Freelancing

What Is It Really Like Being A Freelancer?

Photo courtesy of Flex JobsOpens in new window

The 9 to 5 life isn’t for everyone. Thus, a growing number of people are looking to pursue a freelance career, where they take their skills and work for an interesting range of clients of their choosing.

Freelancing represents a break from the comfortable, and maybe slightly stultifying, traditional career of working for the boss and taking home a salary at the end of the month.

Becoming a freelancerOpens in new window can make an exciting career change, but before taking the plunge you need to think carefully about what it entails.

• What are your motivations for going freelance?
• Are you suited to the freelance life?
• Will you be able to earn enough in your new career choice?

These are just some of the questions you should try to answer before making your decision. This literature will help you decide whether you’re a freelancer at heart by looking at:

What Is Freelancing?

The term freelance originates from a time when mercenary soldiers would offer their services to the highest bidder. These “free lances” would move from job to job, and were tied to no single employer.

Today the term freelance describes professionals who are similarly free to work with anyone.

Businesses like freelancers because they are the ultimate flexible resource that they can use on a short-term, as-needed basis to fill a gap.

Because freelancers are self-employed, they avoid the hidden and expensive employment costs, such as National InsuranceOpens in new window, pension contributionOpens in new window, sickness paymentsOpens in new window, and any of the other benefits that businesses offer to full timers. This means that freelancers can generally charge a premium because of their flexibility and their lower employment costs.

Freelancers can also work for a range of companies at once, so if your time managementOpens in new window is good, you can be more productive and more highly paid as you fit more work into the available working day. By spreading your workload around several different companies, you may also ride out the ups and downs of the economic cycle a bit better as you are unlikely to be made redundant by all of them.

Freelancer or Contractor?

The terms freelancer and contractor can be used interchangeably, but they are subtly different.

The distinctions between the two are subtle, but generally speaking, a contractor will work exclusively and full time for a client for a specified period of time. Generally, this will be at a client’s place of work. Contractors are common in the IT industry in particular.

By contrast, a freelancer will have a portfolio of clients that they work for, and will often work from home. The bonds between freelancer and clients are much looser and either party can effectively decide to terminate their arrangement at any time. This is a common model across media sectors.

However, there is a crossover between the two descriptions. Some freelancers welcome the security of taking on a contract for a short period of time. However, if security becomes an overriding concern, you may want to reconsider your freelance status and look for a full-time salaried position. Contractors can also freelance in between contracts — so it’s often difficult to tell the difference between the two.

Who Does It Suit?

More money, more varied work, and more control over your working life. Who wouldn’t want to be a freelancer?

Freelancing sounds very attractive, but these advantages are just one side of the equation. Setting aside the fact that some people may be forced by economic necessity into freelancing, it doesn’t suit everybody.

Whether you are doing a bit of freelancing on the side of your main job or making freelancing your new full-time occupation, there are a few things that you should bear in mind.

Don’t be completely seduced by the upside, because there is also an accompanying downside.

You have to find your own work, deliver to exacting deadlines, work out what you are going to charge for work, and keep that supply of work coming in.

There are also a lot of plates to spin. As a freelancerOpens in new window, you are effectively a one-person corporation. So, as well as actually doing the work, you need to be:

You will also be responsible for such issues as training and making sure your skills are up to date, and any general administration that would have been handled by somebody else in a bigger company.

Once you are out on your own there is no longer the shelter of senior employees to correct your mistakes or cover your faults. For this reason, freelancers are typically well rounded in their skills.

To be a successful freelancer, it is also helpful if you are already established to a certain extent in your sector. In some sectors, such as journalism, it is not impossible to begin your career freelancing but it is a tough start.

With some experience behind you, your contact book will be better able to deliver work for you. A good track record makes it simpler to get work as people will already know what you are capable of and will trust you.

So, is freelancing for you? Here are some things to bear in mind before making that decision.

1.     Finding work

As companies make redundancies and restructure to leaner, meaner operations, there is a lot of freelance work out there as companies look to outsourceOpens in new window more work. But getting a job is a job in itself.

Think carefully about where your work is likely to come from. Will there be enough of it and will it be regular enough? What will it pay? As well as existing contacts, you will need to market yourself a bit more and let people know about what you can do. What will your strategy be?

