Becoming a freelance consultant is a dream for many. I've been lucky enough to have a successful freelance career as a social media and digital PR consultant for the last few years. There's been some bumps along the way, but advice and encouragement from a wide range of people enabled me to go it alone and have a good time while doing it.
Going freelance will probably be the most liberating experience of your career. You now don't have to do the 9-5 or the rat race and can theoretically work where and when you want. But don't be fooled into thinking that it's all networking lunches and working in cafes. Theres a lot to do that you normally take for granted when working for a company. You are the be all and end all of your business, so your success depends on nothing else but your hard work.
These pieces of advice are coming from the perspective of my experience as a freelance social media and digital PR consultant. There's a lot of work out for guys like us in London at the moment and there's certain ways of doing things in the UK for freelancers. As such, I can't vouch for other lines of work or other geographies - but feel free to take or leave these ideas as you like.
Please bear in mind that I am providing these observations from my own personal experiences and I am not providing legal or tax advice. You need to pay somebody for that: I'm not qualified, so go hire someone good.
Lastly, freelancing is one of the most rewarding, enjoyable experiences you can have in your work. You're thinking about freelancing because you're good enough and you want the lifestyle it brings. Go for it! You can always get a boring 9-5 job if things don't work out...
And if you have any other questions or are a freelancer who wants to give some advice, leave them in the comments and I'll get back to you asap.
Save up and start networking at least 6 months before
While it helps to try and have some work lined up before you go freelance, this isn't always possible. Getting yourself a buffer in case work doesn't pick up as easily as you'd hoped is a sensible plan. There are more and more of freelancers out there at the moment; just launching yourself into the marketplace without being pretty sure you can rustle up a bit of work is madness. So, save a bit before you go freelance, network a bit as well, and you'll be in a much better position.
Make your previous employer your first client as a freelance
You don't need to break away from your employer as soon as you decide to go freelance. Most bosses are understanding of their employees wishing to move on and they appreciate you asking them to make a more prolonged exit. They will appreciate you sticking around for a bit longer, giving them more time to hire the right person to replace you, more time for account handovers and ensuring that clients get the smoothest transition possible. You get the advantage of having guaranteed work for several days a week while you get the rest of your client portfolio worked up, plus you get help in setting your day rate to an appropriate level.
How to calculate your freelance rate of pay
If your previous employer has set your rate, that usually works as a good starting point. If not, then there is a rough way to work out your day rate, although it is different for every freelancer depending where they are in their career, their skills, demand for their expertise, state of the job market, demand for freelancers, etc. The simplest way to work our your day rate is to add a third to the salary you were receiving before. This is to account for the fact that you are doing your own HR, Finance, Sales, Marketing, IT, Offices Costs and anything else that normally is taken care of for you in a company. In England and Wales there are 252 working days in the year, assuming that you work 5 out of 7 days.
Once you have this worked out on an annual basis, take off 20 working days from the total. This equates to a month of work (including weekends) and accounts for time off for holidays, sick days, and a few days where you might not have work on. Obviously, adjust this amount if you think you might not get that much work in or want to take a few more holidays that year, or if you're very confident or feel that you are worth more (one of the main reasons that people go freelance in the first place!).
So, if you earned £30k in your job, adding a third on equals £40k. Dividing £40k by 222 days equals just over £180. This would be your day rate. Oh, and make sure you always add on VAT to this (20% in the UK), so £180 per day excluding VAT, £216 including VAT. Your client will be prepared for this.
Network, network, network
Most of your initial work will come from referrals and people that know you, so ensure that everyone you are connected to knows you are available as a freelancer. Join a network that runs regular freelance events or check the likes of Eventbrite and Meetup for relevant events happening near you. This doesn't always have to be face-to-face - LinkedIn, Twitter and simply emailing all of your contacts to let them know you are available for freelance work are all valuable activities to undertake.
You will take on too much work at first
Going freelance can feel like jumping off a fiscal cliff with no definite financial income to support you. So, the inevitable reaction is to take on as much work as you can, just in case one or two of those projects don't come through or eventually dries up. You will feel overwhelmed and beyond stressed. This is ok. It's a great way to realise your working capacity and the amount of work you feel comfortable working at - despite the financial incentives.
Strive for a work-life balance
Having accepted you will take on too much work on first, there will be times when you feel a little light on work. You should have a financial buffer to not worry to much when this happens and this also gives an excellent opportunity for you to assess what is important in life. Go out, see friends, take an afternoon walk in the park. You'll feel better for it and work more efficiently too.
