There are a whole host of different jobs freelancers can do, from things like accounting or digital marketing to the more unusual roles of expert bed-tester or a professional bridesmaid. Read More
A common problem for those who take the leap from employment into being their own boss is wondering how to describe themselves. Am I suddenly a CEO of something? The MD? A freelancer? Something else?
They all exist in the same professional realm, so the terms do overlap but there are nuances between them which are important to note for legal and financial reasons.
Some of the terms we use to describe self-employment actually describe the legal structure of your business, and these have an impact on how you register your business as well as for tax compliance.
It can be quite confusing, so we explain what it means to be self-employed, freelance, or a sole trader, and give guidance on the various tax implications to help steer you in your desired direction.
What does it mean to be self-employed?
As the name implies, being self-employed is where you work for yourself rather than as an employee of someone else. Self-employment means you own your own business and are responsible for your own income.
Self-employed business owners may also employ staff and be responsible for paying their wages (and relevant employee contributions like National Insurance and pension) too.
This can apply to businesses of all shapes and sizes (sectors and scales). Whether you own a boutique marketing agency or you’re a solo plumber, if you own the business and generate income from it, you’re self-employed.
Responsibilities
As a self-employed worker you’re in control of things like the scope of work, setting your pricing and rates, and which clients you want to work with. This level of autonomy is one of the most appealing things about being self-employed versus working for somebody else who calls those kinds of shots.
That said, with freedom comes great responsibility and being self-employed also means the onus is on you to deal with things like invoicing, chasing payments, financial accounts, and taxes. (Unless, of course, you get an accountant to help you out, which we’d always recommend doing if you can afford it!)
Self-employed vs. Freelancer vs. Sole trader
It’s important to note, before we go any further, that sole traders and freelancers are self-employed.
Freelancer and sole trader status are not separate or different from self-employment. The crucial difference is that the term ‘sole trader’ describes a legal structure that you can register the business as. Another type of legal structure is a limited company.
So, someone who is self-employed might be a sole trader or they might have a limited company. In summary:
- Sole trader: A type of legal structure that you use to register the business
- Self-employed: You work for yourself, and you can do this as a sole trader, a limited company, or in a partnership
- Freelancer: Someone who is self-employed (and that can be under any business structure you like). The thing that’s different about freelancers is the way they work.
Who qualifies as a freelancer?
A freelancer is somebody who works for themselves, so in that respect you’re self-employed. Freelancers tend to work remotely, and usually work by themselves although they might also collaborate with others as part of a larger project. Freelancing tends to involve:
- Working for multiple clients or on a variety of projects at once
- Being hired on a retainer basis or for adhoc work and projects, rather than on a set contract length
- Controlling the scope of work and rate of pay, including the payment basis (such as with a day rate or project cost, and how often payments are made, such as with milestone payments or on completion)
- Invoicing clients for payment
- Reporting profits and expenses, and paying Income Tax and National Insurance (NI) contributions
Somebody who is a freelancer might operate as a sole trader or as a limited company. They might also work for an employer at the same time as running their own freelance side hustle.
What is a sole trader?
A sole trader is a self-employed person who works for themselves and owns their own business—and is therefore responsible for earning their own income and reporting it for tax purposes.
The main difference between a sole trader and a limited company is that sole traders have unlimited liability. This means that the business owner’s personal finances aren’t considered to be separate from those of the business itself.
Limited companies, on the other hand, keep the business owner’s personal finances and assets separate. This means they will be protected if the company finds itself facing debt or any other financial problems.
Can you be employed and self-employed at the same time?
Yes, you can be employed and self-employed at the same time. Some people choose to run a business outside of their employment to supplement their salary or invest in another skill or passion.
This is what is often referred to as a ‘side hustle’. According to recent research published by finder.com, 43% of Brits have a side hustle as an additional source of income in 2024.
This self-employment side hustle falls under the umbrella of self-employment but could be under the remit of freelancing, sole trader or owner of a limited company, etc.
