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Everything You Need to Know About Freelancing

In conjunction with this week's Talent Fest 2020: Jobs Fair, we spoke to a range of experts to get their advice on how to be successful at freelancing. We covered many aspects from how to set yourself up and handle your finances, to where to find work and connect with others.

A huge thank you to Bonamy Waddell, Belle Mellor, Paul Silver, Hayley Maisey and Plus Accounting for contributing to this blog post and sharing their expertise!
 

Promoting yourself and finding work

For finding work, it is vital to build relationships and start networking. People need to know you exist, that you are available for work and that you have the skills they need to solve a problem for them. Referrals and word of mouth recommendations are invaluable, so the aim is to get to know as many people as possible who can send work in your direction when they come across it. 

The more you can do to become the person that people think of in your area of expertise, the better. Attending networking events such as Wired Sussex meetups, or contacting and meeting people you would like to work with for a chat to explain what you can offer them are great ways to start. If you can't meet up with them in person, you could email people with an overview selling yourself and your services.
 

People buy people – so I cannot underestimate the importance of networking to build those relationships.
- Bonamy Waddell


As well as talking to people directly, find online groups that cover your type of work and post in them that you're a freelancer who is available for work. LinkedIn is an excellent place to start in terms of researching groups and communities that cover your field of work. 

There are lots of ways in which you can promote your skills and services. A first step is to have an online presence, whether that is a dedicated website or a strong social media profile. 

Our freelancers agreed that it's essential to identify your area of expertise. Writing expert blog posts or thought pieces that you can then share across several platforms (and that others will share on social media too) is a great way to become known to a broader audience.
 

Focus your attention where your audience is. 
- Hayley Maisey


If you are a member of Wired Sussex, you can ensure your profile on the directory is up to date and full of information about what you can offer with showcases and testimonials to demonstrate how you have helped others with your skills.

You should also be proactively searching for any advertised freelance work. At Wired Sussex, we also have a Commissions & Briefs board where companies regularly post freelance opportunities. You can set up alerts via the site so that you never miss a post.
 

How much should I charge? Setting your rate card and quoting for work

When it comes to price, some clients will ask you to quote for a whole project whereas others will want to know your daily or hourly rates, so it's essential to be able to provide either on request.
 

Fixed price projects

For a set price piece you will need to do some thorough work upfront to define precisely what is required and how the client will measure success to work out how much time you think it will take you to do the job well. Depending on the size of a project like this, you might want to suggest breaking the project down into milestones so that you can bill the client at key stages rather than having to wait until the end of the whole project. If the work requires an upfront outlying of costs on your behalf, then you should consider asking for a portion of the fee upfront. 

If it is a reasonably complex project with some unknowns which are hard to estimate, you could also ask the client to hold a contingency fund (“a reserve of money set aside to cover possible unforeseen future expenses”). It is common for clients to change their minds about part of their site or app once they can see it working, so a contingency can cover a certain number of changes if agreed along the way.

When working to a fixed budget for a project, it is a good idea to agree on the number of revisions a client can have, e.g. for design work it is common to decide a set amount of drafts to gather feedback on before building the final designs. This method can help stop a project growing beyond the scope of the agreed price.

For this type of work, freelancers also sometimes have a clause in their contracts so that if a job is cancelled partway through work, the client must pay for the work done up to the point they stop the work. 
 

Rate card projects

For ongoing freelance work, clients might prefer to agree to a rate for a certain amount of time per hour, day or month as long as they can understand how much work they will receive within the timeframes agreed.

It is difficult to advise on what your day rate should be as it varies hugely on what skills you can offer. As a general ballpark figure, most freelancers in Brighton or the surrounding area should be comfortable charging around £250 a day. Some groups will help you determine your worth if you are struggling to put a price on your services. For example, any freelancer (or potential freelancer) would be welcome to visit The Farm networking group and discuss what they should be charging. If working in this manner, you might want to also agree to a notice period with the client.
 

Should I make clients sign a contract?

It is a lot easier to solve problems later if the client has signed an agreement, and given you a definite "go ahead" by email.
 
Often a contract will be provided by the company you agree to work for, and you just need to check your terms align. If some elements are missing, you can usually provide a paragraph in an email as a supplement when you send the contract back.
 
