According to recent research from freelance website Peopleperhour (PPH), more Brits than ever before are choosing the freelance life over the traditional 9-5 working day. In fact, so many workers are now opting to be self employed, it’s estimated that one in two workers in the UK could be a freelancer by 2020.
Before you hand in your notice and order some business cards, you might want to consider some of the less appealing sides to freelance life. Here are five of the common areas of difficulty faced by freelancers, along with some solutions designed to help you get ready for the jump.
Finding work
If you’re well established in your field you may be able to rely on former employees or links with ex colleagues to supply you with a steady supply of work. However, if you’ve not got much of a network in place, you’ll need to do a lot of legwork to adequately advertise your wares. it can be helpful to register your interest in freelance or temporary contacts with a recruitment agency in your niche, though this isn’t always a fruitful option if you’re not prepared to work on site and potentially travel a little.
Many freelancers choose to build up their client base over a period of time before committing to being full time self employed. This is a safer option you can follow by setting yourself a deadline to work towards and gradually gaining clients through a mixture of networking at relevant events, perhaps setting up your own website, and pitching for work on freelance sites. Depending on your chosen field you might find you are able to get by without a website or online portfolio, particularly if you are good at pitching for work on freelance sites. However, you’ll need to factor in any fees or commission taken by freelancer platforms such as PPH when it comes to setting your rates.
Fathoming tax rules
Working as a freelancer is a simple case of registering as self employed with HMRC, putting away 30 percent of your earnings and filling in a form stating what you’ve earned at the end of each tax year, right? Well, not quite. Thanks to the nuances of the British system it can actually be pretty tricky to work out how much to put away and what you can and can’t count as expenses. There are plenty of software options such as Freeagent out there to help you keep everything in order but if you’re able to keep accurate records you may find that paying a professional is a timesaving option that’s cheaper in the long term. Not only will an accountant have a better idea of how the rules apply to you, they should also be able to show you where to make legitimate savings too, making their wages worthwhile.
Sorting your own space
In theory, being freed from working in your stuffy office leaves you open to far more comfortable working options. In practice, finding a quiet, well-lit place to work with a reliable WiFi connection, should you need it, is a little harder to do. Working from your sofa can seem like a workable solution at first, before the back pain kicks in and you start to get drawn in by the temptation of the TV remote or the attention demands of the family pet. Those with a spare room that can be turned into an office can fair a little better and may incidentally find tax benefits to working in a set space.
If you’re not one of those lucky people with a room to spare, think about cornering off your own working zone within your living or dining room. Make sure it’s well lit and that people know when you are working and therefore when not to disturb you by fitting internal room dividers like these.
Being paid on time
If you’ve ever asked for a payrise and found it exceedingly awkward, you’re likely to find all the financial chat of freelancing just a bit icky. You absolutely must be clear about costing for projects, meetings and changes because otherwise you can find yourself taken advantage of – intentionally or otherwise. In addition to being clear about your rates you need to be firm about payment processes too. Chasing invoices costs you money and can leave you financially vulnerable. Some freelancers like to make sure they’re not too reliant on any one regular client for money.
Other useful tips are to send across a payment contract with the payment schedule outlined before a project commences, or asking for part of the payment up front on big projects. If a client pays late you are entitled to charge late payment fees and interest, though you’ll want to weigh this up against the potential impact on your working relationship, should you want to continue it.
Benefits and pensions
Leaving a job will likely mean leaving behind a pension as well as benefits such as sick pay, maternity or paternity leave and holiday pay. While you might find that you’re able to earn more as a freelancer to offset the loss of such benefits you will need to plan sensibly for circumstances such as illness or spells where your skills might be less in demand. The IPSE provides some benefits for their members, alongside help and advice on how to handle your finances as a freelancer. Ultimately though, you’ll be in charge of ensuring you stash some cash away in case of rainy days and factoring a bit of buffer into your work schedule will also be fundamental to your success.
Are you thinking of moving into freelance work? Is there anything that is stopping you from taking the first steps?
Collaborative post