportunities to land projects from clients across the globe. There are a few hurdles you need to be prepared to face, though. Different time zones seem obvious, but you’d be surprised how easy it is to assume your client is awake just because you are. Restrict yourself to emails where possible, and schedule calls and Skype only when necessary.
Different currencies
Take note of currency exchanges when charging a price for your work, and consider the acceptable rates in your client’s home nation.
Method of payment
If your client pays you via an international bank transfer, remember to budget your finances to cater for the standard 3-5 working day processing, plus possible costs for currency conversion. You should also consider getting paid something upfront.
Cultural differences
Talk in plain English with non-native speakers to lower the risk of a communications breakdown. Follow up with an email that outlines what has been agreed and always ensure that you have something in writing agreeing the price that’s been agreed and the payment terms.
Make sure you understand the tax implications.
We’ve got an article with the answers you need if you’re contracting abroad or working for a foreign client.
How to make sure you get repeat business
It’s one thing finding clients, but another thing altogether actually retaining them. There are a number of easy ways you can keep yourself “front of mind”, putting you in pole position should any more work come up.
Connect Follow your clients on Twitter, LinkedIn, Facebook, or wherever is appropriate. This way you can keep up with what their company is doing, and vice versa. You might even respond to them with the occasional comment or post to stay in touch.
Newsletters
Deliver a monthly or fortnightly email newsletter to interested parties, and consider asking new clients to your mailing list if they’re happy (GDPR).
Follow up
Once your project is complete, follow up with the client a few weeks later to make sure everything worked out well. Ask for their comments and feedback, and suggest ways to grow the project in the future.
Frequent their website and socials
Keep up to date with what the company is up to. Subscribe to their blog, leave some comments or link to useful content.
Leave a business card
Get business cards that stand out from the rest so you’re remembered in the future.
Merchandise
Print flyers, make pins, and brand your pens to hand them out at meet-ups.
Stay on top of the paperwork
Invoice straight away and include all the information your client will need (itemised bill, payment details, reference etc.) so there’s no back-and-forth. Say thank you when they’ve paid - the little touches really can help.
We have a free invoicing tool for sole traders as part of your Crunch benefits, as well as free invoice templates. For the more forward-thinking freelancers our fantastic online accounting software is all you need to keep on top of your business finances along with support and advice from our superhero client managers and expert accountants.
Produce your amazing work
By far the most effective method of generating repeat business is to be an amazing freelancer, day in and day out.
Dealing with difficult clients
Unreasonable clients are, unfortunately, something that all freelancers will encounter at some point. So how do you deal with unreasonable demands and bad behaviour from your client?
Unreasonable requests
If you’re a super savvy freelancer, you’ll have drawn up a contract between yourself and the client that clearly lays out the scope of the work. A contract is your security, and offers protection from unreasonable client requests.
Need extra help putting a contract together? Check out our article “Protect yourself with these contract samples”.
A bombardment of questions
When you start a new relationship with a client they’ll have some questions. But be sure to know if they’re asking relevant questions or expecting too much. How much you give clients for free is always a personal choice. State your position upfront.
Rudeness
Leave their request until you’ve had a chance to calm down and reflect. Of course, deadlines are important but it’s worth taking the time to respond in a manner that will strengthen your professional relationship rather than destroy it. If your client is truly abysmal to work with – get rid, life is too short! Think about the additional hours you spend working with a bad client. Not just in terms of answering emails, adapting or changing work – but the emotional time.
Dealing with late payments
Most businesses have been affected by late payments, but none are disadvantaged quite as directly as single-person creative businesses. A client can decide to withhold payment for a multitude of reasons: they’re unhappy with the finished work, they don’t have the money to pay you, or they’re just not nice people. Clients can be hard to win and easy to lose - but you must never be timid about getting paid for your work. Having fixed procedures in place will reinforce your professionalism, and might even increase your client’s trust in your service.
Invoice and chase letters
It’s unlikely the client is being slack just to spite you, so a polite reminder should always be the first course of action. Drop them a quick email and ask for a confirmation of receipt, so you know someone is dealing with it.
If a week goes by and still no payment, a firm reminder is appropriate. Pick up the phone and ask them again to confirm the invoice has been received. Keep notes of any calls or emails from the client regarding payment so you have a record of the broken promise to reference later on.
If another week of silence goes by and your requests are falling on deaf ears, it’s time to show you’re really serious. From day 15 to day 30, you should make regular contact with the client by telephone to ascertain the reason for the delay. Tell your client that it is your policy not to produce any further work until this issue has been rectified. Whilst you may have built up a strong personal relationship with the client, you’re better off spending your time looking for clients who actually pay their freelancers. We’ve got an article all about chasing unpaid invoices as well as some free late payment reminder letter templates to help.