2.     Your skills

Do you have skills or experience that others require?

The more in-demand your skills are, the more work you will generate and the higher the fees you will command. This is why it is often better to embark on a freelance career in your career.

Clients use freelancers where they have a skills of gap of their own, and it’s more likely that somebody with a packed CV is going to be in demand than a new starter.

3.     Will you earn enough?

Take a close look at what you need to earn in a given month and try to honestly assess whether you can earn that through freelancing.

Day rates for freelancing may sound fantastic as a pro rata calculation, but what about the days when you are not needed? Also, work into your calculations how you will fund holidays, illness and other downtime.

4.     Limit your own pay

Remember that there is a difference between what you need to earn and what you want to earn. As a full-time salaried person, you will have got used to being paid a set amount every month, and you will probably spend all of it by the next payday. As a freelancer, the equation switches. There is no set pay for the month, and it is a good discipline to pay yourself what you can get by on and set the rest aside for a rainy day. As a freelancer, some days are more rainy than others.

5.     Payment gaps

A month can seem a long time as you try and eke out your salary, but imagine waiting several months for payment at a time when your own bills are mounting up.

Different clients have different payment policies, but periods of 60 or 90 days from the production of an invoice are not uncommon.

It can also depend on when your work is published — some publishers only stump up after a magazine or newspaper hits the streets and you may have been commissioned weeks in advance.

For these reasons, you will need to have some reserves to tide you over. Many freelancers look to have at least three months of salary in reserve, although six will put you in a more secure position.

6.     Deadlines, deadlines

Although freelancing may seem to promise to free you from the 9 to 5 rat race to a certain extent, you are still prey to the demands of your clients. You may decide to spend your daytime hours watching art house movies or visiting museums, and working into the night, but ultimately the project needs to be delivered.

Freelancing is also a numbers game to a certain extent. The more work you do, the more get paid, so hitting those deadlines is not only good for your reputation, it allows you to cram in more assignments. If you are the sort of person who will use up all the available time to complete a project, freelancing may not be for you.

7.     Time management

People who freelance have to be realistic about the amount of work they can take on. It can be seductive to look at the fee for a project and have it mentally spent before you’ve done the work. Consider how you are going to be able to do it and what effect that will have on your health, family life and sanity. Don’t’ overburden yourself.

8.     Marketing yourself

Clients will judge you on the quality of your previous work as much as recommendations from others. Work out how you will present the best version of yourself. Do you need a portfolio? Can you point to examples of your work online? Do you have your own website or blog?

9.     Are you a jack of all trades?

You no longer have the back-up of working in a larger organization. The most senior person finds themselves doing their own filing, not to mention making their own tea. More importantly, if you’re used to working within a managed or supervised environment, it can be a shock to find that you make all the decisions and set timelines. You may not have all the skills that you need at first, so are you prepared to pick them up?

10.     Can you pull on all-nighter?

There are time when a pressing deadline will mean you have to work around the clock to complete the job on time. The nature of freelancing can be feast or famine, and it’s often a case of having to work when the work is available and catching up on your sleep when you can. Flexibility is important, and who knows, next week you may have no paid work at all.

11.     Are you a lone wolf?

Rather than the social environment of an office, many freelancers can find themselves working at home alone.

Although this can mean you will skip lots of interruptions such as colleagues discussing what was on TV last night, you also miss out on essential office scuttlebutt. Social media can make working remotely or alone less isolating, but it’s something that may not suit everybody.

How Much Can You Earn?

How long is a piece of string? Earnings as a freelancer will depend on a number of factors.

• Your work rate: to a certain extent, freelancing is a numbers game. The more work you do, the more you get paid. If you are a fast, reliable freelancer, then you can get through more work.
• Your rate: every freelancer will be paid slightly differently. This will depend on their skills and experience, their specializations, and their own bargaining powers. Employers never want to pay you what you think you are worth, and you can either meekly accept their rates or make the case why you are worth more.
  
