Surviving as a Freelancer is challenging and probably you know that even before you start it. Here are a few things to keep in mind when you plan out to start your living as a freelancer. Before you start, it’s critical that you take a step back, analyse your current position, hone up your skills so you stay an edge over the stiff competition.
Below are a few steps that can help you prepare for what is coming up as a freelancer life:
Stick to a blogging schedule
If you’ve set up a blog you should try to make a plan or schedule so that you can keep on track with it. The best blogs are consistently updated. Blogs that end up failing are usually unorganised with sporadic posts that eventually lead to a forgotten blog. It’s good to have a few ideas already noted down so you don’t run out of them when you need fresh content.
Get social media savvy
You have a lot to learn over your first year as a freelancer, particularly the role of social media in your marketing plans. During your first year you can afford to experiment a bit with different platforms and find what works most you.
Eventually you should try to settle on one or two that work best for your business. This means that they’re where your target audience is, where you’re getting the most engagement and website traffic from. It’s also important that it’s a platform you like being on. If it’s just another business chore, then your followers will most likely pick up on that too.
Keep on top of your finances
In your first year, you’ll still be finding your feet but it’s best to get your finances in order as quickly as you can. You might find it useful to use a bookkeeping software to track your finances and input income and expenses.
You don’t want to be caught out when tax deadlines come up . Make sure you’re always setting aside a percentage of your income for taxes so that you don’t get lumped with a big bill that you struggle to pay. You should be aware that the current way of doing taxes is changing with the government’s Making Tax Digital scheme which will see businesses moving towards doing quarterly accounts as opposed to one at the end of the year.
Many freelancers also set aside a small percentage of their income for an emergency fund. Freelancing can be very unpredictable so it’s important to be able to cover quiet periods where the work dries up a little. Also be aware that because you’re working for yourself you don’t get holiday or sick pay. You’re going to have to cover this yourself which usually means you need to be charging higher fees than you think.
Stay firm on price
Every freelancer comes across this moment in their career when a potential client either asks to pay a much lower rate than you quote or even asks for free work. It can be tempting to give in, especially when you’re starting out and you’re struggling to find clients. Whether you choose to do it is up to you but try not to get in the habit of it. It’s no way to build a business and you’ll end up feeling less confident about charging what you’re worth.
One of the most difficult parts of working for yourself is keeping on track, especially if you’re working from home. It’s so easy to let the day turn into a jumble of work and watching TV or doing housework. You might feel like you’ve been busy but then take a look at the work you’ve done at the end of the day to find that you’ve not made much progress.
The best way to tackle this is to set strict working hours for yourself, like you would have in an office job. You don’t have to work 9-5 if that doesn’t work for you. Maybe you work better in the mornings or evenings, maybe you need longer breaks. It’s up to you to find your best pattern of working and then stick to it. This might also mean having a word with friends or family who think you’re “free” when you’re actually working.
Remember that freelancing is no easy task. There will be ups and downs. Those who make a success of it keep moving forward and don’t let bad luck or mistakes stop them from building a business.
Remind leads that you exist
Christmas isn’t generally the best time to be hustling for new work – your excellent pitch could get lost in a flurry of New Year emails. But there’s no harm in reminding people that you exist, and what better excuse than in the name of spreading a little bit of seasonal cheer? A Christmas card or warm email to clients past and present is well-appreciated, and helps you stay on their radar, even if you’re not currently working with them. And if there is someone you’d love to work with next year, there’s no harm in dropping them a friendly card or email too. It’s a positive gesture and helps you stand out. Just make sure you remain genuine and not spammy.
Plan in advance
It’s vital for freelancers to start thinking about the festive period in advance, in October or November, or even sooner. Even with all the best intentions in the world, this is the time of year when things can unintentionally slip. Know who you need to invoice and when, and consider communicating with clients about invoicing them earlier, pre-December, to ensure they pay you in time and you have enough cashflow over the Christmas period. It’s easy to be so distracted with other elements of running a business at this time of year that you miss following up an invoice, which could mean an unwanted gap in payments – and with your clients distracted and busy too, it can be a perfect recipe for festive stress.
Another advantage of planning in advance is that, if appropriate to your business, you can consider offering festive special deals. This could be a useful way to win new business – not just for Christmas but into the new year as well.
Use the lean time
As mentioned above, sending the best pitch of your life at 5pm on Christmas Eve might not be the best idea you’ve ever had – but there’s no harm in using the slow time around the festive period to prepare for launching into the New Year full-throttle. If you get bored of watching television and polishing off the Celebrations that nobody wants, it’s an ideal time to set some goals, evaluate whether your website or portfolio could do with a spruce up, or think of some angles with which to approach the clients of your dreams.
