Want to ditch the nine to five, become your own boss and start your own business but worried about doing so? Becoming a freelancer is one of the most rewarding things you can ever do with your career but it's also very challenging and sometimes scary.
However, to make sure you're fully prepared and reassured, here's Creative Boom's list of the top 10 things you should know before taking the leap and going freelance. If you'd like to add any of your own pointers, simply comment below.
1. Starting is easier than you think
Starting a new business is pretty straight-forward, especially if you set up as a 'sole trader'. You basically inform the Inland Revenue for tax and National Insurance purposes and register as self-employed. It's as simple as that really. In fact, here's an easy checklist to ensure you've everything in place to become a 'sole trader'...
- Have you registered as self-employed with HM Revenue & Customs?
- Have you found out from your local authority if you need to pay business rates or obtain any permits/planning permission that you might need to work from home?
- Registered for VAT if you expect to have a turnover of more than £68,000 a year?
- Set up record-keeping system for all your invoices, purchase orders, etc.
- Ensured that your own name is on all of your business stationery? That includes all letters, receipts, cheques and invoices?
And that's pretty much how you get started. It's really not that difficult. But you have to make sure you tick everything off this checklist before you can call yourself a sole trader.
2. You don't need a business loan
Starting a freelance business isn't expensive and you don't need to write to your local bank manager to request a business loan. Simply set up your computer on a desk at home and get started. Figure out what your company is going to be called and design your own logo. Then set up your own website through a free blogging platform like Tumblr.com or Blogger. It's as simple as that.
When you start making money and you can afford to, hire a proper graphic designer to improve your branding and then eventually hire a web developer to create a more bespoke website. But when you're just starting out, just keep costs to an absolute minimum and don't assume you need everything sorted right away because you don't.
For example, when I first launched my business back in August 2007, I designed my own branding even though I'm not a designer. What I created was appalling, that's for sure - but it didn't put off any clients that I won at the time. I also created a simple website, using a free blogging platform and designed and printed my own range of stationery. I recommend you do the same. It makes no sense forking out lots of money on things you can get by without in those early days.
3. You don't need expensive office space
Most clients don't care if you work from home as long as you provide a reliable and quality service. But business can be about image and some people might not take you seriously unless you have your own office. Therefore make best use of the virtual office space providers out there or consider joining a co-working space.
Ok, so you're telling a bit of a white lie by doing so, but it does no harm. If a client directly asks where you work, just be honest! Hopefully, you'll have won them over by then and where you work will no longer be an issue to them.
Just bear in mind, if you are working from home you may still need to pay business rates or even seek planning permission, depending on your business needs. Check with your local authority to see what's the score.
4. There will be droughts
Freelance work doesn't bring a regular salary like you're used to. There can be long periods when work dries up and you have nothing to work on. To prepare for moments like these, always have a buffer zone in terms of savings. Try to have enough money in the bank to cover three months' worth of your outgoings, just to make sure you're safe if you suffer from a work drought.
And when you are suffering from a quiet period, use your spare time wisely. Work hard on your own marketing to try and attract new clients. Get out there and network as much as possible and try and stay positive. The work is out there - it's just a case of being pro-active.
5. Beware of the roller coaster cycle
When freelancing, there'll inevitably be very productive and high-earning periods. Those amazing times when you're making lots of money and enjoying a healthy bank balance. But before you go out and splash the cash, be aware that the good times might not last. Because every freelancer is constantly on a roller coaster cycle of ups and downs.
There will be quiet months and there will be months when you're working all hours of every day. Just remember that any money you earn one month, might not be the same the next. So get used to saving for a rainy day and be prepared for the worst at all times.
6. Clients won't pay on time
It's a sad part of the freelancing way of life but you have to expect that most clients won't pay on time. So make sure you have contingencies in place to prepare for this sort of thing.
On all invoices, add payment terms - the standard being '30 days'. And you're within your rights to start charging interest on any late payments. There are laws to protect you and you're entitled to enforce them. Read this Business Link article to help you calculate interest where necessary.
On larger projects, I'd advise requesting deposits upfront and 'payment stages' or a payment schedule. This reduces the risk of not getting paid or helps to fund the project and your work as you go along.
7. You don't need a big portfolio to start out
If you don't think you're good enough to go freelance because you haven't got a decent portfolio or your CV isn't up to scratch, think again! Just spend time building up your portfolio or CV by getting as much experience as possible, wherever you can. Most importantly, remember this - you have skills and people will always want to pay for those skills. Have confidence in yourself and use the first year of going freelance to really get to grips with running a business, building up contacts and experience.
And remember, half of what you need to run a successful business is confidence. If you don't believe in your own skills and abilities, no one else will. But if you still feel under-prepared, consider taking an evening course or train yourself up to learn new skills. Because the freelancer that's always striving to improve and better oneself is more likely to succeed overall.
8. Some clients will try to take advantage
Clients can be difficult and they will try and take advantage in many ways. If you're fully prepared for anything that might go wrong, you'll avoid the common client pitfalls. First and foremost, I'd advise getting everything in writing whenever you're quoting for projects because this is often the most likely problem you'll encounter - clients trying to get more for their money without paying for the extra time you put in. So before any project, write down exactly what you'll be delivering and make it hugely clear what the client will and won't be getting.
It's also a good idea to learn the warning signs of potential difficult clients. You can read this helpful article on how to spot them before it's too late.
9. You'll miss the safety of being employed
It's no secret that freelancing is a challenge. And you will find yourself missing the safety and comfort of a full-time job. On those difficult days when you're dreaming about a regular salary, the company of co-workers and the reassurance that your job will still be there on Monday morning, think about this - no job is secure! Especially in these uncertain economic times.
Freelancing is tough yes - but it also brings a wealth of benefits. When everyone else is beginning the long commute to work on a freezing cold Monday morning, you could still be tucked up in bed or snuggled by your own radiator in your cosy office at home. When you're starting a family, you can fit work more easily around family life.
Plus, when everyone else is getting a nice, regular salary - you're enjoying a much higher earning capacity. And when you work incredibly hard, you're not lining someone else's pockets - you're lining your own. For many of you, once you've gone freelance - you'll do everything in your power to never go back to full-time employment. Trust me, freelancing is the best.
10. Freelancing is fun and hugely rewarding
Yes freelancing is hard work. And yes there are times when the going gets tough. But overall, freelancing is lots of fun, hugely rewarding and different every day. It brings a huge amount of freedom and your earning potential tends to be a lot higher than if you were working for someone else. You can work your own hours and choose the way you want to work. You can take week days off and work weekends instead, if that suits. Nothing beats freelancing and for many of you, you'll never go back once you've gained the freelancing bug. So what are you waiting for? There's really nothing stopping you except yourself, so go for it!