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Go Freelance The complete guide to starting freelancing by Leif Kendall at Freelance Advisor FreelanceAdvisor.co.uk The complete guide to Going Freelance... Darkest Before the Dawn 3 What the Hell Are You Doing? – Understanding Your Motivation Making the Leap – Knowing When the Time is Right Cash Cushion, How Much to Save? Moonlighting – Freelancing from the Comfort of Your Day Job Choices – Who are You Going to Be? Finding Work Websites, Agencies, Cold Calling Networking Your Website, Being Found on the Web – Search Engine Optimisation (SEO) Social Media Your Elevator Pitch Charging for Your Time – Setting Rates , Flexible Fees Teetering on the Brink, Ready to Leap Freelancing: A Way of Life 13 Choosing Your Location: Home Vs Office Home Sweet Office, Coworking Financial and Legal Decisions Ltd Company or Sole Trader? VAT Book-Keeping, Accounts and Organisation Why maintain records? Invoicing, Payment Terms and Cash-Flow Invoicing, Book-Keeping, Avoiding Problems, Contracts, Debt Chasing Happy Freelancing – Ideas for Ongoing Success Tracking your time – tools Getting Things Done To-Do Lists, Time-Boxing Life Vs Work Time to Relax, Health and Fitness IT – Preventing Nightmares Freelancing the Night Away 20 Loneliness, Bordom, Being broke Not Finding Work Not Getting Paid for the Work You’ve Done Where’s My Motivation? So, What’s it Going to Be Then? 22 Are You Ready to Leap? Darkest Before the Dawn So, you’re thinking about going freelance? Are you feeling that excitement, the fear, the adrenaline as you stand on the edge, ready to leap? You probably have a lot of questions – lots of uncertainties that you would like to address before you make a decision. Or, you’re here because you’ve already made the leap. You might have made a rash decision (don’t worry!), been freelanced (sacked) against your wishes or you might have just decided that the time was right. Whatever your position, it’s worth remembering that freelancing is not an easy way to make a living. Freelancing is demanding. It requires hard work, intelligent perseverance and the occasional stroke of good luck. Freelancing, For the Win! But, freelancing is increasingly popular because it’s empowering; putting you in total control of every aspect of your work. Want to choose your own path? Want to choose how you work, who you work for, when and where you work, and how long you work for? If you want to choose your life, choose your future and choose the way you live, you should probably choose freelancing. Understanding Your Motivation Why do you want to be a freelancer? If you don’t know, it’s worth considering what is driving you in the direction of freelancing. Some motivations are less positive than others, and some motivations suggest that freelancing isn’t the best option for you. Good motivations: • You want to improve your prospects • You want to pursue your own good ideas • You want control of your work • You want to be your own boss • You want to gain recognition for your work • You want to do the kind of work you love Bad motivations: • You hate your boss • You’re fed up of being punished for poor time-keeping • You’re keen to work less • You have no motivation • Freelancing sounds cool • You just want to earn more money Mixed Motivations Of course, you probably have a mixture of reasons for wanting to go freelance. You might want: more control of your work, to explore new fields, to make more money, and get away from a bullying or controlling manager. It’s worth reflecting on what motivates you to go freelance, to make sure you have good, solid reasons for making such a radical change to the way you work. Freelancing is not an easy way to make a living, so be sure to have strong motivations to power you through challenging times. What the Hell Are You Doing? Making the Leap – Knowing When the Time is Right Unfortunately, there’s no scientific method for assessing whether it’s a good time to go freelance. It seems to be one of those things that you just have to feel in your blood. And to some extent, you’ll never know unless you try. That’s the best way to think about the things you do prior to going freelance. You can start things now that should ease your conversion to freelance working, and minimise the risk of failure. Cash Cushion Freelancing might seem like a fast route to easy cash. Daily rates like £200, £300 or more can be very tempting. But as with everything in life, it’s a bit more complicated than just: [Working days per month] 20 x [daily rate] £200 = £4000! The reality is that in the first month you manage to find 6 days’ work. Which seems like a lot, especially after you’ve spent the other 14 days chasing those jobs. But in reality it means: 6 x £200 = £1200 If you consider that to comfortably allow for accountant’s fees, expenses and tax, you should put aside 25% of your earnings, you’re left with: £1200 – 25% = £900 Then, you have to remember