How do self-employed people pay tax?
How self-employed people report and pay tax depends on how their business is set up, which is why the point about business structure is important. For instance, being a freelancer doesn’t actually tell you what type of tax you need to pay. The way you set up your freelance business does.
- Sole traders submit Self Assessment tax returns and pay Income Tax on all of the profits they make
- In a limited company the business owner submits a Company Tax Return to report the company’s profits and pay Corporation Tax on them. They’ll also need to report their own individual income that they take from the business.
Head over to our freelancer information hub for more guides, tips, and advice.
Working from home is great. Coffee just the way you like it and without the queue. Whatever playlist you want on Spotify. Staying in your slippers all day. Nobody steals your breakfast from the fridge. Saving money and hassle on the daily work commute.
Working from home and avoiding the commute gives you some precious time back too. This can be used to spend time with your loved ones, do some exercise, indulge in a hobby, or simply get some more sleep.
Government data found that 78% of those who work from home in some capacity agreed that being able to ‘WFH’ gave them an improved work-life balance.
Statista also revealed flexible scheduling (50%), cost saving (43%) and the availability to care for relatives and pets (34%) as the most named benefits of home working.
The benefits of getting out and about
Although there are many brilliant advantages of working from home, it is good (and advisable) to get out of the house and work in a fresh environment from time to time. This could mean a co-working space or other places you can work remotely for free.
The benefits of co-working for freelancers include:
- Human contact to combat loneliness
- Better productivity, focus and concentration
- Fewer distractions (like the washing machine and Netflix)
- Networking opportunities
- Less sedentary daily activity
Next, we share some of the best co-working spaces in London so that next time you’re working in the Big Smoke, you know precisely where to park yourself.
Top London co-working spaces
The very first co-working space opened way back in 2005. Since then, the number has rocketed into the thousands, with Statista predicting there to be around 41,000 global coworking spaces as of this year.
In London, there are thought to be around 1,400 coworking spaces currently. Naturally, we can’t spotlight them all in this article – we know you need to get back to work.
So, here are seven of the best, coolest and most popular co-working spaces in London right now. Add these to your rotation when it’s time for a change of scenery.
Don’t forget to check out our top etiquette tips when working from a co-working space.
Work.Life – Camden
13 Hawley Crescent, Camden NW1 8NP
Price guide: £6 per hour or £350 per month
As a creative freelancer in London, there’s no cooler place to be than Camden. As well as the expected desks, meeting rooms and breakout spaces, there’s also a close-knit community vibe here that members love. Free events and regular socials provide the perfect networking opportunities.
All types of membership fees cover access to shower facilities, private phone booths, printing facilities, and complimentary coffee.
Huckletree – Shoreditch
Alphabeta Building, 18 Finsbury Square EC2A 1AH
Price guide: Hot desk for 10 days per month for £265p/m.
Huckletree has a number of co-working spaces around London, and even more in other parts of the country. If you’re looking in trendy Shoreditch for a place to get your head down and tackle your to-do list or host client meetings, check out their space in the iconic Alphabeta Building.
It’s a bustling, creative co-working space that’s particularly popular with tech startups. Get involved in regular networking events and growth workshops here while you’re working in the Big Smoke.
Check out the ‘focus-enhancing library’ when you need complete peace away from the buzz of the breakout spaces, meeting rooms and desk areas.
Pavilion Club – Knightsbridge
Price guide: Hot desk from £250p/m
Does a hot desk with views over Hyde Park sound good? This is where you’ll find it. Benefit from top-of-the-range conference call technology, premium shower facilities and 24-hour access.
Pavilion Club is particularly great if you’re looking for somewhere with wow factor to host client meetings in Central London. As stunning inside as it is out, the premium meeting spaces here are sure to help you make the right impression.
Especially if you take them up to the roof terrace or down to the ground-floor bar and restaurant, with a menu from Michelin-starred chef, Tom Kerridge.
Paddington Works – Paddington Basin
Price guide: Dedicated desks, £450pm. Hot desks, £350pm. Day pass, £25.
