What is a freelancer and how start a freelance business?
Becoming a freelancer is a great way to start running your own business, but there’s lots to think about before you make that commitment. From how to become your own boss to what you need to consider before you start, find out what you need to know.
What is a freelancer?
A freelancer is someone who works for themselves, either as a full time job or part time. The important thing is that you become your own boss, and with that comes certain responsibilities. For example, you will be in charge of finding work, paying your own taxes and other costs.
Depending on what you do, you could either work on job-by-job basis, on long or short term contracts or selling products/services by heading your own company. This could be working remotely, in-house at a company or in a specific location where your clients are based.
How do I start working freelance?
The first thing you need to consider if you want to start working freelance is to register as a sole trader with HMRC. To do this, you will need to choose the name you want to trade under, following certain rules such as using a unique name which is not offensive.
Before registering you will also need to choose which accounting method you are using, which will affect your tax return. You can either choose traditional (accrual) accounting or cash basis.
- Traditional accounting is when you record invoices and expenses the date you receive or make them.
- However, if you make under £150,000 you can use cash basis accounting, where you only record income or expenses the date you are paid or make a payment.
Once you have made this decision, you can register for Self Assessment Tax and check whether you need to register for VAT. You will need a National Insurance Number to do this.
To start working freelance you’ll need to find jobs or clients. There are lots of ways to do this, like looking on jobs websites or LinkedIn, networking, word of mouth recommendations, or doing your own marketing so potential clients or customers can find you.
What do I need to consider?
Before going freelance you should make sure you understand the responsibilities you will have which are different from working as an employee. You must file your Self Assessment Tax Return, which you can find out more about in this article. You should also contribute to your pension yourself, and pay your own National Insurance. These costs should be taken into account when you are pricing jobs.
Work-life balance as a freelancer
Maintaining work-life balance as a freelancer is really important, as it is likely you’ll be setting your own work hours and deciding how much you work. Creating your own routine as much as possible can help give balance. It’s up to you whether you stick to 9-5 or choose a schedule that is better suited to when you feel most productive.
Making sure you set time aside to switch off from work can be challenging when you’re passionate about your business. But, having the balance to relax will help you be more effective in what you do. If you are working remotely or from home, creating a dedicated space like a home office is another way to keep a distinction between work and home life.
Make getting paid easier
As you will now be in control of your income, getting paid on time is crucial. We’ve put together some tips on how to avoid late payments here.
Sending professional, trackable invoices makes life as a freelancer easier, leaving you time to focus on finding new business and doing what you love. With Bokio, you can use our invoice generator to create unlimited invoices, send them to your clients, track and record them with your other accounting all in the same place. Even better, Bokio is totally free.
It’s not just an invoice software, but also lets you do your accounting with a simple step-by-step process, and has automated reports so you can keep track of your finances. Saving time and money is important as a freelancer, and Bokio can help.
Want to give Bokio a try?