Best Option

Find the right accountancy solution for your requirements

Things freelancers worry about

It doesn’t matter what industry you freelance in, whether you’re a hairdresser or graphic designer, freelancers share the same worries and have the same fears which creep into their minds at 4am and refuse to let-go until any hope of sleep is lost.

Let’s work though the ten biggest, and most common, freelancer worries.  And hopefully offer some solutions too!

  1. Is a break really necessary?

When all your working hours are classed as “billable time”, it is easy to see a lunch-break or an hour at the gym as a luxury you just can’t afford.  The working time regulations state: “Workers have the right to one uninterrupted 20-minute rest-break during their working day if they work more than 6 hours a day”; this is the EU recommendation for a reason.  Working without a break isn’t good for your health, and the more tired you get the less productive you are.  If time is precious, take a 20-minute break and eat your lunch whilst you get some fresh air, or work until mid-afternoon and combat the inevitable 3 pm slump by having an hour in the gym, then tag this missed working time to the end of your day.  You might be working until 7 pm rather than 6 pm, but we’ll bet your more productive in that last hour than you’d be if you hadn’t had that break at 3 pm.

2. Can I afford to turn down work?

When you’re new to freelancing, it is tempting to take every offer in of work, fuelled by the fear that clients won’t return to you in the future if you turn their work down initially.  What’s that saying, feel the fear and do it anyway??

Consider the flip-side; as a business would you trust the services of someone who was always available at the drop of the hat, or instead was honest about their availability and when they can deliver the work?  By accepting work, but being clear from the off-set about when you can deliver the work, you present the image that you are a busy and in-demand freelancer who only takes on work when they can deliver quality and not let their clients down at the eleventh hour with a missed deadline.

Understanding your profitability can be the key to assessing whether you can afford to turn down work, and to highlight the workstreams which offer the most profitability.  By using a business bank account you can keep your business and personal expenditure separate, helping you to log your earnings and really understand what you can afford to let go and what you need to be saying yes to every time.  For our guide to choosing the right business bank account see here.

3. How do I justify a holiday?

When your earnings are reliant upon you delivering each day, a holiday can feel like a costly luxury.  However, the time away from your desk can provide clarity of mind and the time to plan out the future of your business which is hard to get to when you’re working all day, every day.  Maybe whether your role lends itself to working whilst on holiday; take your laptop with you, structure your day so that your working time is limited to just a couple of hours in the morning when you’re likely to be super-productive and take the opportunity to recharge and return to your desk refreshed and ready to jump back into the freelance life

4. How do I remain compliant?

Understanding when your deadlines are for tax purposes is pretty simple; the website is a trove of information relating to self-employment and it’s a great base point to start from.  Quite often the time required to research and digest this information is the biggest barrier to learning for the freelancer; its non-fee-earning, why would you prioritise it?  If time is your biggest challenge, consider engaging with a trusted accountant to ensure you remain compliant whilst leaving you free to focus on building your business and delivering the work that pays the bills.  Having an effective accountant can reduce the time you spend focussing on understanding compliance and will ensure that any changes to deadlines or requirements are provided to you immediately, rather than relying upon you to stay up-to-date with changes to practice and returns.

5. How can I make my business scalable?

This very much depends on the nature of the freelance business itself, but where freelancing turns into a viable business proposition is with the accumulation of growth over a sustained period.  Scaling your business might mean growing your model to get to the point where you can employ someone else to deliver in addition to yourself, or take you away from delivery and instead to focus on new business.  The key to this is allowing time for yourself to plan for the growth of the business, but often freelancers consider themselves too “time poor” to commit to this.

Booking time to just “think” can feel like a frivolous luxury, but without allowing any time to consider business development your business will likely stagnate.  Some of the most successful figures in the business book “thinking time” into their weekly diaries; if growth is your aim, consider why this is the case and the impact it has for them.

6. What happens if I get sick?

There are no two ways about it, freelance work is risky; it all relies upon you so if you’re missing from the business then the work won’t be delivered.  Ask yourself what is your real fear about sickness; is it letting your customers down, or not earning anything during a period of sickness?  Consider freelancer insurances, a helping hand to provide some financial cushion if you were to suffer from prolonged and serious ill-health; this might be to pay your bills or to pay another freelancer to cover your obligations in a white-label approach.  Also, consider putting away some of your monthly earnings to tap into as your own version of insurance; there for a rainy day (should illness take you away from work for a short period of time).

7. How do I generate new business?

It can be easy to fall into a trap of working on projects and not allowing yourself time to plan out the future.  But for your business to survive month-on-month you’ve got to book out time to generating new leads and pitching for work with prospective customers.  Sound difficult to build into your working day when you’re already working at 100mph?  Consider spending time on LinkedIn at some point during the week, putting yourself forward for work in that way, or shouting about your recent successes on there and building a network of people who then know where your strengths lie when they have some work to send your way.

When working to deadlines, don’t block out the full week to just delivering.  The future success of your business is reliant upon a new and evolving client base, and it’s up to you to suss out how and when you’ll put yourself forward for new opportunities to earn.

8. How do I know what my profits are?

Understanding your tax liabilities and expenses are the key to having a grip on your profitability.  By not knowing what bills you have to pay, you will never have a clear picture of your profitability and the viability of your business as a whole.  This can be a dangerous game and short-sighted if time is your barrier to understanding your books.

There are a number of online tools, such as our free bookkeeping template and expenses guide, which will help you understand your liabilities from the offset.  We’d also recommend you have a trusted accountant, who will provide regular breakdowns of your financial status and advise on when it’s appropriate to declare dividends.   For information on choosing a trusted accountant, and the benefits of the key accountancy brands in the UK see here.

9. How do I combat loneliness?

Life as a freelancer can be isolating; without colleagues to run ideas by, it can be easy to fall into the trap of not speaking to anyone other than your clients each day.  Look into local “Freelancing Clubs”, co-working spaces and even just working from a coffee shop for an hour or so each week.  You’d be surprised at how motivational it can be speaking to other freelancers who are making a success of the freelance life, and how much more you get from speaking to people to whom you aren’t providing a service.

10. How do I manage my finances?

Managing finances is far from simple, and when your priority is getting money into your bank account in the first place it can be easy to prioritise your time towards new business rather than accounting.  This is where freelancers benefit from engaging with a trusted accountant and passing on the responsibility for logging income and expenditure to someone else.  There is a range of accountancy packages available on the market, which offer daily support for a monthly fee.  For more information on choosing the right accountancy support, see here. 

Posted in: Freelancer Blog