The gig economy has opened a whole new realm of business opportunities around the world. Freelance work happens to be one of the many business opportunities the digital age is providing. The UK economy has witnessed a massive influx in the freelance career over the last few years. Young graduates are taking the freelance journey either to get rid of the shackles of full-time jobs or to earn and save more money on top of their regular salary. An independent contractor in the UK makes an average of £13.77 per hour.
What is freelancing all about?
Freelance business means providing expert services to multiple potential clients and firms under a contract. A freelance business is free to provide any type of service ranging from content writing, IT development to subject specialised coaching and accounting. These individuals can also be referred to as independent contractors.
According to the statistics revealed by Micro Biz Mag, there are currently over 2 million freelance businesses operating across the UK. Almost 89% of these workers are pursuing freelancing full time. At the same time, the other portion of these independent contractors takes part in freelancing as a second job. It has also been revealed that these freelancers currently contribute about 125 billion pounds to the UK economy, which makes them very important and valuable members of the entire UK workforce.
What trading structures can be used when freelancing?
The freelance career allows you to either operate as a sole trader or establish your own limited company. The primary difference between the two is that if you go as a sole trader, then there is no legal separation between you and your freelancing service. At the same time, if you establish your own limited company, then your company holds a separate legal entity, and you have no personal liability in that company.
As a sole trader, you’ll be personally required to manage your expenses, debts, and you’ll have to work out your annual taxes all by yourself. For limited companies, self-employed individuals have their specific legal and statutory obligations which they required to fulfil as a director of the company. Tax implications are different for both types of business structures. Therefore, a potential freelancer seeks advice from expert business advisors to help them select the best trading structure for their freelance project.
What are the types of freelancing you should consider?
The freelance gig economy has extended its platform of endless opportunities to people so that they can utilise their talent and skills to develop their own small business and enjoy more freedom in their daily life. In this section, we will shed light on the different types of freelancing and the roles they can take in the modern-day industry.
We live in the digital age where the internet has become a necessity of daily life. More people are now learning IT-related skills to introduce new mobile applications in the virtual world. Due to the increased demand for IT development, freelancers have more opportunities to work in the tech sector now than ever before. They can join the freelancing sector as a full time:
- Web App developer
- Native App developer
- Chatbot designer
- Game developer
The small business industry cannot afford to hire full-time consultants to devise critical strategies and plannings for businesses. Therefore, they offer freelance jobs against per hour or per project to help them with complex processes. If you are confident about your consultancy skills and knowledge, then you can use these skills as a freelance idea and can earn money as per hour or per project.
- Planning consultant for businesses
- Strategy consultant for businesses
- Pricing consultant
- IT consultant
If you have a degree in software engineering and you want to work as a part-time freelancer, you should work in the Software development industry. Apart from the part-time option, you can get work on the per month basis if a client is working on a comparatively big project. If you are getting independent and is opting for self-employment, you might be able to increase your income per month by working as:
- Software Developer
- Website developer
- Data scientist
Content Writing is one freelance job that you can start with little to no resources if you have the skills in quality creative writing. With the demands of the digital presence of businesses, the search for quality content writers is gradually increasing to get on top of the Google ranks. Organisations hire freelance and in-house writers to start creating new projects to get benefits of organic traffic on the internet.
A freelancer in the content writing industry may work up to an hour to multiple hours on a project and can earn income depending on the words count or may find a client willing to hire them for a contract based term. People opting for this kind of freelance job are able to search, read, analyse, and create articles, blog posts, and much more. You can opt for this career to utilise a million opportunities coming your way by providing following benefits to people:
- Creating Content Strategy Design
- Academic writing
- technical writing
- creative writing
- social media writing
Administrative services will have their client base as long as businesses around the world are working and running. Small businesses are more likely to seek support administrative support from a third-party. You can fill the gap and can find work by taking on any role mentioned below for businesses offering administrative freelance jobs:
- Administrative assistant
- Virtual assistant
E-learning has taken the world by storm since the last few decades. A freelancer can excel in this sector as well as the companies wishing to offer an e-learning aspect. Usually, businesses are not much interested in the development of a highly motivated and dedicated e-learning team, or they can’t afford it. Thus, these companies look for external support to meet their goals and objectives. Here are the roles freelancers can take regarding e-learning:
- Instructional designer
- E-learning consultant
Digital marketing is gradually replacing the traditional methods of promotions due to which graphic designing can be considered as an essential component of the branding of businesses. Graphic designing is one of the highly demanded skills in the UK, and more companies are offering freelance jobs to hire an external graphic designer to grab the attention of potential clients.
You can work as an independent contractor for companies near you, or you can search for potential clients on online social platforms like Upwork, Fiverr, or freelancers. Freelance Jobs in the graphic design sector can be of:
- 1. Digital illustrator
- 2. Logo designer
- 3. Print designer
- 4. Brand identity designer
- Packaging designer
Photographers are always in high demand in the freelancing market, be it a wedding, business or print media. Freelance photographers can find work and get paid by potential clients in one of the following niches:
- 1. Photojournalist
- 2. Advertising photography
- 3. Real estate photographer
- 4. Product photography
- 5. Fashion photographer
- 6. Wedding photographer
Videography is a highly specialised field and requires the assistance of an expert freelancer videographer to do it right. For this reason, companies and organisations around the globe prefer to outsource independent contractor offering videography skills and the following set of videography services.
