10 Steps to Take Starting Out as a Freelancer

Going freelance can be an amazing adventure but it can be a bit of a roller coaster. Here are ten ways to make the transition easier.

Freelancer is the new rock and roll – kind of. Okay, that might be a bit of an exaggeration, but a lot more people are doing it. With remote work becoming more fashionable and COVID-19 putting many jobs under threat many people are taking this opportunity to take the plunge. However, there will be many pitfalls along the way. Here are a few tips to ensure you don’t get caught out.

 

  1. Checking your finances

If you’re currently in work, giving up that secure and reliable income is a risk. The good side of freelancing is that you can always work to increase the amount you get paid. The downside is that nothing is guaranteed. A dry month could leave you struggling. Before making the leap, it pays to think about what regular financial commitments you have such as rent, mortgages, childcare and whether you are certain you’ll be able to meet them. It’s important not to be overly optimistic. It’s easy to look at your situation and think you’ll be earning big money from the get-go, but this is never guaranteed. In an ideal world you’ll start with a buffer to make sure you have leeway in case those first few months are harder than you think.

  1. Get disciplined

With the pandemic we’ve all become more accustomed to working from home. However, being your own boss brings an entirely different dynamic. There is nobody shouting down the line at you if you get up late or bunk off early. You need to be disciplined and set a routine. Every hour you don’t work is an hour’s worth of money you might not be making.

Try setting a routine such as setting an alarm, getting up early and preparing for the day as if you were going to work. Some people even find it helps to wear a suit – even in the home office – as it puts them in that working mindset.

  1. Set your prices

As with any business you need to set your fees. On the one hand you don’t want to sell yourself short, but on the other you don’t want to price yourself out of the market. If you’re just starting out and don’t have a body of work to show, you may have to be willing to accept lower fees. Research the market and see what other people are charging. Also, make predictions about your own financial requirements. Work out how much money you need for this to be sustainable.

  1. Finding work

There are a number of websites which promise to help freelancers find work, but these often vary in terms of quality. Some may attract lots of posts from companies which appear to be looking to pay unrealistically low rates for work. Platforms can also be swarmed with low value freelancers making ridiculously low bids and crowding more genuine sellers, such as yourself, out of the market.

If you’re already working in a sector, you may also have built up contacts. These can be immensely valuable as a warm contact is much more likely to lead to work. Keep these contacts and nurture them. You never know when things might pay off.

  1. Advertise

Depending on your type of business it may also pay to advertise in the local paper or the shops. If you’re offering services such as plumbing, building or gardening, for example, your biggest market will be the area immediately around you. Try raising awareness here first and spreading out as you go.

Word of mouth advertising can be incredibly beneficial. If you provide a service to someone in your area they may mention you to others, so it pays to nurture those first few customers.

  1. Use social media

Social media is everywhere and can be an unexpected source of business. LinkedIn can be particularly useful and is set up specifically for freelancers and businesspeople in general. This is an online networking hub where you can post your portfolio, show people your CV and build a profile in your sector. Many recruitment experts routinely scour LinkedIn looking for their next hires. This is a good place to get yourself seen by the kind of eyes which will be most useful to you and your business.

  1. Get the admin in place

One of the most difficult aspects of becoming a freelancer is doing the admin. The chances are you are going it alone because you have a marketable skill – not because you’re great at keeping records or managing accounts (unless of course you’re a freelance accountant, in which case you’re off to a wonderful head start).

Keeping all the admin in order, though, will be vital. You could upgrade to an accounts system, or even employ your own accountant. This will cost money, but it can keep your finances in order and make sure you’re planning ahead for obligations such as tax.

  1. Register for self-assessment

Talking about tax remember to register for self-assessment and national insurance contributions with HMRC. Gone are the days of your employer doing all this for you – now it’s down to you. If you don’t keep on top of this it can be all too easy to fall behind. You can register via the government’s website. Once you have done this, you should receive a unique taxpayer number and all the information you need to get to work.

  1. Choose your structure

As a freelancer you’ll have to choose between being a sole trader or a limited company. The standard approach is to be a sole trader which minimises the paperwork. You’ll only have to handle your own self-assessment and all your payments will go straight into your bank account. As you grow, though, you may want to establish yourself as a limited company – even if you’ll be the only employee. This means more paperwork and places certain obligations on you, but it can be more tax efficient and gives you a platform from which you could potentially build a brand-new business.

  1. Invoice quickly

Once you do get to work it’s important to invoice quickly. Poor cashflow could be the bane of your life. The more promptly you raise invoices and the clearer you are about payment terms the more quickly you are likely to get paid.

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