Hot desks have been designed with a user-centric approach to facilitate different types of working styles, whether you prefer quiet focus or the buzz of conversation. Interior design and furniture are equally ergonomic so you can be comfortable while you’re working away.
Need somewhere to record a podcast? Paddington Works is equipped with the latest software and equipment, as well as expert studio engineers to help with all your recording, editing and production needs.
WorkingFrom – Southwark
Price guide: £200p/m for hot desks
Flexibility is the main focus at WorkingFrom. Solo freelancers rub shoulders alongside businesses with large teams – and everything in between – in a trendy space set up for agile working of all shapes and sizes.
Amenities include complimentary meeting rooms, breakout spaces, a wellness studio and privacy phone booths. Other great features include day-use lockers, secure bike storage and even an in-house laundry service. Oh, and impressive views over the Thames through floor-to-ceiling windows.
Second Home – Clerkenwell Green
Clerkenwell House, 45-47 Clerkenwell Green EC1R 0EB
Price guide: Hot desk day pass from £18 per day or £250p/m
Renowned for its biophilic design and natural light, Second Home is like a sanctuary within the city. The perfect place to co-work if you’re a freelancer looking for a little company but still keen to find calm so you can concentrate distraction-free.
There’s even a members’ Slack channel so you can stay in touch with people you meet and mingle with. From desks and meeting rooms to breakout spaces and a community cafe, there’s everything you need.
Storey – Broadgate
Storey Club, 100 Liverpool Street, Broadgate EC2M 2AU
Price guide: From £925pm
This award-winning space is more than just a workplace. It’s a multi-purpose complex complete with luxury stores, bars, and restaurants, as well as a roof terrace restaurant with sprawling views of the city.
Running off 100% renewable energy, everything from the lights, temperature and air quality to the traffic of members is controlled by SMART sensors. One for those with bigger budgets – but a glorious location all the same.
Head over to our freelancer information hub for even more guides, tips, and advice.
Once upon a time, our devices and phones served just a handful of purposes. These days, they’re more like an extension of ourselves.
Our smartphones (and other devices) are now our calendars, online banks, health trackers, nutrition guides, maps, the key to instant communication with contacts all around the world, and so much more.
Professionally, apps can drive productivity, boost organisation, automate some of your most arduous tasks and help you set up and maintain robust processes and systems.
That’s why, as a freelancer, staying up to date with the latest apps is such an effective way to stay on your A-game and make your life a whole lot easier, faster, smarter and sometimes, even cheaper.
The apps every freelancer needs in 2024 (and beyond)
The world of apps is fast-paced and quick-changing with a seemingly endless list of options. So, figure out where you would most benefit from some app-based support and focus your efforts there.
We share 10 of the best apps for freelancers in 2024, broken down into five key categories:
- Finding freelance work
- Project management
- Design and creation tools
- Social media
- Bookkeeping and accounting
So, let’s get stuck in!
Finding freelance work
Finding freelance work is no mean feat, especially when you’re also trying to focus on the active briefs and clients you already have. Apps can make sourcing and securing work far less daunting and time-consuming.
Two of the most popular apps to help find freelance work are Upwork and Fiverr.
Upwork
One of the most professional and reputable platforms for finding freelance work, the Upwork app is a must. You can search for jobs, send files and communicate with clients on the go, whenever, wherever.
Fiverr
Promote your services, set your prices, and compete against other freelancers. Build up positive reviews and remember to price yourself competitively but not too cheaply. Great for quick turnaround tasks – but watch out for spammy listings.
Project management apps for freelancers
As a freelancer, you’re almost always juggling a number of different projects, clients and deadlines at a time. Centralising it all into one place using a project management tool is a brilliant way to keep on top of everything, plan your capacity, manage expectations and avoid burnout.
Two go-to project management apps (for good reason) are Trello and Monday.com. As a freelancer or ‘solopreneur’, you might prefer the simplicity of Trello. If you’re interested in built-in budgeting, invoicing and marketing tools too, monday.com should tick all your boxes.