- 1. Director
- 2. Producer
- 3. Commercial videographer
- 4. Video editor
- 5. Production assistant
- 6. Set designer
Web-development services are in very high demand in today’s marketplace. Here are some roles freelancers can take to provide web development services and to avail income benefits.
- 1. Back-end developer
- 2. Front-end developer
- 3. Full Stack developer
- 4. Mobile web developer
Here is a list of some of the most popular sectors for freelancing in the UK starting from the most popular to the least popular:
- Business support
- Writing and translation
- Sales and marketing
- Video, photo and Audio
- Websites management
- App development and mobile
- Social media management
What do you need to know about freelance marketing?
With the help of freelance marketing, a self-employed individual gets the opportunity to provide services to and with multiple businesses as a marketing professional. These marketers usually provide one or more than one specialised marketing services to their clients.
One of the primary reasons behind the soaring popularity of freelance marketing is that it offers so many aspects and specializations that excites individuals to learn and specialise in a specific component to carry on with their journey. Here are some of the most common roles freelancers can take under the marketing umbrella
2. Email marketer
3. SEO specialist
4. E-commerce manager
5. Social media marketer
6. Content strategist
7. Product marketer
How to get started with your freelancing journey-ultimate guideline
The freelance journey is full of ups and downs, it can be very challenging, but if you are able to meet your targets on time, then it can be highly rewarding as well. The main purpose of curating this guide is to provide you with useful expertise and tips to help you become a prosperous freelancer. This section will provide step by step guidelines on how you can get started with your freelancing service.
Step 1: Register your business.
Freelancing comes with numerous legal and financial flexibilities; you can either choose to work as a sole trader or operate as a limited company. It’s up to you to decide what to choose. You can go for the sole trader option and work from a personal bank account, or you can always register your service as an LTD to open a bank account and protect your assets from personal liabilities.
Step 2: Setting up your work station
Most of the individuals pursue freelancing because of the work flexibility it offers in terms of physical location or workspace. You can work from anywhere you like. It’s advisable to provide your freelancing services from a physical workplace where your productivity, motivation and focus are at maximum.
You have the option to work on your laptop in a local coffee shop or restaurant. Plus, most of the freelancing projects you will be working are much more conducive to remote workers. You can also work from home if you don’t wish to go outside and want to save more by avoiding transports and expensive coffee places. Whatever physical space you prefer, you must ensure that its distraction-free and provides you with the perfect work environment.
Step 3: Approaching clients and jobs
Business people around the globe are always in search of a freelancer to manage different aspects of their business. Thus, freelancing is usually high in demand, depending upon the sector they are working in. The quickest way to find clients and work is by using online freelance platforms like Fiverr, Upwork, etc. These online freelancing platforms have become immensely popular over the past few years.
These platforms provide freelancers with the opportunity to showcase their skills, share their portfolio, view freelance contracts and negotiate rates. From the client-side, they are pretty confident that they will find a large pool of freelancers ready to offer the type of services they are seeking. An online platform lets the client browse talent and skills of a large pool of interested candidates along with their achievements and prior experience without setting up a formal interview. They can then shortlist anyone who they believe fits the job criteria.
Step 4: Work on your freelance profile
You need to remember that there are millions of freelancers around the world currently looking for business opportunities on online freelance platforms. With that said, it’s imperative to have a winning freelance profile, the one which instantly hooks the interest of the clients when they are scrolling down the lengthy list of interested candidates. Your portfolio on website platforms reflects your professionalism, expertise, credibility and talent. If you don’t have any prior achievements to share, then you must work hard to create an attractive portfolio on an online platform.
Neither there will be any face-to-face interaction with the clients initially, nor they have worked with you in the past, so your portfolio must be appealing and professional in order to shortlist yourself. There are many downsides to having a bad profile like low rates, fewer contracts and much more, so it’s advisable to work on a profile that gets the clients desperately waiting for your response. Competition is tough, and there is no room for ignorance and errors.
Step 5: Pricing your freelance work
One of the most frequently asked questions by freelancers is about how much rates should they charge for a particular project or service. Negotiating prices on online platforms like Upwork or Fiverr can be like walking a very fine line. The freelancers are usually hesitant to ask for a higher rate in fear that the client might end up outsourcing their work to others. On the other hand, freelancers do not want to work at a low pace as they intend to earn more profits with less effort. Since you are giving in much of your time to freelancing and providing valuable services that are high in demand, you must be compensated accordingly. But how do you factor in these aspects while calculating the prices? Speak to a professional business accountant to help you price your freelance work rightfully.
We will be discussing the three best pricing strategies that most of the freelancers use to set their product pricing. You can either choose one of them or go for a combination of any two or all three of them.
