Friday, 28 June 2013

5 Golden Rules: thinking of freelancing?

Moving from the safety of employment into the big world of freelancing can be both daunting and exciting at the same time. There are many things to learn about running your own business and perhaps some new skills to acquire along the way. Here are my Golden Rules to consider before you take the leap:

1. Branding: 
Give serious consideration to the name for your business. This is so important and something that should not be rushed. Can the services you’ll be providing form part of the business name? Is it just yourself as a freelancer or will you be working with other colleagues/associates? Do you have an exit plan? If so choose a name that isn’t tied to you or your location making it more appealing to an interested buyer. Get a professional to design your logo. Someone once told me that “image is everything” which I have found to be true. If you intend to offer professional services your branding should look professional enough to convince people to buy from you. Once it is out there it is so much harder and more costly to change.

2. Legal: 
There are key differences between being self-employed and forming a company. Make sure you understand the differences and liabilities. Choose a legal structure and register with an appropriate body. Remember to notify the tax authority of your change in employment. Next look at putting insurance in place. No one ever thinks they would have a problem with a client when they first start out, but it is much better to be safer than sorry. Most likely professional indemnity will be needed but you may also need to consider Directors Liability and Employers Liability insurance (depending on your legal status). A well written contract with clear terms and conditions would be a wise investment.

3. Finance: 
There are many ways you can approach pricing. Whether you price per project or by the hour do some research so your pricing is right. It is much better to price high and come down than starting low and then increasing prices. Get help if needed to draw up a budget, consider your start-up costs, marketing and on-going overheads. Speak to an accountant to get advice on allowance expenses and the way to structure your business in the most tax efficient way. If accounting isn’t your strength consider engaging a bookkeeper who can record the day-to-day activities of your business and keep your books in good order ready for an accountant to do any tax computations and statutory accounts.

4. Marketing: 
Every business should have a plan which should include a marketing element. If you’re starting up a service based business your plan doesn’t need to be extremely detailed but writing a plan will help crystallise what services you intend to offer. Focus on what the benefits are to your customers and who they are to help them identify with what you are offering. Think about whether you start with a full range of services or roll them out over time. How will your target market discover your services? Consider presenting at events, writing articles for well-known publications in your industry, look for places where you can network with customers and perhaps consider advertising or exhibiting. Social media is now being used more widely so you should include this in your marketing mix making sure that all your communications are consistent with your brand.

5. Balance: 
Starting a business can be hard work and ups and downs come with the territory. I am a great believer in what goes around, comes around so treat people as you would like to be treated by others. If you have family, be mindful of the impact on them. You quite possibly will work lots of hours building a business in the early days and this can take its toll on friends and family alike so make time for family holidays. It is important for them but it is also important to take time out and switch off. It will give you time to think and when the holiday is over you’ll return with fresh ideas and energy.

Most of all, enjoy and have fun. Life is just too short.

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