Get a decent accountant
One of the reasons that you get paid less at a full time job compared to a freelance job is that there is a nice, friendly team in the office taking care of all of your financial needs - from salary to national insurance to tax. You didn't need to worry about a thing. But now, being freelance, you need to do all of that yourself. And an excellent accountant is an essential aspect of your new freelance life and worth every penny you spend on them (and they'll save you a few pennies too...). I love using Crunch, the online accountants who have a simple to use online system to log all your day-to-day invoices and expenditure, as well as dedicated telephone and email support for all those niggling queries you have. I've also worked with Proactive Net, savvy accountants based in the UK in case you need more human contact for your financial goings on.
Buy a good laptop and a high-end mobile phone
When I first went freelance, I bought myself a Macbook Air. Powerful, extremely light, and it works perfectly every time I use it. Think of all the times you've used a cheap or old PC that has loads of bugs on it. You can often spend as much time closing windows or troubleshooting errors as actually doing work. They are expensive, but Macs just work. You won't waste time fixing problems or waiting for anything to load, and as time is you're most important asset as a freelancer, Macs are your best friend.
The same goes for a phone. There are countless apps for iPhone, Android and Windows Phone that will help you run your business on the run, so you can ensure that you can keep working while travelling to client meetings or away from your desk for whatever reason. Plus, you can be active on email and social networks while on the move, allowing you to be in touch with clients or marketing yourself wherever you are.
Invoice promptly and properly
Your clients will gave different billing cycles - 14 days, 30 days, 60 days - and have much more important things to do than ensuring you are paid on time. Invoice as soon as you can (normally the end of the month) and ensure your client has the required information and enough detail to ensure that their finance team can process the invoice without any trouble. Don't forget - it is your responsibility to be paid promptly and properly, so ensure to do everything you can to get paid on time.
Phone calls solve a lot
More often than not, a phone call will be quicker, simpler and clearer than an email bout. If things are getting complicated pick up the phone and call your client. Something I learned from the Global Head of Comms at a major media outfit: If it takes more than 3 emails to resolve, pick up the phone and solve it in 3 minutes. The same goes the other way too: if your client is calling you, make sure you answer it as soon as you can. If not straight away, call back at the nearest possible time. You don't want your client waiting for you or constantly not getting their calls answered. Call them back, asap.
If you're busy, refer work to other freelancers
There'll be times in your freelance career where you will have too much work on and won't be able to take on a project, or you'll be approached with a project that isn't right for you. Do yourself a favour and give the lead to another freelance contact. You'll be given the kudos by the client for recommending someone else to do the work, and the freelancer for giving them more paid work. Plus you'll be freed up to concentrate on the work you know and love. No one loses, don't be greedy
Some further tips from freelance friends on Facebook and Twitter:
Kate Bevan - "Try and have some work lined up *before* you go freelance. There are more and more of us out there; just launching yourself into the marketplace without being pretty sure you can rustle up a bit of work is madness."
Becky McMichael - "Line stuff up. Price yourself competitively but not too low. Get a long term gig for part of the time. get a good accountant. Register with agencies as a back up (xchange team etc). Think about how you'll cope without access to data and measurement tools. Work somewhere that inspires you (shared workspaces etc). Network your ass off. Get out to events and keep learning, it's easy to end up in a vacuum. Forget holidays, you'll take less than you ever did as they seem to cost so much more. Put your tax away. Don't fork out in loads of kit straight away, keep your costs down."
Jack Wilson - "Don't work in your pants and keep watch of your sleep pattern."
Daniel Thornton - "Either get a good project management tool (Whether you use Basecamp, Trello, Liquid Planner etc), or find someone who will kick your ass on a regular basis. Definitely put the tax away asap, and get a good accountant. If you're shy about demanding money, make sure you use a good invoicing tool - e.g. Freshbooks, Kashflow etc, and set up recurring invoices to cover being forgetful. It's possible to do some very effective networking online. Just look for small, specialist groups for the work you do, rather than assuming all your work will come via public accounts on Twitter, LinkedIn etc. Oh, and be prepared for the fact you might never want to work for someone else again..."
Ben Serbutt - "While it may be the hardest thing to do, learning to say "no" to work is really important! Otherwise it can be very difficult to maintain a sensible work/life balance."
Ignaty Dyakov - "They need to think that freelance stands for greater freedom, flexibility and fun. These should outbalance the challenges they might encounter. I would almost say they should think in terms of "living freelance", rather than "working freelance", then it will make much more sense."
So, freelance, that's all there is to it!
Just kidding - there'll be plenty I haven't covered here, but hopefully that's enough advice to get you going on your journey and give you the confidence to make that initial leap.
And don't forget - if you have any other questions or are a freelancer who wants to give some advice, leave them in the comments and I'll get back to you asap.