Thinking about going freelance? Freelancing can be an amazing way of working and extremely rewarding but it isn’t always easy. I’ve been freelancing for around six years now and while I wouldn’t have it any other way, it can be difficult at times. In the beginning it was just a little extra income, we didn’t rely on the money. But now, my income is needed to pay our monthly bills so the pressure definitely turned up a notch.
Read on for things you should definitely consider before going freelance…
1. Clients don’t always pay on time
So you’ve done the work and sent your client an invoice. Your payment terms are 30 days so you’re assuming you will have that money in the bank before your mortgage payment goes out. Wrong. Late payments happen far more often than they should so you need to allow for this. I like to have a savings pot that I can dip into in case of late payments.
2. There will be quiet periods
There will be months when things don’t go well and you haven’t earned what you usually would. You can reach out to regular clients and pitch some ideas, but you have to accept that some months might not bring in as much money as they usually do. As I mentioned earlier, this is where you will need a savings pot to dip into when needed. It’s not like a regular job where you can guarantee your wages will be in your bank account on a given date.
3. Hire an accountant
A good accountant is invaluable to a freelancer. Keeping a track of finances and completing your tax returns is not easy and can definitely cause stress. A good accountant will deal with all of this side of things for you, leaving you free to focus on your work. An IR35 accountant will navigate this complex tax legislation on your behalf, dealing with insurance and any investigations that may arise.
4. Be patient
Give yourself time to get up and running. Don’t expect the work to start flooding in straight away. It could take months or even years to draw in regular clients and generate the income that you need. It might be a sensible idea to stay in your day job for a while, until you are are sure you can make freelancing work.
5. It can be stressful
As I mentioned before, freelancing isn’t always easy and it can be stressful at times. That could be because of cashflow, or just simply because you have too many deadlines approaching. You will learn over time what works for you and your work, but try not to take too many jobs on at once. Give your clients realistic timescales.
6. Be consistent with your pricing
Without a shadow of a doubt, you will get some very low offers for paid work. When there’s not much work around it can be tempting to take these offers but it is always best to stick to your pricing. Value yourself and your work.
I hope this post has been helpful if you are considering going freelance. I 100% recommend it but you need to think it through carefully. Money management is key with self employment. If you have any more advice to add, please leave a comment below.
Thank you for reading.