  
  Your rate may also reflect the urgency of a particular piece of work. If something is required to a short deadline, there should be a premium that reflects that you may have to put other things on hold and burn the midnight oil to get the work out on time.
• Seniority: the further up the job ladder you are in your particular sector, the more you can earn. However, individual jobs may be harder to come by in more senior positions, so you may find that seniority in itself does not guarantee higher earnings. You may have to drop down a level or two to guarantee work.
• Type of work: some work is more valued than others and the rates will reflect this. If you are churning out listings all day, you shouldn’t expect to be earning the same rate as a freelance analyst studying complex oil and gas prices and producing a hard-hitting report for a client.

• Supply and demand: if you operate in a sector that is heavily subscribed, rates will be depressed. A classic example is that of music magazines where there are a huge number of eager music fans trying to get into print, often for the love of music and for the glory of seeing their name in print. If people will work for free, don’t expect the pay to be great.
• The economy: in a downturn, freelance rates can plummet as clients are less prepared to pay the going rate, and there is an increase in supply.
• Where your work is used: for writers and photographers, the higher profile and the bigger the circulation, the more you can charge. A picture for Tractors Monthly may pay you a couple of hundred pounds, but an advertising shoot for a fashion brand could lead to a payment in the thousands.

Pay rates will vary for freelancers within industries as well as across different sectors. However, it is fair to say that there is potential to earn more money as a freelancer than doing the same job as a staff member.

The reasons are simple. Because employers don’t have to pay National Insurance, holiday pay and various staff benefits to freelancers, they can afford, and indeed expect, to pay a bit more to freelancers. Also, because they only use a freelance resource when they need it, the cost need not become prohibitive.

Freelance rates can seem enticing for some people stuck in a staff job. If the day rate for freelancers is £200, then that equates to £52,000 a year. For someone who may be on half that amount, it’s tempting to see freelancing as an enticing alternative career path.

Of course it’s not as simple as that. It’s unlikely that you will be working all of the time — otherwise the employer would be better off having somebody being paid less on their staff. Full-time staff have benefits that freelancers have to sort out for themselves, such as paid holiday and sick leave.

Remember to take your holidays into account when calculating your potential income for the year. If you plan to take five weeks’ holiday in the first year, this will cut nearly 10% off your annual income.

You also have to deduct various costs — say, telephone, fax and computer use at £20 for the week, research materials such as magazines and reports at £10 per week, stationery, postage and other expenses at £10 a week, plus an allowance of £30 a week for travel costs for meeting people, getting new commissions, and so on.

Before you start out all of your outgoings for a month: rent, utilities, transport, childcare, subsistence, insurance, and so on figure how much you will need to earn to cover that amount.

Another very important issue in freelance earnings is to be disciplined about putting money aside for the taxman. You are now responsible for your own tax affairs and it can be tempting to put all your earnings into a pot labeled “Mine”. Make sure you deduct enough for tax or you could suddenly find yourself short.

How Much Does It Cost?

Many freelancers work from home so the start-up costs are minimal — a bedroom converted to an office, with a desk, computer and internet access, a telephone and an answering machine. You may also need business stationery and business cards for advertising yourself to clients. You may even wish to produce brochures about your services too.

As a rule of thumb, you could be looking at £1,000 - £1,500 to set yourself up properly at home. It doesn’t pay to skimp on the tools of your trade. Buying a second-hand laptop will seem a false economy if it crashes halfway through an important project and you haven’t backed up your material elsewhere.

Not everybody who wants to is able to work from home. You may have children and find it too distracting or simply too crowded working at home.

It is possible to rent desk space in a shared office. You may be able to rent a desk from £50 a week, which could include phone and internet access, and might even bundle in IT support. It can also be more appealing for some freelancers to work in a setting with other people, rather than on their own.

Tools of the trade

Set-up costs will vary depending on the type of work you are carrying out. For some freelancers, such as a freelance photographer or cameraman, a car may be a necessity to get from job to job.

Designers may find that they need to invest in a more pricey Apple computer, rather than making do with a more generic laptop that a writer could get away with. And then there is the cost of programs such as Photoshop and InDesign on top of this.

You may have some tools of your particular trade to buy as well. A freelance music teacher needs instruments and a freelance children’s entertainer requires costumes and props.

For many freelancers, such as PR consultants, writers and proofreaders, there are few other expenses. Sometimes, freelancers are asked to work on the client’s premises so that they are close to where the action is.

However, it pays to remember that this is all investment for your chosen career and you will be able to put much off it against your tax bill at year end.