Estimated reading time: 3 mins
When you decide that you want to break out of the office and start making some significant changes you might be tempted to throw caution to the wind and hand in your notice without the rest of the plan in place. Don’t so that… Well, you can, but it would be to your benefit to read this first.
You are going to be the person in charge of everything, from getting clients and delivering work to presenting the work, and your own contract management too. Your taxes, although you can hire an accountant, your workload, and everything in between, and if it sounds like a lot already, then you are right. But over time you get into the right flow and work becomes steady and exciting but you have to get there first, and those are the tips that we are going to talk about today.
Oh yes. You have rent or a mortgage, you have bills, you might have children and other financial commitments. And, while the prospect of going freelance might sound impressive, you need to make money while doing it, and those first few months can be tough if you don’t have clients already lined up and ready to go. So the best thing that you can do is start saving money now.
You are ideally looking to save enough money to cover somewhere in the region of 6 months of the essentials – which are the things mentioned in the very first sentence. It might seem like no one does that, but many freelancers are lucky enough to have someone at home that earns enough to cover most things. But we are all one paycheck away from losing what we have. So, make it easier on yourself and save as much as you can.
You will love the financial buffer when those clients aren’t coming in thick and fast.
It is time to take the big jump. You have everything ready. So start out as a side hustle. Work it along with your fulltime job. Yes, at the same time as saving! You will then have time to secure clients, to get a work situation in place – for example, if you are going freelance because you want to do the school runs, or be around for coffee meets with friends – then take all of that into consideration. Network like you don’t have a full-time job to keep you going.
You are going to need to know what you need to make before you set your fees. Many freelancers hit the ground running, undercharge, get a lot of work and in the next few months struggles to up their prices and retain their clients. So price yourself well from the off. Too high and you will struggle to find work, too low and you aren’t going to cover your bills. A great way to look at it is to work backward. What do you need to earn per month? How can you break that down in products, packages, and services?
You will need to make sure you are registered with all the relative bodies. You can’t earn money as a freelancer and not pay taxes and VAT (if you are required to). Unless you are starting a business with a friend, in which case you might be able to share the load. In most cases, you are going to be on your own handling all of that. So make a few phone calls and get advice and information on the best legal setup and the costs involved with registration, insurance, and licenses.
If you have made it this far, in real life, not the article, then the chances are you are doing well enough to quit your job now. It takes a specific type of grit and confidence to be successful as a freelancer. Because the days can be long and lonesome, the work can be tough, more so when you have no one to lean on. Much of your money will go back into the business, and you will get no congratulations when you do something well from a manager. You need to be ready to give yourself a talking to when you mess up, and you need to even discuss a pay rise – but with yourself. Self-reliance is a skill that you will learn over time, and when you really start catching the big fish clients – learn how to outsource.
Be careful with your money at all times. Just like any business you can make a big one month and make nothing the next. So keep a little nest egg tucked away for rainy days.