Part 1: From amateur to professional freelancer
7 months ago
The line between working as an amateur gig worker to working as a fully-fledged, professional freelancer may seem quite thin, but there are a handful of indicators that show if you’ve hit the next level. As an amateur, you’ll be accustomed to being recognised as a hobbyist that’s paid on an ad-hoc basis.
The leap between amateur to professional can be justified by the commercial nature of your work. Question yourself - is your skill a commodity? Can you provide an established service? Do you have a financial strategy in place?
We’ve rounded up few steps to help outline the development from amateur gig worker to established freelancer:
1) You are what you earn
As a freelancer, contractor or even an employee, it’s standard practise to measure work-life value by what you earn. If you’re an IT developer, the time and manpower spent on a single project is likely to vary, which means that the pricing will change for each client that you take on.
The first step is to research and then use these findings as a starting point. Be sure to tailor this rate to yourself which means taking note of your qualifications, expertise and actual experience.
You’ll also need to consider overheads – this means accounting for the expenses associated with running a business. There’s office space, marketing, equipment, software, broadband, internet, and project management resources etc.
Whilst calculating this, ensure to establish what should be billable and non-billable, e.g. if you’re due to carry out administrative tasks such as running an inventory or installing new software, these are typically classed as non-billable.
Read our interview with IPSE Freelancer of the Year 2017 Finalist, Adam Smith, as he discusses his top money-saving tips.
2) Setting a standardised procedure
At this stage, you’ll still be testing the waters which means that you’ll be establishing a procedure as trade comes along.
By setting up a standardised procedure, you’ll have a process in place which will essentially mark the journey that your client will undertake. So, there’s the initial consultation, progress reports, and the final review which will form the basic structure of your service.
3) Going Limited or Umbrella
There are a number of platforms that will allow you to offer your services as a freelancer, such as Upwork and Freelancer. However, two popular options chosen by freelancers are running through a limited company or selecting an umbrella company which essentially functions as a payroll service.
As the director of a limited company, you will be responsible for the day to day running of the Ltd company, including submitting statutory financial records. This option is often the most tax efficient way but this depends on the length of the contract.
By joining an umbrella service, the freelancer will essentially become an employee of the umbrella company. This will mean that you will be taxed at source which means that the umbrella company will automatically send your tax and national insurance to HMRC before making payment to you. To explore both options, read our Umbrella Vs Limited Company guide.
This blog is part of a two-part series- Part 2: From amateur to professional freelancer
If you would like to discuss which operating structure is suitable for you, get in touch with a member of our New Business Team by calling 330 024 0406 or email email@example.com.