I’ve been a freelancer for over 3 years and have definitely had my fair share of struggles. I started my freelance existence out without fully understanding what that actually meant, and I have had to educate myself along the way. There’s no issue in that though, but it can be quite stressful. Most people become freelancers due to losing their jobs or because they want to start something for themself and be ‘more’ independent. If you lack certain education in business management, marketing, or even accountancy, it’s wise to do a little bit of research before you enter the world of freelancers.
Reflecting back on the past 3 years, I came to the conclusion that there are three different main topics that you should be aware of when you are starting out on your own. Personally, I had little to no expertise in any of these topics and wish somebody would have told me about all of this way in advance.
You are the boss. Meaning you are responsible for everything!
When you become a freelancer you become your own boss. In most countries, you will need to open up your own business because of tax reasons. This also means that you become your own business.
Officially opening up my own business was very exciting and I felt like a true boss. But, being your own boss also means nobody is going to help you. You will have to create your own opportunities! Keep reaching out to potential clients about potential upcoming projects. Clients, costumers, or even employees, it all depends on the kind of service you sell.
You have to be able to create your own work opportunities when they aren’t there. I’ve probably written a thousand e-mails applying for projects or trying to sell my classes and it never stops! Working as a freelancer means that most projects are temporary and it’s up to you to get your next gig! Realize nobody is going to do anything for you and you are the captain over your own ship.
Next to creating your own work opportunities, you also need to know how to market and sell yourself to others. As a freelancer, you often provide your services to many different employees and clients. You cannot assume they just happen to stumble upon you. Get yourself out there and know how to find the right people. Spend some time on your marketing as you are your own marketing department as well.
TIP: Create a website to give your business a more credible online presence. But also optimize your social media strategies as they are a way to gain potential work connections in an easy and affordable way.
TIP: Networking is everything when you are a freelancer! Formulate exactly what is is you can offer and always have that perfect pitch ready in the back of your head!
As I said before, becoming a freelancer means opening up a business. And there are a few things you need to know about running your own business…
For tax reasons, it’s important to fully keep track of and record your bookkeeping. You can hire someone to do that or you can do it yourself. Read an article of two about the meaning of bookkeeping and understand what you need to record. Invoices are part of your bookkeeping and it’s very important to do a little bit of research on your countries invoice requirements.
Make sure your invoice looks neat and clean and check if it complies with your countries rules! I cannot stress enough the importance of having a detailed and categorized record of your invoices and receipts as there is always a chance you can get audited!
Not only should you keep track of your bookkeeping, but also your hours are important. In some countries, you have to pass a certain threshold of working hours before you can enjoy certain tax perks. I didn’t know this at first and had to backtrack all of my hours from the previous 8 months. I wasn’t so happy I can tell you.
Of course, you will have to file your taxes, often it’s easier to get an accountant to do this for you. They mostly don’t cost too much and there are many accountant bureaus specialized in freelancers. As a freelancer, you’re most of the time very busy and it’s just easier to outsource your tax returns.
In most countries, your invoices should show paid taxes. To determine how much tax you should pay it’s wise to sit down with an accountant and determine which tax rate belongs to your services. After that, you can basically do it all yourself.
TIP: get yourself some bookkeeping software and make your bookkeeping less time consuming!
Working as a freelancer can be very frustrating at times, especially due to the inconsistency of work.
When you’re not working consistently, your financial situation will flux. Know that often when you start out as a freelancer you still need to make a name for yourself and you are new to this world. Building a network and getting consistent work opportunities can take years.
Make sure to calculate your finances and save where you are able to save. There may come a time when you don’t have any paid work and you will need to dive into those savings. Your salary for three months could end up being your salary for 6 months!
I’m horrible with money and am an impulsive buyer. So, creating a financial plan for every quarter of the year has personally helped me to balance out my earnings and overbridge unpaid work periods.
TIP: Us freelancers don’t live by the same payment system as people do on payroll. You will have to adapt the way you think about money and therefore also change the way you spend and save it. Because I am so bad with money, I sought out some help. And boy did I find it! The Money Book For Freelancers by Joseph D’Agnese and Denise Kiernan totally helped create a financial plan for myself and I’m definitely recommending it to you!
I know, that was a lot to think about. But don’t let yourself get scared away! Once you’ve at least educated yourself and created a clear plan, being a freelancer is a lot of fun! Especially because you get to decide where and when you work!
Being a freelance artist took me around the entire world and I’ve loved managing my own business. Because of all of my experiences and my love for the business aspects, I decided to study digital marketing and start my own platform called The Freelancer Talk. Being a freelancer has definitely opened up many doors for me and I hope it will for you too!
Make sure to listen to The Freelancer Talk Podcast on Spotify/Apple Podcasts every week and listen to other freelancers’ stories!