2 Jan 2017
Who hasn’t dreamt of leaving their job to set up their own business? Your dreams don’t have to comprise a Lord Sugar-type boardroom – FSB figures show there are 4.2 million ‘non-employing businesses’ in the UK which comprise 76% of all UK companies. So making a living out of freelancing or becoming one of the country’s many ‘solopreneurs’ is more than possible.
Having a good business idea, talent and the ability to work hard are all vital tools in any freelancer’s kit, but they’re not necessarily a guarantee that you will be successful. Freelancers face a number of business challenges which, coming from a background of regular employment, they may not necessarily be expecting. As a useful guide, we’ve put together our top 7:
1 – Feast or famine
Talk to any freelancer and you’ll hear the same story – you’ll never have a steady stream of work, so you need to get used to either having too much or too little to do. If you know this is going to happen, you can make provision for it. This is especially important when it comes to your finances as you’ll still have to pay your bills, even if you’ve been twiddling your thumbs for the past month.
2 – New business
The feast or famine way of working will also have an impact on your ability to get new business. When you’re working long into the evenings in a time of feast, you simply won’t have the time or energy to go out and pitch for the new business you’ll need when you’re back in famine, which is frustrating. By regularly attending business networking meetings – make the time even when you’re busy – you will become well known to other business people. Once they know, like and trust you, they’ll consequently be more likely to come to you when they’re in need of your services. This takes the pitching element out of the search for new business, and is more likely to ensure a slightly steadier stream of work. It also means that, if someone knows you well enough, they’ll be happy to wait until you’re not overwhelmed, rather than you feeling obliged to work through the night so you don’t lose the work to another company.
If you rent a desk in a co-working space, you will be surrounded by other business people with whom networking will become a natural, everyday process. This leads on to a lot of cross-fertilisation between co-workers: in the second half of 2016, 71% of members collaborated with others on an average of four business tasks.
3 – Bookkeeping
It doesn’t matter how good or bad you are at finances, as a freelancer, you’ll have to be in charge of everything! You must keep on top of your invoicing and make sure clients pay you on time, otherwise you won’t be able to pay yourself!
4 – Income tax and NI
One vital, though unwelcome, part of freelancing and self-employment is filling in your tax return… and then paying what you owe! If you don’t have the discipline to put aside enough money to cover the bill, think about going through an umbrella company as, for a fee, they will invoice your client, then pay you through PAYE after the deduction of allowable expenses. This means your tax is paid upfront so you can rest easy knowing you will not be presented with a large tax bill to pay on 31st January every year.
5 – Pension
As you will no longer be in an employer’s pension plan, you will need to contribute to your own pension fund.
6 – Holiday and sick pay
Employees can take their holiday allowance and sick pay for granted, but if you decide to go it alone, you’ll be responsible for covering your business and personal costs in the periods where you are unable to work.
7 – Distractions
The majority of freelancers find it difficult to work at home because they have too many distractions, whether it’s a constant reminder of housework, the temptations of catching up with friends on Facebook, or family and friends popping in for coffee because they know you’re around and have no boss to answer to. Many find that, having broken free from being in an office atmosphere, they actually miss the discipline it gives them, and therefore have problems motivating themselves to get down to work.
That’s why co-working office spaces are so popular. Being surrounded by other business people, and having none of the distractions which are so disruptive when you’re working at home, helps focus the mind wonderfully, and the majority of freelancers hot desking from co-working spaces report a substantial increase in productivity as a result.
If you are a freelancer looking for desk space to rent or office space to rent in Hertford, the UOE Hub above Hertford Post Office has everything you need – free high speed WiFi, FREE tea and coffee, meeting rooms for hire, discounts on office stationery – at a price you can afford.
Contact us now to request your FREE one-day trial!