Becoming a freelancer is a big step in anyone’s life. It means setting up your own micro business, finding the ideal customers and learning to make money from your own skills and services. But if you get it right, going freelance really can change your life for the better.
Steve Ash, freelancer and content consultant at CommsBreakdown, is the author of ‘Going Freelance: Building Work Around Your Life’. In this guest blog, he gives the lowdown on his freelance life and how cloud tech has created a new way to make a career.
Getting in control of your life and career
I’ve been a freelancer for nearly six years now – and it’s a change in career that I’ve never regretted. For me, being a self-employed ‘solopreneur’ has certainly been life-changing. It’s a way of working, using your skills and making a living that’s becoming increasingly popular.
The number of highly skilled freelancers in the UK rose by 47% between 2008 and 2018, according to recent research by IPSE, the Association of Independent Professionals and Self-Employed. More and more highly skilled professionals are opting to explore a freelance career – and it’s no accident that this is happening right now.
It’s never been easier to set up your own business. All I needed to become a freelance content writer in 2014 was a laptop and a few specific cloud apps. If you’re a skilled professional, the allure of turning your back on the rat race and getting in control of your own work destiny can be strong – and the benefits really do look attractive.
As a freelancer, you can:
- Work more flexible hours – I love the flexibility of being able to work when I want, and where I want. The traditional 9-5 has definitely gone out of the window. I can now create a work/life balance where I spend plenty of time with my family.
- Reduce your commute and travel – the ability to work from any location with WiFi means I don’t need to commute to an office. I’m a regular at my local coffee shop and they’re very supportive of the many freelancers who work from this ‘coffice’.
- Work with a varied selection of customers – my network of customers just keeps growing. I really love the challenge of working with a new business and getting to understand where I can help them. That’s a big part of the freelance allure.
Why you need to take your finances seriously
One BIG concern for people considering the freelance lifestyle is money. In a corporate role, you know your monthly salary will always be there. This gives you the stability of a regular income – something you can’t rely on when you’re self-employed.
If I take on more customers and do more work, I’ll get paid more as a result (not something I can say about many of my previous corporate roles). So, with the right understanding of your finances, freelancers can generate a very healthy income from their skills.
But to make your micro business profitable, you definitely need some sound financial management.
To get in control of your numbers.
- Keep good records and be organised – it’s not the most glamorous part of running a business, but it’s vital to keep records and to be on top of your bookkeeping. It keeps your finances organised and makes life a lot easier when your tax return is due.
- Use a cloud accounting app – using a spreadsheet to log your income doesn’t cut it in 2020. Online accounting apps make the whole process of managing your freelance money quicker and easier to do. This means you have more time to work with clients.
- Stay in control of late payments – unpaid invoices are like Kryptonite to freelancers. So make your payment terms clear and chase up late payers ASAP. Xero automatically chases late invoices, which is incredibly handy.
- Work with an accountant – if you can afford it, I’d definitely suggest engaging an accountant. Time spent worrying over late payments and tax returns is time lost for the business. An accountant helps you to sort all that out, reducing your financial worries and your stress levels when a letter from HM Revenue & Customs arrives.
How Xero helps me stay in control
As an ex-Xero, it was a no-brainer for me to choose Xero to manage my freelance bookkeeping. I knew the basics of working with an accounting system already, but using the Xero Dashboard to raise my online invoices, chase up late-paying customers (yes, I still get those!) and manage my cashflow has made life so much easier.
If you’re thinking of taking that first step towards self-employment, having the right software and apps to help out makes a big difference. My advice would be to:
- Decide on your specialism and start promoting your freelance business
- Embrace the latest cloud tech and the benefits of using business apps
- Keep in control of your finances and aim to make a profit