If you need to provide the contract, there are templates available. A useful template contract and advice is "Contract Killer, open-source contract" by Andy Clarke.
 

What if a client doesn't pay?

To avoid this scenario altogether, it's a good idea to be clear up front what your payment terms are and that the customer agrees to them and to have regular reminders set up of when the money is due.

Most freelancers are lucky enough to have only had these issues a couple of times. However, if you do have problems and need to claim money that hasn't been paid, here is some advice from Plus Accounting:
 

As long as the value of the claim is less than £10,000, you may be able to submit a small claim yourself. The small claims track is a simplified system for dealing with these claims designed to be less formal and more accessible to litigants in person. A small claim can be made either online or through the County Court.
- Emma Hardwick, Plus Accounting 


You could also choose to refer the matter to a debt collection agency to recover the money. These agencies will work with you to find ways to resolve your outstanding liabilities; they usually charge a percentage of what you recover as a fee.
 

How should you manage your time and workload?

As a freelancer, you will need to find tools and methods for managing your time that suit the way you like to work.

One common technique many of our experts used to help productivity is the Pomodoro technique that you can read more about here. There are also software solutions out there that can help you keep track of the time that you are charging to clients. Sites like myhours.com offer a free tool to allow you to track time which you can then refer to on invoices. 

In terms of managing tasks, Trello is another tool that was very popular with the freelance experts we interviewed. If you are not already familiar you can experiment by registering for a free account.

While we all have our preferred tools and methods of work, it's also important to be flexible and align with clients. Always be open to adapting to their favourite ways of working and the platforms that they use to manage projects and time too.

It was nice to hear that in addition to all of these digital tools and platforms, the good old fashioned pen and paper was still a top resource for all of our experts!
 

What are the benefits of joining a coworking space?

This one might seem like a strange question, given our current lockdown, but we are looking forward to returning to our physical office spaces and communities, so thought it would be helpful to look at some of the pros and cons of coworking spaces. 

One of the key benefits of joining space is being part of a community and meeting new people that will help you enormously in terms of becoming known and hearing about leads for further work. Having those water-cooler moments to share ideas with others and listen to what they are working on will spark energy and creativity and keep you inspired. The more involved you become in a community, the more help and support you will have when you need it too.

The obvious downside is the monthly cost that may seem daunting until you have created a regular income. There may also be times when you need more space or don't want to be distracted by sharing a space with others. The balance found by most of our experts was working in a variety of ways; working from home, working in coworking spaces and working from client offices where appropriate.
 
Brighton is particularly well served for coworking spaces, but there are also spaces in Worthing, Horsham, and Eastbourne. It's well worth searching for one near you and asking for a trial.
 

I currently use The Skiff. They have a great, friendly bunch of people there, big desks, and monitors you can borrow to get a much bigger screen than my laptop has. I've been a member there for years and thoroughly recommend it.
- Paul Silver


Where else can I connect with other freelancers?

There are lots of different ways to communicate with freelancers outside of coworking spaces. There are many membership organisations, like us, Wired Sussex, Brighton Chamber and Thrive, that have networks and events where you can get to know people in similar positions.

Given the restrictions with the Covid-19 pandemic currently stopping physical meetups, look for online events and virtual meetups to attend. You can find many of these on our Wired Sussex Events calendar. You can also take to social media to connect with others and look for that sense of community.
 

Social media is amazing for creating conversation and building connections. Twitter and LinkedIn are good networking platforms, as are Facebook and Instagram depending on your offering and the other freelancers you want to connect with.
- Hayley Maisey


Once we can meet in person again, there are lots of events like the one The Farm holds weekly to bring people together.
 

Freelancers can meet other freelancers, pick up bits of work, vent to people who understand the problems projects can give you, and learn things about business or technology they didn't realise they needed to know.
- Paul Silver


How do I decide what the best freelance status is for me? Self-employed or sole trader?

Of all the choices you make when starting a business, one of the most important is the type of legal structure you select for your company. Not only will this decision have an impact on how much tax you pay, but it will also affect your level of paperwork, the level of personal liability and your ability to raise money.

Emma from Plus Accounting gave us this advice on the main ways you can structure your business:

  • A sole trader is a person who sets up their own business individually and is self-employed. You will personally take responsibility for its success or failure, but you will keep all your business profits after you've paid tax on them. The benefits are that this structure is easy to set up with HMRC and you can keep your records to file directly with HMRC.
     