Other great options include Asana and ClickUp (which can even be added to Chrome, Alexa and Google Home).
Trello
Organise all your tasks visually into different boards and use the customisable Kanban workflow to easily manage multiple projects and deadlines.
If you’re working in a team, invite others to your Trello boards and assign tasks with the click of a button. View tasks and projects by calendar or category, depending on how you’re working.
Monday.com
This comprehensive project management platform and productivity app makes managing tasks and organising collaboration at scale a total breeze. Integrate your widgets and other favourite tools to streamline your entire workflow.
Design and creation tools
If you require creative design tools, but you don’t need the full-on power of Adobe, then Canva and Figma might be a useful starting point.
Canva
This app gives you access to millions of high-quality photos, icons, illustrations and templates so you can create things like social media images, business cards, decks, portfolios and advertising assets from your mobile.
Canva is a beginner-friendly alternative to more specialist (and costly) tools like Adobe Illustrator.
Figma
This is a fantastic collaborative tool that enables designers to co-work with clients and peers (such as copywriters and developers) to create, collect feedback and test designs in one platform. It’s a super-efficient way to share work, gather feedback and implement changes.
When it comes to copy and content, check out Grammarly to save valuable time and keep your spelling and grammar in check.
Social media
Social media can be an invaluable tool for getting your name out there, building your audience and sharing your content far and wide.
However, to get the most out of your social media channels, they require investment of time and effort, which can be significantly optimised with a scheduling and management app. Two of the most popular right now are Hootsuite and Loomly.
Hootsuite
Download the Hootsuite app to draft, schedule, and publish social media content across all of your platforms from one dashboard. You can also engage with your audience and access performance analytics directly from the app, without having to log in to separate social media accounts.
Loomly
This other popular social media management platform has recently launched a brand-new mobile app. Once all your social media accounts are connected, you can then create, optimise, schedule and analyse performance of your social media content all in one place.
The main difference between Hootsuite and Loomly is that Hootsuite has great social listening capabilities. This means you can monitor when people are talking about your chosen keywords online and what they’re saying. Loomly doesn’t yet offer this functionality.
Bookkeeping, accounting and invoicing
Keeping your accounts up to date and staying on top of invoices is critical for success as a freelancer. Doing so will help you run as tax-efficiently as possible and reduce instances of late payments to protect your cash flow.
That said, recording things like transactions and invoices and uploading expenses can feel daunting and downright painful at times. Using an app makes the whole thing feel far easier and more efficient.
Quickbooks
The Quickbooks accounting app is one of the most popular of its kind, especially as it has a plan exclusively for self-employed freelancers. Having an app like this on your mobile, while you’re out and about, makes it quicker and easier to track miles and record transactions as and when they happen.
Pandle
This is a free accounting app that is also a bookkeeping software and invoicing platform. Manage customer and supplier invoicing, upload receipts, view reports and complete banking straight from your mobile.
The best thing about Pandle is that all the cloud-based tools are all designed “with real people in mind”, making it perfect for small business owners and freelancers just like you.
Both accounting apps have a long list of features designed to support the financial growth and stability of your freelance business.
Done here? Check out our article on free tools for running a business solo—or find more expert advice and resources in our freelancer information hub.
Freelancing is exciting and liberating for so many different reasons, but being self-employed does mean you miss out on some of the statutory benefits of working for an employer – such as maternity or paternity pay. Unfortunately, there isn’t much support available for freelancers in the UK taking paternity leave so there’s extra pressure to think about what your options are.
How do I plan paternity leave as a freelancer?
Preparing for parental leave as a freelancer is no mean feat, and sadly can be tougher than it is for employees who have statutory rules in place to protect them.
Planning ahead can help you minimise the impact on your finances and freelance career whilst you take some time out to welcome the new addition.
