We asked Jimmy Sheehan, Managing Director with Contracting PLUS an Umbrella Company provider and specialist accountants to independent professionals – to share his thoughts and advice to ensure you give yourself the best possible chance of success as a freelancer.
When you work as a Freelancer (or independent contractor, self-employed professional, or entrepreneur), you are ultimately your own boss which brings a lot of satisfaction. You control your earning power and your financial destiny. You choose the clients you work with and the late nights are your choice – not someone else’s.
While you may be confident in your ability to deliver a great service, it is worthwhile taking a step back first to set out a plan which gives your business the best chance of success.
- Decide the work you’re going to do – and have the confidence to say no.
This sounds obvious but from my own experience of starting my first business, I wish I’d stuck to my guns and had a little more confidence in myself. It’s easy to say yes to lower value or piecemeal work just to tide you over until the better client comes along. Unfortunately, what happens too often is you get so bogged down in all the ‘little bits’ that don’t actually pay well, that you have no time to focus on looking for the higher value projects you want. Say no to work you don’t want, and back yourself.
- Get used to the right mix of resilience and tenacity.
Similar to the point made above, you must have the resilience to wait for the right contract to get signed. You must also have the tenacity to get up and get out every day and keep networking and looking for work. You’re not just accountable for delivering the work, but also for finding it. Think now about the hurdles you’re likely to face and have a plan for how you’ll deal with those (like longer than anticipated gaps in work or pitching for business you know you can’t complete on your own).
- Have three months (minimum) of income in the bank before you jump.
There’s nothing worse than having your back against the wall. You’ll panic and make decisions you’ll regret. The biggest stress reliever in starting any business is knowing you can pay for your home and feed yourself (and your family). When you can’t do that, you’ll take on any work and will do it for less money than you should.
In an ideal world you’ll have your first project(s) lined up or have started them. Bear in mind it can also take 60 days to get paid so depending on the type of work you do consider milestone payments and/or deposits. If people trust you, and they’re serious about the benefit your service will bring them, they’ll typically have no problem paying you on terms agreed upfront. There are still some bad payers out there though which is annoying, so consider tools like Stripe and GoCardless to minimise the risk of not getting paid.
- Get your set-up and tax right from the start.
You can claim start-up expenses which you incurred in the three years prior to starting your business if these expenses were incurred solely to allow you start your business. Think training, laptops, marketing & research as common examples. I always recommend using a limited company (the reasons why would take up a whole different article). It’s so easy today with companies like Contracting PLUS who can do this for free and then look after all your invoicing, payroll and bookkeeping for a fixed affordable monthly cost. Shop around and find an accountant you’re comfortable with. Their advice will be worth more in tax savings and good ideas over the course of your business career.
- Make a one-page business plan and hang it up.
Studies have shown that writing something down makes it more likely to happen. An oversimplification of how this works is this; to write down an idea or plan takes more thought and detail than to just think it. The more vivid it is in detail, the more it gets thought about, which means more of it is remembered in long-term memory, and so you don’t forget to do what you’ve written down.
Your plan should be about the things you need to see happen to be successful; how much will you charge, what type of work will you do, what work will you not do, how often will you network, where, when and how will you look for business, what personal/family time will you not compromise on, how many new clients will you need every month.
Write it all down and hang it up where you’ll see it (the fridge is a good spot!).
- I’m well aware I said 5 steps and we’re on number 6, but I believe in always learning. Become a reader of business books and self-help books. You don’t need to read voraciously; just a couple of pages a day. If you don’t know where to start I’d recommend ‘Oversubscribed’ (Daniel Priestly), ‘The $100 Startup’ (Chris Guillebeau) and ‘The E-Myth Revisited’ (Michael E.Gerber).
Good luck, work hard and don’t take anything personally – it’s just business.
Jimmy Sheehan is an experienced accountant, business owner, husband and dad of 4. He is Managing Director of Contracting PLUS, and his vision is to help professional freelancers and independent contractors succeed in their work by providing a simple platform to allow them manage all aspects of their business from invoicing clients to year-end tax returns and everything in-between his side-hustle is investing in SME businesses.