What do you need to know about working as a freelancer?

If you freelance, then it means that you are self-employed and take jobs in the so-called gig economy on an ad hoc basis. A freelance career can be extremely rewarding and offer you many advantages over a normal job. For example, you will have no direct employer who expects you to work certain hours of the week. To freelance, therefore, means having greater flexibility than you would get as an employee of a company. Freelancers can choose their own hours. A freelance worker can choose where they will work in many cases, too. Furthermore, most freelance professionals find that they are able to pick and choose which sort of projects they will do, especially once they establish themselves.

If all that sounds appealing, then why not consider a freelance career? You won’t need to have experience of running a business to get going. Most freelancers get to know how the job works as they progress. Don’t be put off starting your own freelance project because you have not been in the driving seat before. Although nearly all freelancers make mistakes here and there, they also learn from them. The same is true of anyone who runs their own business, large or small. If you are considering taking the plunge and quitting your job to become someone who freelances for a living, then read on

What defines a freelance business?

Most freelancers have some sort of professional skill which they hire themselves out for. You could be a tradesperson, such as a plasterer or a plumber, and operate as a freelancer. However, in most cases, freelance businesses tend to involve a professional service which is sold at an hourly rate or by the job. As such, successful freelancers tend to be lawyers, graphic designers, writers, photo journalists, web developers, social media moderators, architectural designers, marketing executives or translators. What marks out a freelancer from another self-employed person is that their work tends to be sold piecemeal which means, it is often time-limited but repeated frequently.

Rather than delivering a whole commercial project, a freelance worker will often carry out functions which another business require extra capacity to complete on time. For example, a new marketing brochure could be put together by a company by sub-contracting each element. The graphic design, sales copy and marketing concept could all be delivered by freelancers who never even meet one another before the brochure is finalised and sent to the printers. That said, you will also find freelance gardeners, bricklayers and people who do other manual jobs. So long as they don’t undertake long-term contracts, such people often consider themselves to be freelancing even if they don’t provide a professional service of any description.

Setting up a freelance enterprise

Whether you want to sell your copywriting, translations, design work or other skills on the open market, the first thing to decide is whether you will be a part-time or a full-time freelancer. If you are unemployed already, then you may as well go for it and commit full-time. However, consider the merits of getting your freelance project off the ground while you stay in a job. This is because it takes some time to build up a freelance enterprise and your income could be low for months – or even years – until you fully establish yourself. Retaining a job, even on part time hours, allows the financial burden of starting out to be spread out a little. Eventually, the time will come when you cannot complete you freelance work on the hours available to you. At this point, you should consider quitting your job to become a freelancer on full-time hours, of course.

Once you have established on what basis your freelance enterprise will work and the hours you will commit to it, then next thing is to obtain your first client. You may know people already in your chosen field of work who might sub-contract work to you. This is a good option. Freelancers always need to hustle a little to get work so don’t be afraid of calling up an old colleague at a former employer and simply asking if any freelance work is available.

Another good way to get your first job as a freelancer is to look for adverts that are regularly placed on freelance sites. Many newcomers to this sector of the economy get their first freelance jobs via a website which acts as a broker between service providers and those seeking them. Sure, the business owners of such freelance websites take a cut of your earnings but it means being able to start generating revenue. A site like Fiverr, for example, may only offer low sums of money for work but each job should be short which allows you to make a decent hourly rate. As your name gets known and your skills increase, so you will need to rely on such job board sites less and your per-project rate should also go up.

Establishing yourself as a freelancer

No matter what sort of service your provide for each project you complete, you must continue working to establish your name and reputation in your industry. As the old saying goes, you are only as good as your last job. Maintain high-quality work, just as anyone involved in self-employment should. Remember that your clients may know one another and make recommendations about the freelancers they use for particular jobs. Word-of-mouth recommendations can be invaluable to anyone who hires themselves out.

That said, freelance sites are not enough on their own to really build a successful career on. You will need to market yourself and that means building your own website these days. Like any independent contractor, a presence on the internet is essential to freelancers of all kinds today. A simple website can be built for a minimal annual charge even if you have no experience as a web developer. In some cases, you can even start a small website free of charge so long as you don’t mind adverts popping up on screen. Many web builder sites have all of the graphic design elements included, so you don’t need any expertise in web design at all.

Without your own site, you are not really working as a freelancer and you have no convenient place to showcase your work to prospective customers. Bear in mind, also, that to establish your own website, you will need to update it regularly with new content so that you rank well for people searching for the sort of services you offer. A freelance website, therefore, is an ongoing project not just a one-off process to go through.

The importance of company record keeping

As a freelance enterprise, you will usually operate as a sole trader. This means you don’t need to register your business with Companies House, for example. However, you will need to inform HMRC of the fact that you have become your own employer. To do so, all you will need to do is to register online for self-assessment tax returns. Although the thought of filing their own tax returns puts some people off, it is not hard to do with a simple freelance commercial model. To begin with, all HMRC will need to know is when you started as a freelancer even if you did so whilst still in a job.

You have until the January following the end of a financial year to complete a tax return online. Register beforehand so you have your unique tax reference number which will be different to your National Insurance number. As an independent contractor, HMRC will expect you to have basic accounts prepared that determine how much money you made in the previous accounting period. Keep a track of every sales invoice you have had paid by customers. On top of this you will be allowed to account for purchase invoices you have forked out for so long as they directly relate to your business. For example, you could claim the cost of setting up a website as a legitimate business cost. You cannot claim for all the costs of your mobile phone, however, unless you only ever make business-related calls on it.

A great way to stay on top of your accounts is to update a spreadsheet of all your incomings and outgoings at the end of each week. Since most freelance projects last no longer than a week, this should mean you account for all of the financial side of the business and can, therefore, do your own tax return without needing to pay for an expensive accountant to do it for you. On-the-go bookkeeping is so much better than trying to sort everything out a year down the line when your tax return is due.

Who owns a freelancer’s copyright?

Any project you complete – whether it is a photo shoot, a copywriting text or a professional report – is yours unless you specifically have a contract that says otherwise. When you are working in the field of intellectual property, it is the producer of that work who retains ownership of it. Employees, who are paid by the hour rather than by each project they complete, don’t own their work. If you want to retain ownership of your work, then make this clear to the business that is buying it.

In many cases, of course, companies want exclusive rights over what you have produced so you may need to sign away your rights when payment is secured for your work. Don’t be surprised or affronted by this. Many freelancers’ customers want exclusivity. If so, then you cannot sell your sold work on again to other parties, even if you adapt it somewhat. However, if your customer fails to pay or decides they don’t want your work after all, then you are free to sell it elsewhere without needing to seek permission to do so.

Your start-up freelance checklist

• Work out what service you will offer clients.
• Decide how many hours to devote to a freelance career to help maintain your work-life balance.
• Write a business plan that sets out your goals and strategies.
• Use freelancing websites until you establish your business.
• Set up your own website to market yourself.
• Keep proper financial records.
• Head to the HMRC website to register as a self-employed person in advance of filing a tax return.
• Enjoy the freedom of working in a way that suits you but remember that successful freelancers are reliable ones who deliver for their customers on time.