Decide how much time you want to take off
The first thing you need to do is to decide how much time you want to take off. That’s one of the luxuries of being your own boss – you have more flexibility to choose how long your paternity leave is. Plus, if you want to extend it, you can – as long as you communicate clearly and fairly with your clients.
Figure out how much you need to save
Deciding how much time to take off will help you work out how much money you need to save to cover loss of earnings during that period – which will, in turn, make your next steps clearer.
You may already have a substantial nest egg, in which case, great! If not, you may need a strategy to take on more work pre-paternity, or to rearrange existing projects to accommodate your needs.
Financial support options for freelancers on paternity leave
Freelancers don’t have access to the same paternity benefits as employees, but there are other financial avenues you could explore.
Do some research to find out if you’re eligible for child tax credit or child benefits while you’re not able to earn through your freelance business.
This will help protect your cash flow and ease financial pressures until you can get back to business.
How can I prepare my business before I go off on paternity leave?
To prep your business and your clients for a period of paternity leave, here are some important action points to tick off your to-do list ahead of time.
Notify your clients
Communicate your paternity plan with your clients as early and as transparently as possible. This will limit stress and help make the transition process as smooth as possible for everybody involved.
Set automated responses
Wherever you can, set automatic responses up for when you’re ‘out of office’ (e.g. email, social media, etc.). It’s also a good idea to leave a note in your email footer, ahead of time, to warn people in advance of when you’re going to be harder to reach and how long for.
Create and pin a social media post
Share an update on your social media accounts and where possible, pin it to the top of your profile so anybody visiting your page will be sure to see it.
Share an update on your website
Leave an update somewhere on your website too so any visitors there will be made aware that you’re on leave. A great place to do this is on a small banner at the top of your website if you want to keep your site running as normal. Alternatively, you could set up a redirect page with a custom message so that your website can’t be accessed while you’re ‘out of action’.
If you operate an ecommerce site or sell through an online platform, for example, you might want to set your profile to ‘holiday mode’, so that customers can place orders on the understanding that you won’t be able to supply anything until you’re return.
It depends on how unavailable you want or need to be during paternity.
Plan your return to work in advance
Plans might go out of the window once the new baby arrives, but it’s still worth putting a proposed timeline in place to give your clients a rough idea of when to expect you back.
It will also provide you and your family with a date to work towards, even if it ends up having to change further down the line.
You could also think about when you might be able to turn your attention to freelance work during your paternity leave period.
Perhaps there is one day a week, or an hour or so a day, that you could reply to emails or join meetings, for instance. Just remember to be realistic and go easy on yourself because juggling a new baby with freelance work isn’t always advisable.
Communicate your return date clearly
When posting updates and setting auto-responses, make sure to state your planned return date clearly so your clients know when to expect you to resume work.
Showing this level of consideration for their plans and their project pipeline will demonstrate that you care about them and how your situation is impacting them too.
What should I do with my freelance business while I’m on paternity?
Something you could consider is hiring paternity cover for while you’re away.
This could be a friend or family member to manage non-specialist admin, or even another freelancer to take over project-based work in your absence.
The pros and cons of paternity cover
When you have clients who need hands-on attention, the prospect of leaving them while on paternity can be stressful.
That’s why some freelancers opt for paternity cover. However, it is crucial to safeguard your business in the process.
The benefits of paternity cover include:
- Minimal disruption for your clients and therefore minimal disruption to your working arrangement with them.
- Paternity cover can keep your projects ticking over so you can simply pick back up where you left off when you’re ready.
- With cover to help, it will be easier for you to dip in and out of work as and when you find some spare time during your leave.
As well as the cost implications of paternity cover though, there are also a couple of other things to think about carefully, such as your professional reputation. Make sure you hire high-quality, reputable people who will work to the standard you would deliver yourself.
Another thing to consider is that there’s a risk anybody covering for you might poach your clients in your absence. Of course, if you work with people you trust implicitly, the risk becomes much lower, so choose carefully if paternity cover is something you want to try.
