Several debt management firms have closed due to restrictions from the FCA...
Making money as a freelancer: What’s it really like?
Working for yourself as a freelancer might sound appealing, but what’s it really like? I spent three years as a full-time freelancer and can tell you what the day-to-day reality is, how to get started, and give you some helpful tips.
Freelancing can be incredibly rewarding and you actually can make money, but there are challenges. I learned this the hard way when I worked for myself. Here are my tips for anyone who wants to take the plunge.
Being self-employed seemed to be the way to achieve the optimum work-life balance. I had daydreams about taking breaks from work to bake bread, or going for a swim in the middle of the day. During three years working for myself I failed to make a single loaf of bread and as for the swimming…no, I didn’t do that once.
So what’s freelancing really like?
As I soon learnt, if you’re determined to make money as a freelancer you have to put a lot of time and energy into your work. Not only doing the actual work, but building up a good reputation, finding new clients and keeping existing clients happy.
That’s why the baking and the swimming remained a daydream – I spent longer at my desk than when I’d been employed full-time, scared to leave the laptop in case I missed an important email.
Is there any money in freelancing?
The burning question you most want to ask is, “Can you really make money freelancing?” The short answer is, “Yes!”
For example, experienced freelance writers (the field I was in) who work full-time can make upwards of £20,000 a year producing mid-level content. (By ‘mid-level’ I mean they’re not celebrity columnists or household names, except in their own households.) There’s potentially a lot more money to be made if you find a profitable niche.
My income fluctuated a lot; sometimes I was flush, but there were times when I didn’t earn much at all.
Rather than recklessly throw yourself into freelancing full-time, as I did, if you’re able to fit freelancing around a full-time or part-time job, it’s a great way to test the waters.
There are a lot of positives to freelancing
Even if you don’t make enough to live on, freelancing can be a joy and you’ll notice some immediate benefits.
- There’s no more daily commute! Just the walk to the kitchen to put the kettle on
- You can dress for comfort and without worrying about what you look like! You can save a lot of money on clothes and cosmetics
- No more office politics! My cats shared my home office, they were hopeless gossips
But, when you freelance you need to get used to different pressures…
You’re always ‘on call’
Work tended to land at the worst times for me, often multiple projects coming at the same time.
Every holiday for three years was interrupted by having to finish some work in order to meet a deadline. I even worked on Boxing Day one year because a client needed my work before they went on a skiing holiday.
You might be your own boss, but you’re not in charge
The customer is always right. When they say ‘jump’, you jump. This means being poised to deliver work to the tightest of deadlines and being prepared to put in extra hours re-working drafts following their feedback.
And you’re at your clients’ mercy. Keeping them happy is the most important thing to a freelancer.
You need to ask yourself if working alone really suits you
I was lucky that I wasn’t completely isolated, as my boyfriend and next-door neighbour both worked from home. If it had just been me and the cats, I think I would have gone stir-crazy.
Even though I appreciated the convenience of working from home, after a while I really craved company. I really looked forward to the assignments when clients wanted me to visit their offices.
You have to put 100% into it and juggle a lot of roles
As a freelancer you’re the head of business development, marketing executive, accountant, head of sales, creative, client relationship manager etc.
Are you up for it?
So, if you’re ready to give it a go, what do you need to do first?
A room of your own
You’ll need a room for working and looking for work. A proper desk with a comfortable chair and a decent screen is essential. Thinking you can work from the sofa while watching telly, or even in bed, is not going to be practical in the long-term.
You need a place where you can cut out distractions, concentrate and be professional (even if you’re wearing your pyjamas).
Planning ahead and budgeting
It can take a while to generate business and, more importantly, to get paid for your work.
This means you need to budget for essential outgoings while you wait for new income.
The good news is that by working from home you’ll immediately make savings on travel, work clothes and all the bits and bobs that get casually spent on your lunch hour.
On the other hand, be aware that by being at home more you’ll need to spend more on heating your home and, if you’re anything like me, you’ll go through lots of cups of tea!
Use your free time to learn new skills
Learn new skills by doing tutorials or creating work in different media while you’re waiting for work to come in. This is a great time to start that long-promised novel – it’ll boost your creativity. Other suggestions include:
- Learning HTML code and get up to speed with different publishing programmes, so you can create webpages and emails
- Check out the latest tech developments
- Keep track of the latest trends in social media
Any extra strings to your bow can be a huge help in bringing in new business.
Opening up for business
Get an online presence
Building a website is a great way to show off your talents, whatever it is you’re freelancing in. Make it look as professional as possible and include examples of your work, along with your contact details.
There are a number of free blogging platforms (like Blogger and WordPress) that can get you going quickly even if you’re not too techy. While you may have to pay more for web addresses and some extra features, you can get a decent looking blog live for free.
Hosting Advice has put together a good overview of free blog software.
If you’re producing visual content, it might be best to focus on Instagram or Pinterest as your main channel.
Make sure people can contact you
Putting yourself out there means sharing your contact details with the world. I didn’t have too many issues with spam callers, but to be on the safe side, it’s worth considering using work-only emails and phone numbers. Free web emails (such as Gmail) are absolutely fine – nobody quibbled that I didn’t have a dedicated email address.
Setting up a Skype account, or similar, will also provide another way for potential clients to get in touch. If they can have a virtual meeting with you it helps to build up trust.