that if you land your work near the end of the month, even if you invoice immediately, and only offer short payment terms, you’ll still be without any incoming cash for that month. Clearly, if you want to go freelance, start saving! The more cash you can put away, the better protected you’ll be against things like: • A slow start • Slow-paying clients • Unexpected hiccups like injury, illness or losing your mojo. Minimising Risks £ Save as much as you can. How much do you need to survive? If you don’t know, work it out. Calculate everything you have to spend in a month. Things like: • Rent/mortgage • Bills • Food • Debt repayments • Child support • Fuel • Insurance • Travel The total of these unavoidable expenses will be your survival budget. It’s the minimum amount of money you’ll need to survive each month. Many people suggest saving three month’s worth of survival budget. In reality, many people would take years to save that much money. And you probably want to go freelance before you retire, so a less substantial survival fund may have to suffice. Being Broke Can be Very Motivating It’s also worth considering that having a big pile of cash behind you may weaken the impetus to search for work. If you have a small amount of cash, perhaps just enough to last you a month on basic rations, you’re going to be highly motivated to find work. Moonlighting – Freelancing from the Comfort of Your Day Job Moonlighting means working two jobs at once. If you want to start freelancing, you don’t need to quit your job. Just start freelancing. Obviously you’ll have to restrict your freelancing to the times when you’re not already employed, but there’s no reason why you can’t find clients now. Moonlighting is a great way to improve your chances of finding enough work once you leap into full-time freelancing. How Much to Save? Finding work Moonlighting lets you: • Build a network of clients • Set up your business identity • Develop a portfolio of work • Understand what works and what doesn’t • Discover areas that you need to work on • Earn additional income (perfect for building your Cash Cushion) • Try before you buy. Is freelancing really for you? • Get known as a freelancer. Choices – Who are You Going to Be? Will you be you, or will you be a brand? Will you be Tom P Quigley or Tompq Ltd? Before you make a decision, consider how a particular identity will affect: • Website domains – is the domain available? • Branding – how will it look on business cards, letter heads etc? • Recall – will anyone remember you? • Longevity – is it a name that can adapt with you? Finding Work Freelancing means a regular cycle of finding and losing jobs. Successful freelancers are constantlylooking for work – something not everyone has the stomach for. So, you’re up for the fight – now where do you look for work? It’s wise to try everything in the hunt for work. Different things work for different freelancers. Try to use a broad mix of techniques – never rely on one source of work, because you’ll be exposed to the risk of that source drying up. Freelance Advisor Jobs To help you find contracts we’ve created a jobs page on the Freelance Advisor website. Head on over to FreelanceAdvisor. co.uk/jobs and you’ll find plenty advertised. Websites for Finding Work For every industry there are websites that unite freelancers with employers. Search for the ones that are relevant to you. Here are a few to get you started: • www.people4business.com/ • www.guru.com • www.noagenciesplease.com • www.peopleperhour.com Recruitment Agencies Speak to a recruitment consultant or two. Get on the books of any agency that is relevant. A few suggestions: • www.profilescreative.com • www.xchangeteam.com Cold Calling Not just the preserve of double-glazing salesmen, cold calling can be the perfect way to start a relationship with new clients. You could send people emails, telling them that you’re available for work, but they’ll probably put your email with all the others, in the Trash folder. Calling people takes more time, requires more effort, and it shows more determination. Many employers prefer a polite, friendly, concise and purposeful phone call to a bland, standard email that you’ve clearly sent to everyone else. We’ll help you find work Networking Networking doesn’t just mean organised events with people in suits. Here’s a much more useful definition of networking: Networking: verb – to create, develop and utilise the network of friends, colleagues and contacts that you have. All kinds of social engagements are potential networking opportunities. Always carry business cards and always talk about what you do. But don’t just say “I’m a programmer” or “I’m a graphic designer” – give examples of what you do. Help people to make sense of what you do. If someone doesn’t understand what you do, how can they ever recommend you? When you’re networking, listen to what people say. Think about what they do, see how it fits with what you do, and