HOW TO STOP YOUR FREELANCE DREAM BECOMING A NIGHTMARE

Starting your own freelance business can be incredibly rewarding, however it is important to understand the risks. We take a look at the pitfalls and how to avoid the bumps along the road of being self-employed.

HARNESS THE GIG ECONOMY AND ENJOY THE FREEDOM OF BEING YOUR OWN BOSS

Becoming your own boss is an enticing prospect, but there are lots of things to think about before you leap into life as a freelancer and join the gig economy. This guide will help you make the right decision.

SO WHAT IS THE GIG ECONOMY?

Most commonly it’s associated with people who work through companies such as Deliveroo, Uber or Airtasker, going from job to job. This aspect of the gig economy doesn’t always get the best press and is often linked to low pay, long hours and limited rights. But the gig economy also includes highly skilled people who leave traditional employment to work as freelancers for several different companies on a project-by-project basis.

In the past, freelancing was treated as a way to tide you over between permanent jobs. During the global financial crisis, for example, lots of workers struggled to find permanent employment, so they took piecemeal jobs where they could find them. For some these ad hoc jobs gradually became more frequent and more lucrative, eventually becoming their permanent careers.

The explosion of internet and mobile platforms that support freelancers – such as apps that introduce you to clients, streamline your timesheeting and invoicing, help you find a shared work space and so on – has also made it a much more realistic long-term option for people eager to venture out on their own. In fact, conservative estimates suggest 40% of the workforce will be freelancers within a decade.

But deciding whether freelancing is right for you, requires a lot of thought.

BEFORE YOU DO ANYTHING, CONSIDER THE PROS AND CONS

First let’s take a look at some of the pros:

• As a freelancer you can work when and where suits you. You’re no longer chained to traditional business hours and can focus on when you’re most productive. Which is a way of working most companies can’t offer.
• It’s the spice of work, as well as life, for many. If you’re successful you’ll be able to regularly move between projects of your choosing, which suits those who get bored easily.
• It keeps parents in the workforce.Issues such as high day care costs and the mismatch between office and school hours, often prevent mums and dads from returning to work. But thanks to the flexibility of freelancing, parents can fit their work around their children’s schedules.
• Lower travel costs.If you work from home or a nearby office space you’ll no longer have to pay for, and endure, a lengthy commute.

Employing freelancers also has its benefits for companies:

• It gives them access to a wide talent pool of experienced, and in many cases, over-qualified individuals they may not be able to afford on a permanent basis.
• They can manage their cost base effectively by scaling their workforce up and down as needed, bringing in the right skills for a specific period.
• They don’t have to worry about keeping freelancers motivated and challenged in the long term.

But there are downsides to the freelancer life. You should consider these very carefully:

• Job and income insecurity come with the territory. There’s no perfect time to go it alone, you’ll always face uncertainty and risk. Work can be inconsistent – sometimes you have too much, sometimes not enough – this can cause stress and it pays to have savings to fall back on when times are harder. If you feel you need the security of a stable job and income for your financial and mental wellbeing, freelancing probably isn’t for you.
• You need to be self-motivated. Nobody but you is going to push you to meet a deadline. And nobody but you will get the blame if you don’t. Procrastinators should think twice.
• Your clients are very different to employers. You are no longer an employee, you’re essentially an external vendor. That means you’re held to account against key performance indicators, service level agreements and the deadlines mentioned above. Feedback isn’t going to be sugarcoated as it would be coming from your boss either.
• Freelancing can be isolating. The social side of work, being part of a team, is important for many. Working on your own can be lonely, which is why renting a desk in a shared office space is worth considering.
• You never clock off. Unless you set boundaries for yourself and stick to them, you’ll be answering emails in the middle of the night.
• Self-promotion is critical. Not everybody is comfortable shouting from the rooftops about how great they are but you can’t afford not to as a freelancer. You also need to be confident pitching your ideas and selling your services.
• You’ll lose employee benefits. Nobody will pay into a pension for you, help with your retirement planning, contribute to insurances or sort out and pay your tax. That will all be down to you and should be factored into the rate you charge. Don’t short change yourself.
• Unpaid work is part of the job. Time spent on networking, business development, marketing, administration, resolving IT issues and accounting can really add up. Again you should include this in the rate you charge.

YOU’VE DECIDED TO MAKE THE SWITCH, WHAT NEXT?

Start by laying the groundwork for your freelance career while you’re still in permanent employment. You can do this by:

• Doing your research. Know who your competitors are and find your niche.
• Taking on jobs alongside your full-time role. Transition slowly to part-time hours or take on pro bono projects that could lead to paid work and will build your portfolio. And don’t forget to network extensively while you’re at it.
• Prepare financially. You should save as much as you can to support you as you grow your business.
• Think carefully about how much you need to make each month and how you can realistically achieve that, remembering that it can take time to build up to a regular income.
• Practice your sales pitch on friends. Tell them why you’re an expert in what you do and why a client should use you over someone else.
• Consider contracting, it’s a good introduction to self-employment and will give you a taste of the risk involved. You probably won’t be working from home or to your own schedule when you contract, but it’s a valuable first step. Agencies can help you find an assignment and will often put you on a payroll, or you can invoice them through your own business.
• Write a functional resume instead of a chronological one. This groups and highlights specific capabilities by skill type rather than employer, so that a potential client can see exactly what skills you offer.

Once you start life as a freelancer you should update all your social and professional platforms to reflect that change, contact previous employers for referrals and, most importantly, network as much as you can. If the offers start flooding in (congratulations!) be prepared to turn any down that you don’t have the time or skills to complete – it’s vital you don’t damage your personal brand by letting people down, especially early on. Finally, make sure you put enough of what you earn aside to cover pensions, taxes and other insurances. Good luck!

FIVE THINGS TO REMEMBER:

1. You need to be self-motivated and disciplined.
2. Contracting is a good first step.
3. Work out how much you need to earn and build your savings.
4. Know what you are worth and how much to charge.
5. Network, network and network some more.