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Making the leap: The iMG. guide to becoming a Freelancer

Movng on up

Moving on up.

 

At this stage you are now a freelancer! You have clients, money comes in, and things are going great. But what pitfalls are there? We have been there, and we are here to help. 

 

How will I manage everything? 

 

If you have been in a corporate business for many years, you will have got used to how things are, and how everyone has one role to do. 

 

Now your time is set to be spread across many clients, juggling multiple files, systems, ways of working and projects. The best way to get a handle on things is to use tech when you need it. Can you add some project management techniques or time management systems to your day? Use tools like your calendar to organise your time and think about chunking time. This is where you schedule time for similar tasks together so that you can get into a flow. Are you forgetful? Make a checklist of things you must check before you hit send. 

 

Keep immaculate files on your computer so you can easily find things and get militant with how you keep records. 

Go paperless. If you're the type of person who often needs to jot down notes or thoughts, don't leave stray text files across your computer. Think about physical sticky notes; they are designed as temporary mementos, not a permanent storage solution. The same goes for your digital life. Consider using a note-taking app like OneNoteEvernote, or a lightweight note-taking alternative.

I'm scared about taxes

 

As the saying goes 'tax doesn't need to be taxing'. Make sure you keep all your business receipts in one place.  You will then need to add up all your expenses at the end of the month and file the receipts. You can also do this digitally. By tracking this every month and taking 30 - 60 minutes to get things under control, you can ensure you avoid a 5 day emotional breakdown at the end of the financial year when you hunt for a receipt from February and end up chasing numbers around with a broom to make them add up. Use your accountant as a resource and invest in asking them to look at your records and help you get set up for success. 

 

Remember as well that being a freelancer means you’ll need to be self assessed. What catches a lot of people out is “Payment on Account”. So, if you’re doing things right, each month when you take money you’ll set aside money for taxes like personal or corporation tax. When you file your first tax return say £2,000 you’ll  need to pay that but another £2,000 over the course of the next year.

 

Simple calculation:

In April you submit your self assessment and your tax bill for last financial year was £2,000. By the 31st January the following year you will need to make a payment of £3,000 (£2,000 “Balancing Payment” and £1,000 “Payment on Account”). Then by the 31st July you will need to pay a further £1,000 “Payment on Account”. Don't worry, like when you were employed, if you end up paying too much or too little tax then the amount is calculated and adjusted on your next self assessment tax return.

I've lost my first client

 

The nature of freelance means some degree of uncertainty. Think of it this way - you've got a great new piece for your portfolio and hopefully a glowing review. Use this to spring into your next lead! Look at your success rates, tweak your website, create an offer or promotion, book a networking session- act on what you can control and don't worry about what you can't.  Use the knowledge gained to improve your next piece of work. 

I've got too much work! 

 

It's a scenario we all get to and it's a nice but stressful problem! At what point do you need support yourself? You can decide when is best to do this, but bear in mind that taking on employees is a whole new ball game with tax, holidays, pensions and other considerations. What may be helpful is to use the network of freelancers you’ve found. Can someone support you in a swap for your expertise? Also, relax a little. Sometimes work ebbs and flows. This week is hectic, but next week you might have Thursday to yourself and no plans. Start to track the peaks in your business so you can prepare for seasonal peaks and troughs. 

How do I set working hours?  

 

Boundaries are everything! Implement an email signature with your working hours, and check your contract includes any working days.  If a client wants to work with you outside these hours, it's ok to say no. You might want to consider charging a premium for this service as it will impact on your personal time. Try and stick to your own rules. If you have said you will be available between 10 – 4pm, don’t engage with the client unless it’s urgently needed beyond this.  If you breach how you’ve agreed to work, your client will think the rules aren’t that important after all. Some may cross your boundaries, and it’ll be hard for you to enforce the rules later. 

How do I take a holiday? 

 

If you are used to taking annual leave by begging a line manager to release you from your desk, it can be strange to take your own leave. How do you do it if you have regular clients? Will you be on your laptop on your sun lounger?

 

The truth is - maybe. Part of running a business is taking the rough with the smooth. Sometime a new launch happens on the exact day you will be travelling across Greece. You might need to be that person that's taking calls in the airport or upgrading to premium Wi-Fi. However, you can also shut off completely with warning. The key is communication and planning. Let your clients know well in advance when you are going to be away, and make sure you have someone who can cover for you if needed. This could be another freelancer from the iMG. community, or you may be able to preload the work. Don't leave it too late to tell them.

 

Remember though. You don’t get paid for holidays like you do in full time employment. Again,. that is why day rates are higher and should be used in your calculation to understand your magic number.

What if I don’t get paid? 

 

Non-payment or late payment is a curse on every business and freelancers are no different. Many large companies don't pay on time as their policy says they pay 60 days after invoice for example, which is another issue for another day! BUt if you have a client that hasn't [paid then the first step is to send a gentle reminder, which your accounting system can usually do for you automatically. Then, try a light phone call, and if this doesn't work you can move on to more formal methods. Often a 'final notice' letter is effective and the site www.mycreditcontrollers.co.uk has a variety of templates you can use. Send these by post with recorded, signed for delivery to show you mean business. Often, the payment is made very quickly, especially when they are reminded of additional late payment fees.

 

Debt collectors should be a last resort, and only for large amounts. They charge for their services, and the issue could go to court which can cost you money. There are many companies on LinkedIn with recommendations who can collect debt, and this may be a good way to find a suitable, professional firm if you are looking at this route. 

At the iMG. we handle all of our freelancer payments, taking on the challenge of corporate extended payment dates and long winded administrative processes so that our community are protected and can concentrate on doing brilliant work. 

What if a client is unhappy with the work?   

 

The first step is to take a deep breath and look at the work with fresh eyes - can you see what they are unhappy with? If not, ask them to point it out. Once you know what the problem is, can you fix it quickly and easily? If so, do that and apologise for the inconvenience. If not, then you need to have a conversation about whether redoing the work is an option - sometimes it's just not possible. In this case, you might need to refund the client part or all their fee. This is a last resort though, and you should always try to come to an agreement first. 

 

Remember to try and avoid burning bridges. Sometimes you must take a loss on the chin! Having a good initial contract that specifically details what you are doing, what's in scope etc is worth its weight in gold in these situations. Take time to set up contracts right.

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