Four questions you need to answer before you go freelance
Thinking about going freelance? Here are four questions you need to answer before making the leap.
Freelancing is becoming increasingly popular and more and more people are ditching the office in favour of a freelance lifestyle. Statistics show that there are currently over two million freelancers in the UK and freelancers contribute an impressive £125 million to our economy.
Going freelance can be a challenge, but it can also bring about some wonderful benefits. This includes higher earning potential, more autonomy over your work schedule, and the chance to improve your work-life balance.
Freelancing will allow you to earn money safely from home, which is ideal given the current situation with the coronavirus pandemic. That said, setting up as a freelancer is not always easy and you will need to be prepared for various potential challenges.
With that in mind, here are some key things to consider if you’re thinking of becoming a freelancer.
1) Do you offer a service that people need?
Your ability to succeed as a freelancer in the current coronavirus-stricken climate will largely depend on the services that you offer.
Some freelancers are in high demand now, whereas others are struggling to find work. For example, freelancers who specialise in travel planning are likely to find it more difficult to secure work as most people can’t travel at the moment.
On the other hand, entertainment and technology companies are booming because people are stuck indoors and looking for new ways to entertain themselves at home. Carefully consider your skills and expertise and think about whether you offer a service that people and organizations need at the moment.
2) Can you reduce your overhead costs?
One of the biggest advantages of working as a freelancer is you will have relatively low start-up and overhead costs. Freelancing is one of the cheapest business types to set up, but there will still be some costs involved.
It is important to try and keep your overhead costs as low as possible, especially considering the current economic uncertainty. Fortunately, there are dozens of simple ways to cut your freelance overhead costs. Here are a few ideas:
- Slash your home energy costs by switching to a cheaper supplier.
- Reduce your energy usage by turning the thermostat down a couple of degrees and switching lights and electronics off from the wall when not in use.
- Take advantage of free business bank accounts. Some business bank accounts won’t charge for transactions and many have free introductory offers.
- Hold virtual business meetings via Skype or Zoom instead of travelling.
- Buy second-hand office furniture. Choosing used instead of new is great for the environment and your wallet!
3) Do you understand the legal requirements?
Going freelance is typically less complex than other business ventures, but there are still some legal things to consider when you go freelance. In particular, you must have a clear understanding of your accounting and financial responsibilities.
All UK freelancers must declare their earnings and complete a yearly tax return. You should plan for this and set some money aside each month towards your tax payment. This will avoid the inconvenience of having to pay a large tax bill in one go.
Luckily, there is a fantastic selection of apps that can help you manage your bookkeeping and finances. Some of the most popular accounting apps for freelancers include Coconut, Wave, and FreshBooks.
If you have minimal experience managing business finances, then it might be a good idea to hire an accountant to ensure that your financial records are compliant.
4) Do you know how to market yourself?
There is strong competition between freelancers and you must have a clear understanding of how to market yourself online. Your online portfolio will be a vital tool in winning over clients and securing freelance projects.
Start building your online portfolio as early as possible and make sure that it showcases your best work. You can search for available jobs on freelance platforms like UpWork and Fiverr.
Many freelancers also leverage social media channels to expand their professional network, connect with potential clients, and secure work online.
Once you begin freelancing, ask your clients for testimonials and highlight these on your website and portfolio. This will help you build credibility and become an authority in your niche.
Are you ready to go freelance?
Freelancing can be an excellent way to earn money online and gain more autonomy over your work life. When you start freelancing, you will have the flexibility to choose when you work and can fit work around your schedule and commitments.
Freelancers can also charge a premium for their services and boost their earning potential by becoming experts in their field. Going freelance has some amazing benefits, but it also has its challenges. You must plan carefully and be prepared to work hard to achieve success in the freelancing world.
Lily Harris is a freelance writer focused on small business, entrepreneurship, and business operations and advice.
Lily is passionate about showing others that starting a business is a viable career path. When she isn’t writing, she can be found walking her cocker spaniel or getting stuck into a new baking recipe.
Photo by Kelly Sikkema