1. Cost-plus pricing
The cost-plus pricing strategy is based on the cost incurred to complete a particular project and taking on around 20-30% as profit. This pricing strategy is considered ideal for freelancers who have to use physical inventory or capital and are fully aware of how much it takes to complete a project or service. This strategy might not be feasible for content writers or web developers since they aren’t using any physical material. Still, if you want to go for it, you can take your valuable time into account.
2. Market rate pricing
Market rate pricing strategy takes into account the average rate offered in the markets and calculating your rates based on what freelancers in the same market are charging. With market-rate pricing under consideration, you must take a close look at your industry, your physical location and your competitors with the same amount of experience.
3. Value-based pricing
The third pricing strategy freelancers can adopt is value-based pricing in which rates are negotiated and decided after taking the true worth and value of the services you are providing. This implies that your rates will vary according to the project you take and the clients you work with. For instance, writing articles for a multinational marketing firm might hold more value than the article you write for a local firm nearby. Thus, you are going to charge more for the article you write for the multinational firm.
How much should you charge?
Many freelancers charge for their services according to the project they get, in case of writers, they charger per word written. Your rate should be somewhat based on the nature of services you are providing and the effort you would have to put in to get the job done. You can negotiate for hourly fees or can make money once the project is completed.
Keep in mind that going for hourly fees will take the value of your time under consideration. In contrast, fixed pricing getting fully paid takes the value you are providing to the client under consideration.
Is it advisable to publish your rates on websites?
Publishing your product pricing on the website is entirely up to you. There is no specific recommendation on whether you should publish your pricing on website or not. Some freelancers prefer to publish their prices on the website to show professionalism and develop a perception around their overall value. This may help filter out unworthy clients who don’t have enough to pay you back in exchange for the value you provide.
Other freelancers find it more feasible to keep their pricing private in order to have a face-to-face or telephonic interaction with the clients. This also leaves room for price negotiation, which becomes somewhat difficult when you publish fixed pricing on the website.
Step 6: Saying yes to the right job
Being a freelancer, you might feel the urge to accept every project that comes along the way. You might end up accepting a lot of projects on your way just because you don’t want to sit idle and out of work in the coming months. Still, it’s advisable to look at your time schedule and examine your personal capacity to find whether you will be able to complete the job on time or not.
When you accept every project available, you increase your chances of selecting the wrong jobs. Before you scroll the list of available projects, you should learn how to reject the offer. You should know how to write a winning proposal and land your first employment after going studying the job description in detail. Plus, you will come across different long-term and short-term projects, so it’s advisable to understand the pros and cons of both the types of the contract before you sign yourself in.
Finances in Freelancing
Freelance service work is all about making managing finances to enjoy a higher level of profits. Managing the finances of an organization can be daunting and exhausting, but for freelancers, it can become even more complication. Therefore, freelancers need to have sufficient knowledge about finance management like invoicing along with the knowledge about professional tools that can help manage their money requirements efficiently.
The price negotiation is just the beginning; the real part begins when you have to issue new invoices, working out your bills, receiving income and managing the daily freelancing expenses.
The billing process, along with income management, was somewhat difficult few decades back. Still, with the greater influx of technology in daily practices, finances are much easier to manage now than they were ever before. Technology provides them with a single platform where they can do everything from building their profile and rate negotiation to invoicing and debt management.
Get used to the following financial management tools to get your financial and tax game strong:
Experts believe that organizations and freelancers should make the best use of these tools to innovate their current practices from old traditional ones. These tools can help you work your finances on a single spreadsheet, create invoices, process payments through multiple channels, work out taxes and can even send payment reminders to clients who owe you money.
We will now take invoicing and billing under consideration and provide you with useful tips and techniques to mitigate the risks of incorrect invoicing and not getting paid from clients.
Here are some things to consider when invoicing:
Request for 50% advance payment
Getting half paid in advance is what most freelancers do to start working on the projects, and you should too. Most of the freelancers today only start working on their projects when their clients have paid in advance. This is justified, as you have daily business costs to cover plus if your client does pay you then this is a show of good faith from them and tells us more about their loyalty and trust in your work.
Your invoice should be specific:
Your invoice should list down the due dates, terms and everything related to pricing. Include every relevant information like the number of products delivered, if it were a manufacturing project, and the price charged for each. If you wish to breakdown your costs on your invoice to make it seem more justified, go ahead. You have to ensure that your client doesn’t get away with money that you should rightfully receive. Just remember that in business, each penny counts.
Stick to the pre-agreed terms:
If you have negotiated the legal terms with your clients, say you want to get paid every week, then invoice your clients weekly. Do not start invoicing them daily if you have already decided weekly; this will damage your credibility and reputation. We advise you to stick to whatever terms you have decided with your client because it shows professionalism and trustworthiness and doesn’t encourage the clients to stop doing business with you in the future.
Open multiple payment channels:
We mentioned some of the best financial tools above; these tools have the capability to process multiple types of digital payment. It doesn’t necessarily mean that you stop relying on the old traditional methods of payment; these channels can be advantageous at times too. Make sure you mention the accurate P.O box and business address on your invoices so that the client can easily send you the payments on that address. When you offer multiple payment options, you increase the chances of receiving quick payments from your clients.Business & Finance Articles on Business 2 Community