15 Mar Dealing with the freelance lifestyle
As an independent web worker it’s critically important to get a proper handle on everything you need to deal with from day-to-day to keep you business running. Thankfully, Collis Ta’eed over at NorthxEast has done the work for you. His post, A comprehensive guide to starting your freelance career, has everything a young (or even an experienced) freelancer needs to know.
Rather than reiterate Collis’ words, I’ll add my own few bits and pieces based on my recent decision to become independent, plus some thoughts in general. Some of these are Australian-specific, others are generally applicable:
- never, ever badmouth a colleague, the competition or someone else in the industry. It will come back to bite you;
- it will probably take you two years to be decently profitable. Dead set. Are you prepared to wait that long. If not, don’t freelance;
- talk it over at length with your spouse/SO and family beforehand and involve them in the decision. They will have opinions and feelings you’ll want to know about. Alli and I had some near-fights over my decision, as I didn’t give her enough information for her peace of mind (I had it, I just couldn’t articulate it);
- find the best accountant and financial adviser you can. Ask your colleagues for referrals and you’ll find someone worthwhile;
- form a company, depending on your income. AU$100K is about the mark for this to be necessary;
- register for an ABN. If you plan to do business in Australia, you don’t have a choice;
- get appropriate insurance. As a web worker, the need for this is fairly low, but better to be safe than sorry. Check with your accountant/financial adviser;
- buy the best kit you can afford as early as you can afford it. Notebook PC, big LCD monitor, networking gear, whatever. Buy it and turn it into an asset – tax benefits!
- the 1:1 relationship between billable and business development hours is probably on the generous side. Sometimes, it can be as high as 1:3 – that is, one billable hour for every three on development and finding work. Ouch!
- clients will pay at the last possible moment. Make sure your invoice terms are very clear and that you can carry the financial load while you wait. I invoice 7 days net, unless the job I’m doing is contracting through an agency, in which case pay is dealt with differently depending on who you are dealing with;
- buy a copy of MYOB and learn how to use it. You will have greater peace of mind, and your accountant will love you for it, and;
- lastly, remember that everything comes out of your pocket now. This is both good and bad. You no longer have to ask anyone whether you can go to a conference, or buy a piece of kit, but you do need to make sure you can afford it.
I know it sounds like I’m harping on financial issues here, but frankly, business is about the bottom line. No matter how good you are at your job, you’re doomed if you can’t sort the money side of the business out.