Starting your own business doesn’t necessarily have to be about building up a big company and putting yourself at the top as boss.
While some people dream of one day handing over the “grunt work” to employees while they take a more strategic role, for others that’s a new kind of nightmare they’d rather never face.
If that’s you, then you could have a happy future as a contractor. This is where you effectively sell yourself – if you like, as a gun for hire – taking on work for more than one employer at a time.
There are huge advantages to being a freelancer. Depending on what kind of work you do, you could find yourself doing the same tasks you do as an employee, but working for yourself. And you could even find yourself earning more money than you did in employment. No boss, more money – surely this is a dream come true?
Of course there are downsides as well. As a freelancer you don’t have the protection or benefits that employees have. Many freelancers find themselves working harder than they ever did in a job… if you want a pull a sickie, you won’t earn any money that day. Worse than that, you have to sort out your own tax and take responsibility for finding work. And there’s always the chance you could wake up one morning to find you don’t have any jobs lined up for weeks to come. Scary.
Here are the five steps Bytestart suggests you take to set yourself up as a freelancer.
1) Build your business before you quit your job
The worst thing you can do is quit, and then try to start a new life as a freelancer. It’s a guaranteed way to find yourself sat at home with nothing to do! If you’re made redundant or get fired that’s fair enough. But otherwise, it’s much more sensible to try and build your business while someone else is paying the bills.
While you still have a salary coming in you can take the time to decide exactly what you want to do and how you are going to go about it. It’s the perfect time to build a website, get your marketing messages clear, and put the feelers out for work.
Some people do this without telling their employer what they are doing. It’s a risk, but you’re planning to leave anyway! Depending on the kind of relationship you have with your boss, you may be able to be honest and negotiate a reduced role for six months, giving you the best of both worlds: a regular salary and time to prepare. It’s not unheard of for new freelancers to get their first job from a previous employer.
Part-time work in the evening or at weekends is also a great way to build up work, and will help you develop the kind of work ethic you need as a freelancer.
2) Market yourself professionally and ruthlessly
Freelancers are only as good as their last job. Quickly build a portfolio, using work you did as an employee if necessary. Don’t be scared to spend money on professional marketing tools such as a website or presentation materials. Successful business people see this kind of marketing spend as an investment rather than a cost.
Plan to spend time and money networking. People buy people, so plan to spend time and money pressing the flesh. As a freelancer this could be the best marketing investment you make.
One of your biggest issues as a new freelancer will be establishing credibility. You may find it worth joining professional associations, and asking for testimonials from all contacts.
3) Work your contacts
If you are freelancing in an industry that you have been in for a while, then make sure everyone knows about your new role. You have no idea where your next piece of work could come from, so it doesn’t hurt to spread the word.
Remember that what’s top of mind for you is quickly forgotten for your contacts. Consider a simple email newsletter once a month to keep your contacts up-to-date with the work you’re doing and what availability you have. Make it easy for people to remember and book you.
4) Stay ultra focused
As a freelancer you will probably be based from home, and that can bring a lot of challenges. Especially staying focused. If you have a quiet day with no work booked, you should spend every spare minute marketing yourself and chasing every opportunity. But be aware… that evil daytime TV will call out to you, and before you know it you’ve wasted a day, which will affect your earnings down the line.
If you can, use a spare room in your house as an office, and have working hours that you stick to. That should include breaks. The more you treat working from home as proper work, the easier it will be. You can use basic goal setting as a powerful way to ensure you achieve something every day.
5) Get a very good accountant
As a freelancer you have more opportunities to earn and save money than your employed colleagues. But you need help to do it. Many freelancers are sole traders, but in the IT industry many contractors opt to use limited companies, or umbrella companies. But the rules can be complicated, with controversial tax legislation such as IR35 to consider. Don’t think you are saving money by not getting an accountant – it’s a false economy. A good accountant will save you far more than they cost.