Knowing when to start freelancing is a personal decision. While some of us can ‘just go for it,’ others need a better laid out plan for what to expect. Consider this...
Very few people think of freelancing as running a small business. It takes time to achieve success in business, and the same goes for freelancing. To turn a freelance practice into a freelance business, you’ll need time and complete commitment. So before you can begin answering that daunting ‘when to start freelancing?’ question to yourself, there are certain things to consider.
In order to go freelance full-time, there is a certain amount of groundwork required. Your financial situation may have a big impact on when you’re able to quit your job and go solo, but money is not the only factor. It’s very important to do all your admin: setting up your company, getting your papers in order, making sure you’re insured. Preparation is key—don’t risk giving yourself a big headache later down your freelance journey.
Here’s a quick checklist to help you prepare for a successful start.
1. Financial stability:
going from a full-time job to a full-time freelance business can be chaotic and even daunting at times—especially when it comes to money. Without a solid client list and a network of contacts, you might find yourself with long gaps between projects and less money at the end of the month than you’re used to. If there is one tip all seasoned freelancers share is to set aside a budget for the start of your journey. Financial stability at the start of your venture is vital for you to be able to focus entirely on learning the ropes of freelancing. Think of it as an investment in your business.
2. Amount and quality of clients:
use your personal network to start promoting your freelance services before you quit the day job. This is the kind of low-effort task that can generate huge benefits for you. Instead of spending weeks nurturing prospects and generating leads as a freelancer, start taking on side hustles and connecting with potential clients while keeping your full-time job. There will never be the perfect time to quit but planning ahead is something that can make you feel more comfortable making the decision.
3. Level of your skillset:
is there any training course or qualification that could significantly improve your chances of getting more freelance work? Do you have any skills gaps that could become a problem two months down the line? Don’t put this off until later—use your spare time to read, learn and practice, so that you can start your freelance business on a strong foot.
4. Company set up:
think about the legal structure of your business. Do you want to be a sole trader or register a company? Are you planning to work on your own or, if things go well, hire people? It’s something to research and figure out before you hand in your resignation—why waste valuable time on admin work?
5. Accounting software:
keeping track of your finances, monitoring your invoices and logging expenses is something you will need to do regardless of the legal structure of your business. And an accounting software will make that experience more bearable. Plus, keeping your records neatly tucked away in the cloud and accessible from anywhere, at any time, will make your (and your accountant’s) life so much easier.
do yourself a favor and open a separate savings account before you even go into freelancing. This way, whenever you get paid for a project, you can transfer a set percentage of that amount to your business savings and keep it safe until it’s time to pay the tax man.
as with any kind of business, freelance insurance comes highly recommended. Whether you need to chase non-paying clients or get caught up in liability claims, a good insurance cover could take the headache away.
8. Necessary tools:
will you have the necessary equipment and software needed to do your job well? Take into account the fact that working for yourself means paying for everything—no more expensing it to the company!
So when should you start freelancing? You can start freelancing while studying or working full-time. You can start freelancing when you’re travelling or find yourself between jobs. And you can start freelancing whenever you feel ready to quit your job and put all the effort into growing your business. Just keep in mind that starting a freelance business requires preparation, so don’t go into it blindly.
Your money at N26
Going freelance is exciting, and now banking can be too. N26 are here to help with their free bank account for freelancers and the self-employed, which makes things easy, letting you earn 0.1% cashback on all purchases you make, and enjoy free card payments worldwide. It only takes a few minutes to set up, too.