There is a lot to be said for being your own boss. I made the break from full-time employment in 2006, one month after getting married! I had a single client in place before handing in my notice, but it was still a big gamble, and particularly as I was hedging my bets on the emerging social media space. When I think back though, the nerves were minimal. Excitement and anticipation overwhelmed any feelings of doubt, and I couldn’t wait to be in charge of my professional future. I had created a tiny work space in my bedroom, within our one bedroom flat at the time. I was young, determined and raring to go.
Almost 10 years on (running Populate Digital and Bloggers Required), I can honestly say I have never looked back. Of course, working for yourself has its highs and its lows, as any job does, and the economic climate is tougher than it was back in 2006. But the freedom and autonomy that being freelance or self-employed brings, is something that I would now find very hard to give up.
It seems I’m not the only one. There are 1.4 million freelancers working in the UK, across all sectors, which is a 14% increase in the last decade. In the US, freelancing, or gigging, is extremely well-established with an estimated 34% of the workforce consisting of independent workers, which equates to 53 million (Accenture).
The skillsets offered by Britain’s freelancers is worth £21 billion to the UK economy in added value, according to IPSE. Flexibility and lifestyle seem the primary drivers for this, with 78% of the UK public thinking that freelancing and flexible working help promote a good work/life balance. Additionally 72% think freelancing has a positive effect on family life.
But what’s really telling is that one fifth of UK graduates with first class degrees say they have already chosen to work as a freelancer, suggesting that the freelance economy is really beginning to take hold among the brightest students of Gen Y. Additionally, freelancing is now seen as a highly attractive and lucrative career option by 87% of students with first or second class degrees. Nearly a third (29%) of all graduates also say freelancing is part of their career strategy for the next five years. This data comes within a February 2014 report on Gen Y and Freelancing which looked at “the transformation of UK graduate career aspirations and what this means for businesses”. Its findings suggest the freelance economy will continue to gather pace in the UK, with today’s graduates expressing greater preference for a healthy work-life balance, independence (i.e. the lack of a real ‘boss’!) and higher earning potential.
If you are thinking of going freelance, here are a few tips on how to get started, which are based on my personal experience…
- Have your personal finances in order
If you’ve always been in permanent employment, you will know the luxury of a monthly paycheque. Freelancing requires a different mindset to income. There’s the potential to earn more, but unless you’re extremely lucky, there’s little guarantee that invoices will be paid on time. Make sure you have saved up enough funds to fall back on, when payments are slow to come in. Generally speaking, you should have saved up enough to cover your monthly outgoings for three months, minimum. If you’re already good at managing your finances you have nothing to worry about, but if this doesn’t come naturally to you it is worth researching a good accountant.
Without a shadow of doubt, the best way to secure work is through personal recommendation and your network of contacts. Bringing in new business takes an awful lot of time and effort, and so ideally you want your contacts to be putting in a little bit of leg work for you, recommending you to their contacts and dropping your name into relevant conversation. I’ve always offered a 10% kickback to my contacts if I win business off the back of a personal recommendation, which is a nice way to say ‘thank you’. So in the run up to going freelance, organise meet-ups with your most trusted contacts, and hop along to as many networking events as you can manage. It’s worth getting some business cards made, ready to hand out.
- Have at least one client under your belt
You are likely to have contractual restrictions with your current employer about who you can approach for freelance work, and it’s important to make sure you are clear on those. But there will be lots of scope for how you can go about securing at least one new client before you break away from full time employment. Don’t rule out the prospect of your employer becoming your first client. Most bosses are understanding of an individual’s decision to go freelance, and if they’re sensible, there’s no reason why they should lose your talent. You could always offer them a prolonged exit, so that they have time to decide how to best fill your position.
- Sole trader, partnership or limited company?
This is the bit that often seems the most daunting, but the reality is that you can set up a limited company in a day, for as little as £15!
If going freelance, you can choose to operate as a sole trader, or form your own limited company.The core difference is that if you’re a sole trader then there’s no legal separation between you and your business. You are liable for all actions undertaken by the business. If you form a limited company you create a separate legal entity and decrease the amount of personal liability you have in the business. However a limited company has a number of tax implications, and reliefs, depending on your earning potential. A good accountant will be able to advise on the best set-up for you.
- Get smart about technology
A report by Elance entitled ‘Generation Y and the Gigging economy’ says:“technological advances have made it possible to work collaboratively with people all around the world.”
Getting your technology set-up right at the beginning, so that you can work smartly from your home office, is crucial for operating professionally. Online meeting technology, such as GoToMeeting, can help to make virtual client meetings more effective, and remove the need for much travel. Finding a straightforward online collaboration tool is also essential if you’re going to be managing projects, or working in conjunction with other individuals. There is also a good selection of affordable online accounting software available, such as ClearBooks or QuickBooks, enabling you to keep things in order yourself and bypass the fees of accountants.
- Accept there will be peaks and troughs
Freelance work is like buses. Some months you will be inundated, while other months might be worryingly quiet. This is where good financial and project management comes into play. Accept there will be peaks and troughs, and in the peaks, be careful to never take on more than you can manage. Have a trusted freelance friend to pass work to when you are swamped, and hopefully they will be kind enough to return the favour. Once you have good working relationships in place, you may find you can defer work to the following month at busy times, if the client is happy to wait.
- Don’t work in your pyjamas!
It’s a bit of an ongoing joke that freelancers work in their pyjamas, and some days I admit it is tempting. But don’t do it! It’s important to adopt professional habits straight away, so that you will have the self-discipline required to work for yourself. You also never know when you might be called onto a video conference!