So many of my employed friends daydream about freelancing, especially as a creative professional. From the outside it must seems like the ideal life, to work in a field that you love, in your own time and your own space. Working from home or a café, on interesting creative projects, and taking the afternoon off to head to the beach or hang with the kids – idyllic, right? The truth is a little less glossy, sadly. Freelancing can also mean an unreliable income, working on weekends, impossible deadlines, tricky clients, and an end to annual leave.
Freelancing is not the right choice for everyone, and it requires some specific and sometimes contradictory personal characteristics. You need to be independent and adventurous, but also self-disciplined and careful; extroverted enough for networking events and marketing, but also happy in your own company as you would be working alone. A healthy dose of creativity and intelligence is a must, and you won’t survive without a great sense of humour. Sound like you? Then you’re ready to prepare.
The important thing about choosing to freelance is understanding that you’re creating a small business. Yes, it’s just you, but treating your freelance work as a business means taking it seriously, devoting time to planning, and learning how to do it properly. A respectful attitude to your choice can make the difference between barely surviving and profiting from a self-sustaining career.
In Australia, you will need an ABN to start your freelancing business. This can be easily registered on the Government’s website for free.
You can register the ABN under your own name or choose a business name, which also needs to be registered for a small fee.
We also recommend setting up a separate bank account for business expenses and income. This will save a huge amount of hassle in the future with your record keeping and tax obligations. Mixing personal money with business income can be very dangerous if you don’t yet know how to manage your money. There are many fee-free business bank accounts available online.
Also investigate using a cloud accounting system to help you better manage invoicing and financial management. There are inexpensive options like Rounded and Square, as well as other pricier examples.
Finally, you’ll need some marketing basics. A simple website, a business card, and a social media presence such as LinkedIn or Facebook are enough to start with. Potential clients and partners will think you more trustworthy if there is a digital way of finding out more about you.
The insecurity of an irregular income is the freelancer’s biggest worry, especially if you’re giving up the comfort of a pay day and sick leave. However, the world of employment offers less security than it once did, and the ‘gig economy’ implies that the majority of workers will be freelance in the future.
There’s certainly a lack of fixed employment in freelancing, but that’s part of the adventure, because a world of opportunities or disappointments could always be just around the corner. If you feel nervous but excited about not knowing where you’ll be in twelve months, then freelancing could be ideal for you. If that notion triggers a paralysing dread, stick with employment. A tolerance for unpredictably is essential to the freelance life.
Three financial safety nets can help in the decision to leap:
- Try moonlighting as a freelancer and see if you can build up some work and contacts. This will mean long evenings, working weekends, and some serious juggling. If you have work lined up and positive client feedback after a few months, you’ll feel better about making the definitive step.
- If you have time to prepare, saving up a ‘nest egg’ helps. Work out how much money you’ll need to survive for a month, save that, and use it if that rainy day comes. Chances are you won’t need it, but you’ll feel braver knowing the safety net is there before you jump.
- Acquire at least one regular client as soon as you can. Even if they only pay a small amount, a regular client (and the reliable income they bring) helps keep the wolf from the door.
When to Leave
Impulsively launching a freelance career is an exciting idea, and certainly some people have successfully navigated that leap with no safety net, no plan and no idea. However, it’s wise to ask yourself some important questions first. Do you have what it takes, personally and professionally? Will freelancing meet your career and lifestyle needs, and what will you do if it doesn’t? Do you have a network of support to rely on in times of crisis?
The good news is that freelancing will wait for you if you’re not ready. You can leap whenever you’re ready and go back to employment if it doesn’t work out. Freelancing can actually be a bonus on a resume when applying for work, because it demonstrates that you’re a motivated self-starter with business acumen.
As your final decision tool, figure out what you have to lose. If freelancing doesn’t work, how would you suffer? When the idea of failing completely as a freelancer is more appealing than staying where you are, then it’s time to give freelancing a go. The consequences could be far better than you imagine.
Article by Monica Davidson, Director and Doyenne of Creative Plus Business.
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