Do take breaks
Freelancing means, theoretically, you can set your own hours and work from anywhere – which is brilliant. It does mean, on a practical level, that sometimes you’ll be working at times when you rather wouldn’t, as while you have control over your own schedule you don’t have control over other peoples’. This year I’ve enjoyed taking the odd morning or afternoon off, and the freedom of setting my own hours. It’s easy to feel as a freelancer that you need to be constantly hustling, but you need to make time for yourself. You could even consider deleting email from your phone, if you feel brave enough.
Christmas is a time for celebration, but lonely time for many. When you work in an office you enjoy communal festive spirit, office parties featuring dubiously-flavoured Baileys, and meals with co-workers and contacts. Working for yourself, you might miss out on this, especially if your office is your home. If you know any other freelancers, team up to have a joint Christmas party, and get everyone to bring someone along to maximise the networking opportunity.
Prepare before you go full-time freelance
First, you need to plan how you will get through the beginning stages of your business where you might have NO income coming in at all.
My advice would be to freelance on the side of your day job for a while before you quit your job. This will allow you to build up contacts, testimonials, and clients and ensure that you’re bringing in income right from the first month after you quit your job.
Figure out what your basic living expenses are
To figure out how much money you will need to get you through the year, track your expenses for a couple of months and see what you’re spending your money on.
Identify your basic living expenses. These are the essential expenses you need to survive.
Your basic living expenses will probably be
- utilities like heat, water, and electricity
- internet access – I would count this as an essential because you’ll need this to get your business off the ground
- Identify expenses that are not essential to your survival. These are things like your Netflix subscription and gym membership. You might have to sacrifice these expenses until your income increases.
Some of your current expenses can be reduced or eliminated as they’ll no longer be relevant once you start to work from home. You won’t need to use public transport or your car as much. You can eat breakfast and lunch at home. If you drink coffee, investing in a coffee machine and making coffee at home will save you a ton of money. Although, working from a coffee shop every now and then is a great way of getting you out of the house.
You also don’t need to buy work clothes anymore. Hello, pajamas! Only joking. I think it’s better for your productivity if you get dressed properly every day so that you’ll be in work mode. I do wear my slippers when I’m working though. They’re so comfy! There are lots of other savings you can make by working from home.
Figuring out how much you need to save is just one step you need to take before quitting your job and going freelance.
Create a budget
Ok, so you know what your basic living expenses are now, but you also need to know what your income is before you can create a budget.
Of course, with a variable income, you don’t really know how much you’re going to earn. If you’re a new freelancer, you certainly won’t know what you’re going to earn. As such, you will have to dip into your savings for the first few months. Unless you took my advice and freelanced on the side before you quit your full-time job!
Once you have three to six months of running the business under your belt, you will get a better idea of your income. Start with your lowest income month as a baseline and allocate your expenses based on this amount.
One method of budgeting that people with variable income might find useful is zero-based budgeting. This is where you allocate all of your money to different spending/saving categories so that it all has a purpose. Essentially your income – expenses = zero.
This type of budget eliminates overspending because all of your income is allocated to where you need it most. You can’t go out and buy a new top just because you feel like it. Unless you have some money allocated to the clothing category!
Here’s how to create a zero-based budget:
(Note: I’ve taken a bare bones approach here because I’m working off the assumption that you’re not earning very much from your new business yet. As a result, I’m focusing on necessary expenses. Although I do think you should include a small amount for entertainment to stay sane! Once you start earning more money, you can reintroduce discretionary spending. Don’t worry; it won’t be forever!)
Step 1 – Write down your income. If you’re self-employed, take your lowest income based on the previous three to six months.
Step 2 – Write down the basic living expenses you already identified like your rent/mortgage, utilities, food, healthcare, etc.
Step 3 – Subtract your expenses from your income. If there is any money left over, allocate it. The point of a zero-based budget is that all your money has a purpose. You can allocate left over money to extra debt payments, savings, or as a little fun money. If your expenses exceed your income, you will need to adjust how much is allocated to each category or cut some expenses.
Step 4 – If your income is irregular and you earn extra money that you weren’t expecting, allocate that money as it comes in.
Step 5 – Analyze and repeat. Review your budget and see if it is working for you.
Hope you are prepared for some of the items listed above. Let me know if you think I have missed on something important as well.
Happy freelancing !