  • A partnership is more than one person wishing to share the responsibility in business. The partnership does not bear the tax burden, the profits or losses are 'passed through' to the partners to declare on their personal tax returns. A partnership offers an opportunity to jointly manage business decisions, so you're not left to feel that you are on your own.
     
  • Private Limited Company is where the owners are only legally responsible to the extent of capital invested (shares). The benefit from this arrangement is that the directors avoid any personal liability for tax and legal matters, and the limited company status can hold greater credibility to customers and suppliers. There are some extra costs such as setting up the company and the cost of preparing statutory accounts which are then shown on public record.

The freelancers we spoke to were a mixture of sole traders and limited companies depending on the focus of their work and how they felt comfortable operating. If you're not sure, it can be helpful to get the advice on an accountant upfront to help you with that decision.
 

How do I manage my finances?

Many freelancers we spoke to take the approach of putting a percentage of all income into a separate "tax account" and not touching it. Typically as a sole trader, saving 20% of your profit should be sufficient to cover tax and national insurance for the amount you will need to pay after you reach the taxable profit limits.

However, if in the first year you don't expect your profits to hit £12,500, then you will only have a small amount of national insurance to pay and no tax.

Also, something to consider is whether you have other taxable income such as rental income or a secondary employed job as this will all count towards your tax bands.

If you are a sole trader there is no legal requirement to have a separate business account from your personal one, but it is highly recommended; however, if you set up as a Limited company status, you will have to have a separate bank account for the company.
 

How do I keep track of my records?

As soon as you start looking into trading or setting up a business, start a simple spreadsheet of expenditure to ensure you keep a record of all your costs. A simple spreadsheet should contain dates, amounts paid, who you paid and what was it for.

Tracking this detail will ensure you know what you spent and what it was for which will be vital when it comes to preparing your first tax return.

When you come to raise your first sales invoices, you could just create these in Google docs or Word or you could look into one of the many book-keeping applications to help create and send your invoices.
 

What can I claim as part of my business expenses?

There are lots of costs that you can claim back. You can check this with an accountant or HMRC. Mark from Plus Accounting told us:

The general rule for expenses is that if it has been incurred in the course of undertaking your trade, it is likely to be allowable. Common expenses include the likes of travel, insurance, accountancy and stationery. You are also able to claim costs for business use for some costs, like mobile phone bills or internet charges. You would calculate a reasonable business % of these costs based on how much you use it for business, like say 50%, and then you can include 50% of the total cost as a deduction against your profits. 

If you work from home, you can also include a claim against home costs incurred. HMRC allows either a fixed rate claim based on the number of hours you work at home each month, or you can do a full calculation and include a proportion of the total costs incurred based on business hours worked and the number of living rooms available in your home. An example of the fixed-rate claim is if you worked 50 hours at home in one month, you are allowed to include a £10 expense claim for that month. The number of hours you work at home each month may vary so you may have different expense claims amounts for each month.
 

Do I need an accountant? Where do I find a good one?

You are not required to have an accountant to submit a tax return. Some of our freelancers recommend working with an accountant while others are happy to do their accountants themselves. 

You can file self-assessment tax returns yourself by using HMRC's online tax return system. It is very much a personal preference and how comfortable you are with your figures and what you should or shouldn't include. It may also depend on the complexity of your tax return as you may have other sources of income like property rental income to consider. 

Did you know? Plus Accounting shared a handy guide to self-assessment tax returns. Check it out.

If you have friends or colleagues who have tax returns to complete and use an accountant themselves, you can get their opinion of how they find working with their accountant. Online searches can be used, and checking an accountant's website helps to get an idea and feel for what type of accountant they are, but it would be worthwhile having a face-to-face meeting if possible.

Plus Accounting offers free, no-obligation consultation meetings to find out more about you and your trade and discuss what services and support they can provide for you as well as likely fees involved for these services.

We hope you have found this post a useful insight into freelancing. Thanks again for all the advice and expertise gathered from our Wired Sussex freelance community. Thank you also to Plus Accounting who are sponsors of Talent Fest 2020 and provided much of the financial information for this article.

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