9 things you need to sort before going freelance
Going freelance is the dream for many creatives. For many it’s all about getting out of the 9-to-5 and working for themselves, while for others it’s the first step on the way to setting up their own agency. Whatever your reasons for going freelance, though, it’s essential that you put in some preparation first.
You might have some great contacts and a killer design portfolio, but if you want the transition to freelance life to go smoothly, there are plenty of things to sort out in advance. For all the advice you’re ever likely to need, read our in-depth freelance survival guide; however, to get you going in the right direction, here are nine things that you absolutely need to get sorted in advance of the big day,
01. Get some money in the bank
Nobody goes freelance in the expectation of not making a living, but the fact is that while you’re starting out you could find yourself running out of money. Even if you have plenty of work lined up from day one, you’re likely to have to face a period of zero income between your final pay cheque and the first of your invoices getting paid.
If you plan ahead though, and start saving up a decent cash buffer a few months in advance – say, enough to get you through two or three months with nothing coming in – you should be well prepared to get through those cash-strapped early days.
02. Register as self-employed
Now that you’re no longer an employee getting your tax handled for you through PAYE, you need to make yourself known to HMRC to prevent tax problems cropping up further down the line. It’s not fun but it needs to be tackled sooner rather than later, and thankfully it’s pretty straightforward to register as self-employed through the HMRC website (don’t attempt to do it over the phone unless you really enjoy listening to hold music).
When you’re starting out as a freelancer, you’re most likely to want to register as a sole trader; once your practice grows it might become necessary to set up a limited company, but you’re unlikely to need to worry about that right now.
03. Decide where you’re going to work
This might sound like a trivial part of the process, but the business of where you work can have quite an impact on your productivity. Many designers and illustrators are already set up to work from home and find it easy to carry on in that vein, but you may well find that while this was a great setup for after-hours side projects, it’s not so good on a full-time basis.
If you feel that you need to get out of the house and actually go to work, look for local co-working spaces where you can hire a desk for as many days a month as you need. It’ll give your working life some much-needed structure, and it’s also likely to present you with plenty of networking opportunities.
04. Start a spreadsheet
This one’s simple to do but easy to put off, and the longer you wait the harder it’ll be to catch up later. Create a spreadsheet detailing all your income and outgoings, and remember to keep it updated. It doesn’t have to be especially complex, all you need is a record of everything you’ve earned and spent over the tax year so that by the time comes to tackle your self-assessment return you can do a couple of simple sums and you’ll have the two most important numbers for it: what you’ve earned and what expenses you can offset against tax.
05. Find your clients
If you’ve made the decision to go freelance then it’s likely that you already have a pretty firm idea of who you want to work with (and some expectation that they’ll want to hire you). The last thing you want, though, is to make the leap to freelance and then find out on day one that there isn’t any work about, so it pays to prepare in advance.
Once you’ve committed to going freelance, work up a hit list of your preferred clients and get in touch. Some of them will probably already know you, others will need a fuller briefing; in both cases, let them know when you’ll be available and what you can do for them. After a few of these conversations you should be set up to start work on your first freelance day.
06. Get an accountant – maybe
Do you need an accountant? That’s a million dollar question with no easy answer. If you’re setting up as a sole trader, have a firm idea of what you’re going to earn over your first year and it’s not going to take you into any higher tax brackets (we know, chance would be a fine thing), and you’re not likely to rack up loads of complex expenses, it’s not too hard to sort out your own tax.
That said, if you’re not comfortable with that side of the business, or if you expect your business to grow pretty quickly, an accountant can be an absolute godsend (and the fees can be offset against tax). If you’re not sure, find a local accountant and go in for a chat.
It’s a given that you need a social media footprint to promote yourself and your company, and it’s almost certain that you already have personal accounts set up across various platforms. But as with the question of whether you want to work from home or not, you need to ask yourself whether you want to use these accounts to promote your freelance career.
Many freelancers cope perfectly well with accounts that mix personal and work, but you might well prefer to separate those strands. It’s good to have discrete accounts that are all about the work – especially if you consider that potential clients might not really want to know what you thought about the end of Game of Thrones – and while juggling multiple Twitter and Instagram accounts can be a bit of a hassle, it can really help you present a more professional face to the world where it counts.
08. Build your portfolio
Here’s another of those things that you probably already have mostly sorted, but which will need some work before you’re good to go. If you’re ready to go freelance then you’ve undoubtedly built up a strong a body of work, but what you may not have done is build it into a portfolio that gets the message across quickly and efficiently.
Simply dumping all your work onto Behance isn’t enough; you need to create a focused portfolio that tells your story and demonstrates how much of an essential hire you are. Follow our tips on how to curate a creative portfolio and you’ll soon be on the right track.
09. Be prepared for tax
Yes, we’ve already mentioned tax a couple of times already, and with good reason: if you’re not adequately prepared for it, the tax system can still catch you out. Even if you’re diligently setting aside a proportion of your income for tax, your first tax return may well surprise you by asking for a lot more money than you’d bargained for, thanks to payments on account.
In short: you file your self assessment tax return and get your bill, but on top of that payment, HMRC will also ask for the first of two payments on account for the next tax year, and this will be in the region of half your estimated bill for that year. There’s nothing quite like the shock of thinking you were all sorted, tax-wise, then finding that your bill’s roughly 50 per cent more than you anticipated, so make sure that in your first year of business you’re putting some extra aside to cover it. For more tax advice, take a look at our tax return tips for freelancers.