Going it alone
Offering an enticing degree of independence, pursuing the dream of successful self-employment is a positive career choice for many graduates
The first “freelancers” were mercenary soldiers in medieval Europe, unattached to any army, who would literally ply their “lances” for any militia who paid them. Today the definition has somewhat changed, but the principle behind “freelancing” remains the same. It constitutes pursuing a profession, generally in a task-specific context, without a long-term commitment to any particular client. Instead of receiving a regular salary from one employer, freelancers sell their time and skills by the hour, day or project. This way of working offers more flexibility than a permanent job, as you decide how, when and where you do your work. However, it also carries more risk – you are also solely responsible for your business’s success or failure.
There is ever-increasing scope for self-employment in roles as diverse as web designers, financial consultants, copywriters and personal trainers. And there are nearly as many reasons why one might choose to go freelance. The rise in lay-offs caused by the global financial crisis has resulted in a corresponding increase in self-employment.
Pros and cons
Freelancing may sound like an idyllic alternative to the daily grind of an office, but its benefits and pitfalls should be considered carefully before taking the plunge. Start by factoring the following advantages of self-employment into your deliberations: being able to choose the most interesting and challenging work in order to build up a distinctive and comprehensive portfolio; having greater control over the quantity and type of work undertaken than you might as a permanent employee; financial incentives – there are various deductions, reliefs and allowances to which self-employed business owners are entitled that will reduce your tax bill; less travel – freelancers who work from home are often freed from the miseries of crowded tubes and buses, cancelled trains or traffic jams as well as the associated, ever-increasing costs of business travel.
Conversely, the disadvantages of freelance life include: its “feast or famine” nature – workload tends to be sporadic, testing even the most finely honed of time-management skills; budgeting a variable income – banks, insurance companies, mortgage lenders, letting agents and many others tend to look unfavourably on those who can’t guarantee a specific income from month to month; loneliness – many freelancers work from home, usually on their own, and so isolation is a common issue; reduced employment benefits – compared with their in-house colleagues, many freelancers still get a financially raw deal, such as unpaid holiday leave and not being paid when unable to work through illness; working hours – these typically extend well beyond the 9 to 5 regime and often take in public holidays, evenings and weekends too.
A fundamental first step on your path to successful self-employment is to research both the relevant work sector and the field of freelancing. Use websites dedicated to freelancers to build up a bigger picture of what’s involved, scout for work and hone your “functional” or skills-based CV. There are numerous sites offering information and advice on topics relevant to self-employed workers, such as how to prepare a quote, invoice or proposal, what type of business insurance you might need, what any contract for services should include, and where and how to market your services.
Use professional associations, specialist recruitment websites and freelancer-specific forums to get established, or become listed on sector-specific directories; www.freelanceadvisor.co.uk and www.freelanceuk.com are good starting points.
Having carefully researched the market, turn your attention to where you intend to do your freelance work. Homeworkers need, as Virginia Woolf put it, “a room of one’s own” – a place where you can focus solely on the work in hand and not on the needs of flatmates, families or pets.
Most freelancers need their own equipment, including a telephone, computer, printer and broadband internet. HM Revenue & Customs, with whom you will become intimately acquainted, has compiled a number of useful leaflets providing guidance on managing the potentially complicated finance side of freelance living; see www.hmrc.gov.uk/selfemployed.
Read the small print
As a freelancer, life often revolves around contracts: what is agreed with a client before the onset of work forms the basis of your relationship with them. Typically, such contracts include not just the outcome, such as “three illustrations”, but specific project requirements including the period of time the contract covers.
Contracts also cover the freelancer’s terms and conditions, such as project cancellation fees, copyright ownership details and payment due dates. Any changes or amendments to the initial agreement should be reflected in the contract: it is the self-employed person’s only protection from unscrupulous employers and the basis for all freelance business. If the contract covers 10 hours of freelance work but the project actually takes 15 hours to complete and the extra hours are not covered in the contract, the freelancer may lose income.
Check those payment terms before you sign anything too, as these can be quite client-biased; 90 days may be acceptable for a large printing firm, but could mean that an illustrator can’t pay his or her rent, for example. New freelancers should seek advice about contracts from professional organisations and trade representations. It is vital to keep accurate records of all invoices submitted and payments received, not least so as to avoid confusion when paying tax. Small but important costs, such as phone calls and stationery, must all be logged for tax purposes – to your benefit, in this case.
As noted above, almost every freelancer will find that there are occasional periods when they have no work. This is all part of the world of self-employment. Keep networking through the dry spells, as all contacts can become useful at different times and in surprising ways. Use fallow periods to catch up on admin work, too.
Keeping work skills up to date is one of the challenges many freelancers face, and so a gap in work could be the ideal time for a short refresher course in a relevant subject or skill – maybe training up on new technology or computer programs that are being introduced in your line of work, or studying for a professional qualification. Many are tailored for flexible workers, offering a range of topics, times and costs. Your local Business Link offers a whole host of free goodies, high-quality training courses among them; visit www.gov.uk to sign up.
Finally, even if self-employment is your long-term objective, many graduates find that it is worth working in-house within the relevant work sector for one or two years first. A period of in-house work before starting as a freelancer is an excellent way to learn the basics, gain experience, build up your list of contacts and acquire the vital references to impress those first freelance clients.
HM Revenue & Customs
People Per Hour