look for ways that you might work together. Always look for opportunities to be helpful to people. *See also: Your Elevator Pitch Networking Events Search for networking events in your area. Try a few. If you feel uncomfortable talking to strangers, or trying to sell yourself, remember that it gets much easier with practice. Before long you’ll be an unstoppable schmoozing machine. For a list of the latest freelance events (or to add your own) go to freelanceadvisor.co.uk/events/ If you don’t have a website yet, get one. Having a website allows you to: • Be discovered by anyone • Display your portfolio • Feature evidence of your work & skills Websites can be created cheaply and quickly with blogging tools like WordPress. If you can’t afford to pay for a website, try making your own (there are plenty of online tutorials on DIY website building). If the thought of making a website is too scary, why not swap skills with a friendly web developer? There are plenty of developers in the Freelance Advisor network and if you have a website or not you should use your Freelance Advisor Network profile as another way to advertise yourself and your work. Being Found on the Web – Search Engine Optimisation (SEO) If you don’t know anything about SEO, it’s worth doing a bit of research. Your website can be a useful way to find new clients, but it won’t help you if nobody finds it. Search Engine Optimisation ensures that search engines interpret your website in the way you want – which in turn ensures that searchers can find you. Social Media There are a host of social media websites which allow you to create profiles and to connect to clients, contacts and the people you would like to work with. Use them – but remember to maintain a professional image. Every message, blurb, picture or comment you post can lose you work. Always remaiim positive, professional, polite and friendly. Try: • network.freelanceadvisor.co.uk • LinkedIn • Twitter • Facebook • FriendFeed Your online presence Your Elevator Pitch Your Elevator Pitch is a summary of what you do. It’s concise enough to be delivered during a short elevator ride. It’s the quick way of telling people what you do – the way you’ll soon be telling friends, family, acquaintances and business connections about your work. Before you start networking, work out how you will explain what you do. You may want to have two versions of your elevator pitch. One version for potential employers (which assumes some prior knowledge) and one that’s better for random people who might not know anything about your industry. A good elevator pitch doesn’t just say what you do; it says why you’re useful to your clients. Try to mention the benefits that your clients derive from you. A bad elevator pitch: “I’m a graphic designer.” A good elevator pitch: “I’m a graphic designer – so I help businesses find the best way to appear to their clients, and take care of things like logos, adverts, packaging, posters, signs and basically anything that needs to look great.” Charging for Your Time Setting Rates How much are you going to charge? What is the going rate for someone like you? It’s easy to find out. Try: • Check a few of your competitor’s websites. Do they display their rates? • Ask an agency. They should have a good understanding of typical rates. • Call a freelancer and ask them. Get an idea of what people are charging, and charge something comparable. If you’re starting out, and don’t have years of experience, it might be appropriate for you to charge at the lower end of the pay spectrum. Increase your rates as your experience, skills and knowledge grows. Flexible Fees Many freelancers have multiple rates. Sometimes it’s worth working for a lower rate if the work is interesting, charitable or good for your portfolio. On the other hand, some projects are unpopular and unappealing – so charge more for the inconvenience. It often pays to ask a client what their budget is before you discuss rates. Once you know what they can spend, you can decide whether it’s enough. Teetering on the Brink, Ready to Leap Okay, so we’ve looked ways of minimising the risks of leaping into freelancing – you’ve accumulated a cash cushion, been busy moonlighting, networking and expanding your presence on the web. And now, what do you do? Remember: only you will know when the time is right. You will know when it’s the optimum time to make the change to freelancing. In the next section, we look at things you’ll need to consider to continue freelancing successfully. Freelancing: A Way of Life So you’ve made the decision – you’ve quit your job and are counting down your final days of regular employment. Congratulations! Now the rewarding business of being a freelancer can begin. What follows are suggestions of things you might want to consider as your freelance career progresses. Choosing Your Location Home Vs Office When you’re starting out, you’ll probably be intent on minimising expenses, which