The Fine Print Of Freelancing

freelance expenses


This is a guest post from Louise Tillotson.  If you want to guest post, check out my guidelines here.

The Fine Print Of Freelancing

There are many benefits to going freelance, not least of which is the money you can make! Being able to set your own working hours, holidays and building up an impressive résumé are just some of the attractions.

From a company’s point of view, freelancers are useful because they can be hired to do one-off tasks or smaller regular jobs thus allowing the full-time employees to concentrate on other tasks. And unlike permanent staff, freelancers don’t need to be paid for holidays, sick days and the myriad other costs which come with hiring in-house staff.

When you’re a freelancer, you’re essentially running your own business. You’ll be responsible for sorting out your own workload, finding contracts, paying your taxes and setting your own targets. This can get a little overwhelming when you’re new to freelancing, because as well as the actual skill you’ll be selling, you also need to have a good grasp on the following:

Sales, Marketing and Social Media

You’re only a freelancer as long as you have work coming in. To ensure a steady flow of contracts you’ll need to do some self-promotion. You could start off by registering with various freelancing agencies which make you and your skills visible to vast databases of people looking to hire. Look for databases which are free to join – you want to minimize your outgoings at this early stage.

Social Media is one of the best tools you can use in your self-promotion as a freelancer. If you don’t have much experience with the main networks like Twitter, Facebook and LinkedIn, then now is the time to start. I’d suggest starting a new account on any network you already have a personal account on; you don’t want to put off any potential clients with nonsensical tweets about last night’s dinner or status updates on how drunk you got at the weekend!

Once you’ve built up a few contracts, it could be worth thinking about setting up a website to further promote yourself. WordPress and Google both offer free blogging platforms, which you can transfer to a paid top level domain for a relatively small fee at a later date if you wish. Ask for references from your clients and post these on the site, along with details of the projects if you’re not under an NDA.

It may also be worth just finding websites within your particular niche and contacting them to offer your services. For example, if you’re planning to freelance as a copywriter then look for blogs which have guest authors; guest posting for a blog is a great way to get your name out there and it will also give you a kind of portfolio to which you can refer potential clients. Remember also to promote any guest posts you do on your social media networks and subscribe to the posts to keep updated with comments too.

Accountancy and Business Management

You don’t have a payroll department sorting out your salary for you, nor an accounts team dealing with all those invoices and expenses that always form an integral part of any business. You’ll need to keep track of every receipt, every invoice, every single penny that goes in or out of your business account and make sure it’s all accurate when it comes to filing your tax return – which you’ll also have to do yourself. Of course, you could always hire a freelancer to do the accountancy side for you…

When you’re employed with a company you get a certain number of paid sick days and holidays. Freelancers don’t get this luxury; if you don’t work you don’t get paid. As your own HR Department, it’s up to you to make sure your working environment is a healthy one, that you have regular medicals to reduce the risk of sickness, and that you don’t take on more than you can reasonably handle. It’s worth putting a percentage of what you earn into a savings account, this will give you a financial cushion in case you do have to take time off for sickness or a holiday.

Determining Your Price

Deciding how much to charge for your services can be difficult, and will require a lot of research if you want to earn the money you need and still remain competitive. If you have a specialist skill which there is a high demand for, you’ll be able to set higher rates than if you’re offering a service which hundreds of other freelancers already do.

That said, you can still set yourself apart from the rest by delivering exceptional quality work and going the extra mile for a client. Using the above example of copywriting, include promotion of your client’s website as part of the service; not every freelancer will do this but it can be very valuable to an online business and may give you the edge over the competition.

Invoicing and Receiving Payments

If you haven’t already, consider setting up a PayPal account to receive payments; most companies have one these days and you can use the ‘request money’ service to send invoices to your clients. PayPal accounts are free to set up and they can be linked to bank accounts and credit cards of your choice for easy money transfers. You can also sign up for mobile payments if you foresee travelling a lot.

PayPal also offers a prepaid card which can be loaded directly from the account and used like a credit card, which can be useful for business expenses like fuel, train fares and equipment without the risk of getting into personal debt.

Project Management

Being able to plan a project, schedule work and keep to deadlines is a vital skill for any freelancer, especially if you take on more than one job at a time. Using Gantt charts, spreadsheets and timelines are invaluable in keeping your workload balanced and ensuring you meet your deadlines to the client’s satisfaction.

You can use Excel spreadsheets for free if you have a Google account (Google Docs), and this can be used to create all manner of charts, invoices and more to help you manage your workload.

Other costs involved with freelancing

Home Office Space. At the very least you’ll need a phone and internet connection, preferably a fast always-on broadband one. If you’ll be doing a lot of work on the PC then you could also benefit from a decent desk and chair – it’s important to be comfortable while you’re working and a good chair can really make a difference.

Tools and Equipment. It’s essential that the equipment you’ll be using for your work is reliable and maintained. Where relevant, invest in a new PC, printer/fax machine and, if necessary, the latest copy of Microsoft Office and any other software you will need. The costs for these can vary but your work could suffer if you use sub-standard equipment.

Insurance. Anyone working from home should be aware that regular home contents insurance probably won’t cover the repair or replacement of equipment used as part of a home business. Talk to your insurer and find out what is and isn’t covered.

Going Mobile. It’s worth thinking about getting portable devices (Smartphone, laptop etc) in case you need to work on the go. Successful freelancers often need to travel a lot and it’s much easier if you can carry your work with you. Remember to record all the mileage you clock up and keep all fuel receipts too, factoring these into your rates.

Taking all the above into consideration, you can see that the decision to go freelance shouldn’t be taken lightly! It’s probably a good idea to do a little freelance work in addition to regular employment at first, so you know you still have money coming in while you’re building a name for yourself. But if you persevere and deliver high quality work, there’s no reason why freelancing couldn’t become a full-time career.

This post was written by Louise Tillotson. Louise does freelancing work for financial websites and the occasional web design company in between working a full time job and raising a family.

GD Star Rating
The Fine Print Of Freelancing, 5.0 out of 5 based on 1 rating