According to Consultancy.uk there are already around two million freelance workers in Britain, a number that’s widely predicted to keep on rising. A dramatic increase in freelancers came about from 2009 onwards, as the global banking crisis and resulting recession began to bite. But going independent isn’t necessarily a decision you make in a crisis, say because you’re made redundant. Working for yourself has a great many advantages, but it is not for everyone. It needs stamina and commitment. It can though be a life-changer as long as you think things through and do due diligence beforehand. Here are some things it’s worth thinking about before taking the plunge.
- First and foremost, you have to be totally honest with yourself about your work personality, your emotional needs. If you love creating and nurturing relationships, engaging constantly with colleagues, feeling part of a team, freelance life might not be for you. You need to be self-reliant, independent, and not the type to get easily bored, worried or lonely when faced with periods of solitude.
- You need to know exactly what you have to offer, and that means knowing what excites you about your business idea. Pin down your purpose, then you can get your story straight. You need a potent narrative that’ll help you create an attractive brand, communicate in the right tone of voice, and convince people you mean business.
- Clarify the skills you have, and those you’re going to focus on as a freelancer – are your skills in genuine demand, or are you engaging in wishful thinking?
What kind of self-employed do you want to be?
There are three ways to be self-employed.
- As a sole trader you’re self-employed and run your own business as an individual. You keep all your post-tax profits, but you’re also responsible for losses.
- A partnership is much the same, but you work officially with at least one other person. You share responsibility for costs and losses, and you share the profits after you’ve paid your own share of the tax.
- When you set up a limited company, the business is a separate legal entity from you, with separate finances and liabilities, one or more directors and one or more shareholders. There are a lot more rules to follow, and much more complicated accounting.
Which one is best for you? It’s debatable, and a good accountant or business expert will be able to advise you. Some people start a freelance business as a sole trader then, when they’re established and it’s clear the idea is working, change to limited company status. Some people stay sole traders for life, and it’s the simplest way to go freelance. And while some say Limited Company status makes a business look more legitimate, others don’t think it matters.
Where do you want to work?
If you’re someone who loves to be sociable, working at home alone might not suit you in the long term. If you’re solitary by nature, the bustle of a hired office in a business centre, a hot desk or your favourite coffee shop will soon start to drive you nuts. Some people start off working from home then graduate to an office once they know their new business has legs. It’s worth thinking about early in the process.
Important official considerations – Insurance and HMRC
If you’re going to be a sole trader you need to officially register as self-employed, of course. And that means contacting HMRC. Do it as soon as possible after going self-employed, because they can fine you if you leave it too long – you must register by the right time in your second year of business. Best always to get up-to-date advice – early on in setting up your enterprise.
You will also need insurance. If you provide professional advice and services, for example as a coach or a digital marketer, you’ll need Professional Indemnity Insurance. If you work in leased premises they might have a buildings and contents insurance policy, but check in case you need to insure the building or its contents yourself. You might even want to consider Business Interruption insurance. It’s a good idea to go see an insurance intermediary, an independent broker who’ll be able to tell you which insurances you need.
Telling people about you – Marketing your skills
Here are some essential tips to think about straight away if you are about to work for yourself.
- Your clients need to know exactly what you can do for them, and you need to communicate it quickly and effectively. You need a website – so make sure you register the domain name you have chosen quickly.
- You need a strong social media presence. Choose the networks that your potential clients are most likely to be on.
- Do you need actual printed materials, or is online content sufficient? Plenty of freelancers are paper-free, but you might need leaflets, brochures and business cards. Keep your designs simple and clear.
- As a freelancer you might want to include an image of you on your site and in your marketing materials. Use one you feel completely comfortable with.
- Use a consistent tone, look and style throughout all your marketing materials, online and offline, integrating everything you do to achieve more than the sum of the parts.
- Bear in mind a blog is still a great medium, the simplest and fastest way to keep a website fresh, adding new content regularly and pleasing search engines.
- Always use plain English – never use jargon, always write the way a regular person on the street speaks.
- Check no one is already using your business name or trading under a very similar one, particularly if their services are also similar to yours.
More things to be aware of
- Always have more than just one or two clients, since putting all your eggs in one basket leaves you in a vulnerable financial position. Plus, the tax man might class you as employed, not self-employed – to be genuinely self-employed you choose how, where and when you work, have several clients, and buy your own equipment and materials.
- Keep receipts and records of everything you purchase, pay for or do.
- A good accountant who’s au fait with self-employment is like gold dust – get one as soon as you can.
- If you’re not 100% confident in how to run a business, treat yourself to a course.
- Always create a business plan, an essential launch-pad for your new business. There’s a great deal of excellent advice online showing you how to create one. You might also like to read one of our blogs on this topic
- Plenty of freelancers jump ship from employed life because a client or someone else has offered them work, so there’s a good start to be made. If that’s not you, begin creating awareness amongst the contacts you already have, people you’ve worked well with in the past. People who trust you and know your work, could help build your reputation or recommend you to others.
- Your first clients are really important. Don’t forget to ask for referrals and testimonials, adding them to your website.
Do great contracting, get your pricing right
- Contract clearly and up front. Find out exactly what the client wants, what their priorities are, and when they want it.
- Look very carefully at how you price and cost your jobs. Invariably you’ll spend more time on them than you first anticipated.
- Your trade association or others working in similar areas can guide you about pricing, and it’s worth networking with other freelancers to ascertain average prices and market levels. Remember there are always hidden costs, expenses and some overheads even when you’re working for yourself.
- Although clients value flexibility and your ability to deliver to a deadline, it’s important to negotiate these realistically and discuss the conditions of your work as well as payment.
We can help you go freelance
At the Listening Partnership, we’ve worked with many people who have successfully become freelancers. If you’d like to explore the potential of life as a freelancer, do get in touch. We’ll be delighted to hear from you.