means you’ll be working from home. If seeing the same four walls starts to drive you nuts, make a break for it, and try working: • In a nice café • In a park • In a coworking space • In a friend’s house (if they’re out all day, why not?). Home Sweet Office Working from home can be lovely: you can work in your pants, munch on toast, eat like a king, fart without consequence, and listen to obscure Danish hip-hop at whichever volume suitsyour mood. On the downside, working from home can be lonely, distracting, unproductive and depressing. It doesn’t suit everyone. If you’re going to work from home, devise a strategy for making sure that you: • Get things done • Communicate with other people • Get out occasionally. Coworking Home Vs Office Coworking is a relatively new concept – it began as a way for freelancers and entrepreneurs to find convenient places to work and people to work with. If you’re lucky enough to have a coworking space near you, give it a try. The benefits of coworking include: • You get colleagues! • Coworking spaces feel like places to work in • You separate work from home • Minimal costs • Flexibility – drop in when you want • Collaboration – coworkers are potential partners • Networking – coworkers are also potential clients • New scenery – a new environment can kick-start your motivation. Financial and Legal Decisions Ltd Company or Sole Trader? This is a key decision, and one you should make after evaluating the options. Try to speak to other freelancers in your industry. Ask them why they chose to be the type of business that they are. Both options have benefits and drawbacks. Understand all the implications before making a decision. Ask an accountant for advice, and see how this compares to what you’ve learnt quizzing freelancers. VAT Once you start invoicing over £67,000 in the course of a year, you’ll need to register for VAT. This means that you become a VAT collector for the government – collecting VAT every time you invoice a client. You’re allowed to offset the VAT on your purchases – paying the difference to the government each quarter. Some freelancers choose to register for the VAT flat-rate scheme – which allows you to offset the VAT on your purchases, but means you have to charge your clients VAT. Ask your accountant if the flat-rate VAT scheme is right for you. Book-Keeping & Accounts Book-Keeping, Accounts and Organisation Freelancers are not just the dynamic operatives that they seem to be. Under every good freelancer is a solid organisational foundation. You should always maintain an ordered enterprise. Why maintain records? Book-keeping doesn’t exist just to provide dull people with jobs. Without accurate book-keeping you’d struggle to know if you’d made a profit – or how much. Without knowing your sales figures, profit and how your profit compares to sales – you can never know what can be improved. Invoicing, Payment Terms and Cash-Flow Finding work is just the first step in your ongoing battle to maintain financial solvency. But let’s assume that you can find work and carry out the work with success. Now, you might think it’s time to get paid. Well, it is, if you’re lucky. Before you get paid you’re going to have to invoice. Invoicing Tell your clients when you will be invoicing them. And when that time comes, send the invoice. Never delay sending invoices, because it will delay when you get paid. If you raise invoices on project completion, make sure invoicing is on your task list. Always invoice as soon as you can. Book-Keeping Without a system for recording your invoices, it’s easy to forget that someone hasn’t paid you. You will need every penny, so make sure nothing can ever go unpaid. Accounts software can be very cheap – but even a simple spreadsheet can ensure you don’t miss a thing. Payment Terms You can decide whichever payment terms you like. Whether or not your clients accept them is another matter. Some companies insist on payment after 30 days, regardless of what you want. So you may have to be flexible, or change your terms depending on the client. Freelancers often demand shorter payment windows because they have to protect their cash flow. The death of many a business – cash flow, or the lack thereof. This is one of the biggest things that you’ll need to monitor as a freelancer. You may be busy working, you may be invoicing vast sums for awesome work with fantastic clients, but if cash isn’t flowing into your bank account you could soon end up cashless and desperate. Avoiding Problems Discuss your payment terms with clients before you work with them. Tell them when you will expect to be paid, and ask them to confirm that your terms are acceptable. It may feel awkward to discuss payment terms, but your clients will respect you for having the foresight to ask before it becomes a problem. If you suspect a client might be troublesome, ask for payment in advance. Or ask for a 50% deposit. How you work is entirely up to you. Contracts