Once upon a time, freelancers were predominantly writers and journalists who worked for various publications. Those days are over. Freelancing has expanded well beyond the domain of scribes, and now there are freelancers in almost every industry.
According to the latest statistics, there are over 2 million freelancers in the UK, and they contribute a whopping £125 billion to the UK economy. Choosing to hand in your notice and become a self-employed freelancer is an exciting moment, but it’s a big decision to make, and it certainly won’t always be plain sailing.
Are you thinking of making the jump to freelancing? It can be a great way to earn money and work on projects you love, but there are some things you should think about before taking the plunge. Here are four factors to consider before going freelance.
Stepping away from traditional employment comes with a lot of benefits. You get to work for yourself, nail your work-life balance and choose who you work with. But alongside the benefits, there are also potential drawbacks. The biggest one is the lack of consistent income, especially when starting.
Freelancing can be a bit of a financial rollercoaster; you’ll inevitably enjoy high-earning, productive periods, but there will also be quiet months where money is tight, and you may need to dip into savings to pay your bills. One of the skills you’ll need to master early in your freelance career is money management. While it may be tempting to splash out and treat yourself in those good months, creating a rainy day fund for any quiet periods is invaluable.
The first few months of freelancing can be tough while you’re finding your feet and finding work. Before you make the jump, consider if you have enough savings to get through that initial period comfortably.
You’ll also need to consider startup costs. The cost of launching a freelance business varies drastically depending on your industry. For example, If you’re starting a freelance photography business, you’ll need far more startup equipment than if you were a freelance journalist.
Before you hand in your notice and start packing up your desk, it’s worth taking the time to prepare. There’s a lot to get in place before you can begin working with clients and making money, and it’s easier to do that with a steady income rather than scrambling to do everything in your first month as a freelancer.
The amount of time you’ll need to prepare will vary depending on your industry, but for most, at the very least, you’ll need a compelling portfolio. Spend time finding the examples that show your skills to potential clients and take the time to organise them. You can do this either physically or by creating an online portfolio — either way, it needs to be impressive.
Next, you’ll need to decide where you’re going to work. If you’ve been working from home during the pandemic, it’s likely that you’ve already got a workspace, and you can tick this off your list. If you’ve not got a workspace at home, you can explore local options like coffee shops and co-working spaces.
While you still have a regular income, take the opportunity to work out how you want to run your freelance business. As you progress, you’ll undoubtedly change and improve your processes, but having them in place means you won’t be chasing your tail from the start.
Finding work as a freelancer is imperative to your success. Without it, you’ll have no steady income and struggle financially. Finding work is undoubtedly one of the most challenging parts of going freelance. If you’ve never worked for yourself before, it can be challenging to know where to start looking.
Fortunately, with the global rise of freelancing, there are a lot of places available to find work. Whatever your industry, there are bound to be online marketplaces and recruitment platforms that are an excellent place to start looking for gigs.
Before you leap into freelancing, put in the time to research freelancing in your industry and look at other freelancers in that market to see what they’re doing. You can even contact some freelancers and see what they do to find work — they might even give you some contacts.
Another way to find freelance work is to put out some feelers to your friends and family. More often than not, a friend will know somebody that needs some help. With startup culture booming and more small businesses opening every year, there are plenty of opportunities for freelancers.
Finding work can seem like an uphill battle at the beginning of your freelance career, but it gets easier. As you work with more clients, they’ll likely offer you more regular work and recommend you to other businesses. It takes time, but keep at it, and it will pay off.
Once you’ve worked out your finances, got your workspace and portfolio ready and found good sources of work, you’re almost ready to get started. The final thing that you’ll need to do is register your business with HMRC and Companies House.
As a freelancer, you have two options for registering your business: sole trader or limited company. The big difference between a sole trader and a limited company is that a limited company is a separate legal entity. This will change the way you register your business and pay tax.
Most freelancers begin as sole traders to allow themselves time to grasp the other aspects of freelancing before forming a limited company — but there’s nothing to stop you from starting a limited company straight away.