So you’ve set up your home office and created an online shop window for your freelance services. Now it’s time to build up contacts and generate sales.
Make connections on social media channels
Twitter, LinkedIn, Facebook, Pinterest and Instagram can be excellent for getting to know the kinds of people who may hire you. These channels are also really good for staying connected to the outside world from the confines of your home office.
I’d recommend investing some time in building up your presence on social media. Just don’t forget that people are ‘getting to know you’ this way, so moderate your language and keep any rants to yourself (or on a private account).
- Don’t start hard-selling to new contacts: Think of this space as a shop window in a department store and stay classy
- Start following the right people, including fellow freelancers (your competitors); spend time researching the sectors you’re working in to find out who the movers and shakers are
- Curate an interesting feed: Share insights and expert advice – it all helps to build up a good reputation
- Share your portfolio: Don’t share everything, but don’t be shy about showing off a bit.
Sign up with specialist agencies
Did you know recruitment agencies can get you freelance contracts? They have strong relationships with the clients they source permanent staff for, so they’re the first port of call when a business has a need for someone to work on a contract or short-term basis.
This is a great way to get some solid income and pick up professional tips on presenting yourself and your portfolio. Even better, agencies will pay you directly, so tax and National Insurance are taken care of. You even accumulate holiday pay!
Search online in the usual places for contract work in your field and you’ll come across the agencies to get in touch with.
A short contract I took on led to another job, then another project, then another, as the people I worked with moved onto other roles and remembered me, or recommended me to their new companies.
Do some work for free…
…but only if you have the time – and only if you’re getting rewarded in some way.
It may sound counter-intuitive to suggest working for free when the whole point is making money, but I found this a very effective way to build up a strong portfolio and build up valued connections. Obviously, you don’t want to come across as being too keen to work for free, but if it’s clear no money’s going to change hands you might still feel it’s worth your while to do the work.
Ask yourself if any of the following will apply:
- It’ll give me good examples for my CV/portfolio
- I’ll enjoy doing the work (maybe flex those creative muscles)
- I’ll be making useful contacts
- I’ll get some rewards from it (such as freebies)
- I’ll get credit for what I’m doing
- I’m not taking work from someone who might otherwise have been paid for it
For example, there’s a lot of demand for guest-bloggers and it can be a way to get on to prestigious websites and other publications. If you’re not being paid, you can ask the client to tweet about the article with you named as the author, which many are happy to do.
Graphic designers can also pick up some really good portfolio fodder by doing free work for local businesses – especially for events at bars and music venues. In this case, if the venue can’t pay you, they’ll usually be happy to get you a round in and put you on the guest list for VIP nights – and recommend you to their friends.
If you can get your clients to come back for more, you’re well on the way to being a success.
Be business-like but friendly. Always be prompt, reliable and a font of wisdom – in short, be an absolute pleasure to work with.
The golden rules are:
- Summarise project briefs before you start, so both you and the client are clear about expectations
- Ask questions about anything you’re not clear about
- Present work as neatly as possible, looking at the formatting as well as the content
- Never, ever, ever (EVER!) miss a deadline. Never
Remember, you’re running a business
If you’re a creative type, this is probably the part of freelancing you’re most dreading. Well, I scraped through my GCSE Maths many moons ago and I managed to keep on top of the numbers, so you can do it too.
Invoicing isn’t complicated if you work out a system
There is a choice of invoice templates you can use in Microsoft Office and even more online
- Get into the habit of sending your invoice with your final (or nearly final) draft
- Create unique codes for each piece of work and ask your clients to use them (they won’t always remember though) when they pay into your account – it makes it easier to track incoming payments
Make sure your clients pay you!
Don’t be shy about chasing up overdue payments. Some companies deliberately hold off paying at all until they absolutely have to.
Include on your invoice that you expect to be paid within six weeks. At the very least this gives you leverage if you get into any disputes.
Company director or sole trader?
When you’re starting out it’s probably not worth setting up a limited company, unless you’re going to be making large sums of money. Instead you can follow the HMRC guidelines to setting up as a sole trader, which is easier and quicker.
If you have any questions at all about setting up and running a business, do seek expert advice.
Get tax relief on your expenses
Keep a record of daily expenditure, noting any expenses that might be related to your freelance work, as these can be taken into account when calculating your tax.
As well as travel, phone and the internet, include spending on relevant books and magazines (if they could count as research) and a percentage of your household bills, if you are a homeworker.
There’s more information here from the government.
Get an expert to help
If you’re pursuing freelancing on a full-time basis, it can be worthwhile consulting an accountant. This isn’t necessarily expensive. Most will either allow you to pay on a monthly basis, or at the end of the financial year.
They’re the experts and will identify all sorts of (legal) ways to calculate your taxable income, reducing the amount you pay. My accountant cost less than the tax savings they identified for me and took a lot of stress away.
Finally, enjoy your freedom
The best thing about freelancing is managing your own time.
If you’re a night owl you can work all night to meet your deadlines, early birds can be up before dawn and finish a day’s work by lunchtime. This kind of flexibility is particularly useful if you’ve got other commitments, like a family to take care of or a time-consuming hobby.
It’s such a buzz when a client says they’re so happy with what you’ve done and they’ve got another job for you. And it’s even better when you see the money land in your bank account…
Any questions or tips to share? Pop a comment below.