The best way to avoid disputes with clients is to have a written contract which details every aspect of your working relationship. With a contract there is less room for ambiguity and any disputes that arise will be easier to settle. Debt Chasing If invoices go unpaid, don’t be shy about chasing your clients for payment. A polite enquiry will often be enough to jog someone’s memory. * See: Not Getting Paid for the Work You’ve Done Cash Flow Freelancers are effectively small businesses. And like any small business, they need a lot of effort to keep them running. In this section we’re going to look at a few factors that may influence how happily you operate as a freelancer. Tracking your time – tools If you’re charging people for your time, it’s sensible to keep track of the time you spend on projects. Various tools are available online, such as: • Slim Timer - http://slimtimer.com/ • Bubble Timer - http://bubbletimer.com/ Getting Things Done For freelancers, getting things done is crucial. If you don’t finish a job, you probably can’t raise the invoice. And as we’ve already noted, your cash-flow is something you need to watch closely. To-Do Lists Sounds obvious, but to-do lists are worth returning to if you’re struggling to get things done. Try a nice web application, such as: • http://www.todobedobedo.com/ • http://www.rememberthemilk.com/ • http://www.tadalist.com/ Time-Boxing Once you’ve created your to-do list, you need to think about what you’re going to do and when. Schedule tasks in a diary (whether online or the paper kind). If you can resist the distractions of home or the internet, try working in 5 or 10 minute time-bursts. Set a kitchen timer and do nothing but work for a set period of time. And sometimes it helps to reduce distractions: • Switch off telephones • Turn off Google Chat/Skype/Twitter applications • Turn off your email • Turn off the Internet completely Happy Freelancing - ideas for Ongoing Success Most freelancers are unusually happy people – ask anyone who has escaped the tyranny of the middle manager, the 9 to 5, the cubicle, the commute and the soggy sandwich, and they’ll tell you that freelancing is working that you can look forward to. But, as much as you might enjoy your work as a freelancer, and as much as your work and life may blend into one pleasurable mix, it’s going to be important for you to retain some separation of work and life. Time to Relax It’s worth setting boundaries between your work and home lives – to make sure that both aspects of your life get a chance to breathe. If you don’t have rough working hours, you may be tempted to work later and later. Also, if you don’t plan holidays in advance, you may never take them. Health and Fitness If you ever find yourself all in a muddle, your head spinning full of ideas, schemes and advertising jingles, unable to concentrate, unable to sleep, unable to get things done – you may need exercise. Exercise resets the body’s stress clock – allowing you to release whatever stress you’ve been keeping inside. Whichever exercise you prefer, try to get out of breath (providing your health allows). Life Vs WorkBack-up your data. Imagine your computer died right now. What would you lose? How much of your data would be lost? How much of it is stored elsewhere? How would you explain to your clients that you hadn’t taken back-ups? Getting into a good backup habit now might save you a major frustration in years to come. Where did I leave that file? As well as external hard drives, you may want to consider: • http://www.getdropbox.com/ • http://www.humyo.com/ Online storage means you can access your data from any PC – perfect protection against fire and theft. There are also a range of ‘portable apps’ which you can carry with you on an externalo drive, applications like OpenOffice, the Firefox web browser and Thunderbird email client are all freely available and can be used on any computer. Consider using online applications like Google Documents and Dropbox, that way you know you’ll have a secure off-site backup, easy access from anywhere in the world and the ability to collaborate on documents with anyone at anytime. IT – Preventing Nightmares Freelancing the Night Away So – you’ve made the leap. Things are going well, but everything isn’t quite the fantasy you had in mind. Let’s look at some of the ongoing challenges you face as a freelancer. Loneliness Cut loose from the corporate mothership, you no longer have the watercooler to gather round, or the over-the-cubicle-partition gossip sessions, or the inter-company emails about toilets that won’t flush and biscuits gone AWOL… a blessing? Well, yes and no. You may be saved from predictable tedium, but you’re also missing out on some valuable socialising. Save yourself from loneliness by: • Finding local freelance organisations. If one doesn’t exist near you, create it. (See Brighton’s Farm as a model) • Networking with abandon. Don’t just make contacts; make