Getting a third party involved
If you’ve exhausted all reasonable routes to securing payment, enlisting an agent to assist in the recovery of funds will free up company time to concentrate on other clients. Always seek out recommendations from other freelancers or an accredited body before making any rash decisions which will potentially cost you customers and return business.
A good agency will have the experience and procedures in place to rapidly escalate your claim for payment and will be able to advise you on the best way to approach the recovery. Typically you won’t be expected to pay for the time spent in recovery as many agencies offer a no collection, no commission service.
Overall, the best practice is to simply ensure that good, clear communication and documentation is maintained from the outset of the work you undergo for a client. This means that if the client does give you the run-around, you know that you’ve done everything correctly from your end – and that you can prove it.
Claim all your expenses
As a self-employed worker, tax relief can usually be claimed on anything that’s necessary and essential for your duties. This covers equipment like laptops, business cards, and telephone and internet usage (keep a copy of your itemised telephone bill!).
HMRC defines allowable expenses as being ‘wholly and exclusively’ incurred in the performance of your duties, so as long as the items are not too frivolous (sorry, no coffee machine) you won’t have to pay National Insurance or Income Tax on it.
As a freelancer you may often fork out for travel, accommodation and subsistence, should you need to, which are all claimable as business expenses alongside payments relating to your business for services like accountancy, advertising or insurance. If you’ve got kids, HMRC deems childcare vouchers acceptable to claim on if you’re already in the scheme (It was replaced by the tax-free childcare scheme in 2018). You’re also entitled to a tax relief on things relating to your physical wellbeing, like medical insurance and eyesight tests/glasses.
Travelling to work
You can claim 45p per mile on the first 10,000 miles of business travel in the tax year. After that, it goes down to 25p per mile. Motorbikes differ slightly with a blanket rate of 24p per mile. It may come as a surprise to many, but if you’re working as a limited company you can even claim 20p for each mile travelled on a bicycle. Sadly this is not available to sole traders, though they should be able to claim the costs of a bike used for commuting. Avoid excessively using taxis, as HMRC don’t tend to accept these as necessary expenses.
Tolls, congestion charges, and parking fees (not fines!) are all allowable, but as always, make sure that you keep all your receipts and a mileage log.
How do I go about actually claiming expenses? Keep accurate records of every transaction as proof of your costs. If you’re working through your own limited company then your allowable business expenses will reduce your Corporation Tax bill. If you’re working as a sole trader your expenses will reduce your business profits, lowering your personal Income Tax bill.
January 31st is Self Assessment deadline day each year - so you have until then to get all your paperwork in order and submit your personal tax return to HMRC. When it comes to filling in your Self Assessment tax return, add up all your allowable expenses for the tax year and insert the total amount. You don’t need 40 to send in proof of expenses, but always keep proof and records for six years. Our Self Assessment article explains it all. We've got handy articles on expenses for limited companies and expenses for sole traders to give you all the details.
Bookkeeping
Bookkeeping is far from the most glamorous part of freelancing, but it becomes far more difficult than it has to be when it’s left until the very last minute. A big no-no is to hide all your receipts in a box and retrieve them with a few hours left before the tax deadline.
A year’s worth of bookkeeping in one sitting is a hefty task, but split over 52 weeks, the same task becomes much less daunting. Set aside half an hour every week to send invoices, record expenses, reconcile your bank account, and chase overdue payments. This way you’ll always have a good idea of your tax bill, reducing the risk of being stung by the taxman at the end of the year. Our article on bookkeeping and why it matters is a good place to start.
Scan your receipts
It’s a good idea to scan your receipts and back them up online somewhere to avoid them getting lost or worn out. Once your paperwork is safely backed up online, you can de-clutter with confidence, as HMRC accepts scans of receipts if the physical copy isn’t available.
Crunch has a simple receipt scanning tool through the Crunch ‘SnapApp’ available for all Crunch clients to use on the go as and when they make a business purchase.
Need more support?
With Crunch’s subscriptions, there is an array of support available to fit your business needs. From our ‘ask an advisor’ service for all Crunch clients, software walk through video calls, our team is on hand to provide you the assistance you need. We also have qualified Chartered Certified Accountants at Crunch who can support our Crunch Free clients on a 30 minute phone call for just £24.50 +VAT through our ‘Ask an Accountant’ service, or for our Crunch paid subscription clients, you get unlimited access to an accountant.