friends! • Coworking. Bored Before you get bored, try varying your work setting. Try working from a different part of your house, or get mobile! Leave the house and work wherever you can. If one particular task is boring you, try leaving it alone for a while. Get up and go for a walk. Go see a film. Stop being bored. Life is too short. Broke Poverty can strike for a number of reasons: • Not finding work • Not getting paid for work done If you’re just not getting enough work in, it may be because you’re not doing enough marketing. Not Finding Work One option is to find temporary work or a part-time job while you build up your client base. Find a reliable source of steady income, and increase your marketing efforts: • Cold calling • Networking • Web-marketing (SEO) • Social Media marketing (Twitter, Facebook etc) It’s important to remember that you may need time to establish a client base. Be prepared for this to take months. Be patient, and try to have fall-back options in case of emergency. Not Getting Paid for the Work You’ve Done If your clients are delaying payments, get more organised. 1. One week before invoices are due, call the client to politely remind them that the invoice is nearly due for paying. Ask them if the invoice is okay, and if they are happy to pay you on time. 2. One day before invoices are due, call your client and politely ask if the payment will be made on time. 3. If invoices remain unpaid after the due date, send a statement or a payment reminder. Try calling your client and politely explaining how important prompt payment is to you and your survival. 4. If your clients continue to give excuses, try employing a company like Thomas Higgins & Co (http://www.thomashiggins.com/) to send a letter to your client (for a very small fee). 5. If a formal letter is not sufficient to extract payment, companies like Thomas Higgins & Co can escalate the case to court action. If you are worried about losing a customer, consider the value of a customer that doesn’t pay you. Generally, if you have lots of problems with late payment, try asking for a 50% deposit at the start of a project. If you can, ask for 100% up front. Consider your invoicing process – is there anything you’re doing wrong? Never give clients an excuse to not pay. Make sure you follow clients’ invoicing terms and conditions, and include Purchase Order numbers if they’re required. Guaranteed Payment Another good option is to use a service that guarantees payment. We recommend People4Business people4business.com/ who guarantee payment for all contracts gained through their site. If you find yourself struggling to do essential tasks, try changing: • Your location • The task • The way you work. E.g. race against a clock, or work with a partner, or listen to a new kind of music while you work. If you really can’t bring yourself to get things done, and knowing that if you don’t work, invoice and bring in cash you will quickly lose: • Your social life • Your partner • Your home • Your pet(s) isn’t enough to drive you onwards, it’s probably time to ask yourself: am I in the right job? Freelancing isn’t for everyone, and if you can’t motivate yourself, you may need a manager and a corporate structure to keep you in line. So, What’s it Going to Be Then? We’ve covered a lot of ground, and considered many of the aspects that will affect your life if you go freelance, but has it been enough to help you make a decision? You should only go freelance after careful consideration. It’s not an easy way to make a living, and there are no guarantees that you’ll make money. If you decide to go freelance, plan an escape route – an alternative way to make money – just in case it doesn’t work out. Freelancing is a hugely rewarding way to work – but it only rewards those who work hard. And to be a successful freelancer you will need to work hard at many things beyond the thing people pay you for. You’re going to become the marketing, sales, accounts, management and admin departments. The rewards of freelancing are rich and varied. Freelancing is a bit like leaving home – it’s a time to stand up as an independent person, responsible for your own life, taking charge of your destiny and creating your own future. Whatever you choose, good luck! Where’s My Motivation? Free Freelance Advice We really hope you’ve found this guide useful. The content was put together by a talented freelancer - one of the major contributors to the Freelance Advisor website - and is typical of the kind of advice we continue to publish online every week. Freelance Advisor is your resource for the most up-to-date freelance advice, news and views - it’s written entirely by freelancers and contractors working in the trenches and we invite you to join us... www.freelanceadvisor.co.uk ADVICE PODCASTS EVENTS JOBS NETWORK Produced by the team at FreelanceAdvisor.co.uk Author: Leif Kendal KendallCopywriting.co.uk
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