Whoever you choose to work with, put a contract in place so that there’s an official agreement between you and them. This will help prevent the risk of your clients being stolen from you while you’re on paternity leave.
Find even more advice and guidance for freelancers in our info hub.
Whether you freelance full-time or do it as a side hustle, the money you earn from self-employment won’t be included in contributions to a workplace pension scheme like it would be if you were an employee. So where does that leave freelancers when it comes to pension planning? In this article we’ll go over what your options are, and how to prepare for retirement. Read More
In the context of the Digital Platform Reporting Rules, a digital platform includes any website, software, app, or online marketplace that connects businesses (vendors) to users (customers) in order to sell goods or services. Etsy, Uber, and Airbnb are popular examples you will almost certainly have heard of.
These digital platforms are now responsible for providing information to HMRC about what their sellers are earning annually – a measure taken to clamp down on tax avoidance amongst freelancers, digital sellers, and gig economy workers.
HMRC having access to this information isn’t a new thing – it has always been able to request data about users’ earnings from digital platforms. What’s changed is that as of 1st January 2024, digital platforms are now required to actively collect users’ earning information as official protocol.
From January 2025, digital platforms will also be required to report the information collected about users’ earnings to HMRC. They should no longer wait for this to be requested. So, what do these updated rules mean for freelancers? Let’s investigate.
Who do the Digital Platform Reporting Rules apply to?
Essentially, any seller who generates income via a digital platform – whether they sell goods or services – could have their financial information shared with HMRC. This includes (but is by no means exclusive to):
- Freelancers
- Those selling goods via an online marketplace
- Those letting short-term accommodations such as holiday rentals
- Private hire services (including taxi drivers)
- Food delivery services (e.g. Deliveroo, UberEATS, etc.)
Keep in mind that the Digital Platform Reporting Rules might also apply if you’re a UK freelancer selling your services abroad.
Exceptions to the rules
If you are only an ‘occasional’ seller, digital platforms won’t need to report your earnings to HMRC. Those who fall under the category of an occasional seller are those who:
- Earn €2,000 or less
- Make fewer than 30 sales
However, if you’re a full-time freelancer, the exception of ‘occasional selling’ won’t apply to you – unless you have some sort of separate side hustle to support your freelance income.
How the Digital Platform Reporting Rules affect freelancers
Many freelancers use a digital platform to sell their goods or services, whether it’s a website, software, app, or online marketplace. As a result, the Digital Platform Reporting Rules apply.
The updated regulations also apply to freelance platforms such as Upwork and Fiverr. This means that any earnings you generate through these channels could be reported to HMRC by the platform.
If HMRC finds any discrepancies between your financial accounts and the information provided by the digital platform, this could be grounds for an investigation.
Is a tax return still required?
Yes, for those who the rules apply to, it is still necessary to submit tax returns as normal. Despite most digital platforms now being responsible for reporting to HMRC about what you earn from them, you (the taxpayer) don’t actually need to do anything different – as long as you were compliant!
So, if you’re registered as a sole trader, you’ll still need to go through the same Self Assessment tax return process in order to keep HMRC up to date and pay the required taxes and deductions. If you need to register, make sure you do it before the deadline!
Important dates to remember
Most freelancers submit their tax return using accounts on the basis of a tax year, which runs 6th April – 5th April. What could be confusing is that digital platforms will report user earnings to HMRC every calendar year 1st January – 31st December.
So, if you find yourself needing to compare figures, keep these different accounting periods in mind.
Do the rules affect tax allowances?
No, the Digital Platform Reporting Rules will not interfere with any tax allowances. This includes the Personal Allowance and the Trading Allowance.
The rules won’t affect your allowable expenses either. This means that if you make money through selling via a digital platform, you can still claim relief for all of your normal tax-deductible costs.
Digital Platform Reporting Rules FAQs
We’ve covered the fundamentals of the Digital Platform Reporting Rules but below are some further FAQs that you might find useful.
Will HMRC know about my online earnings?
If you meet the Digital Platform Reporting Rules criteria outlined above, HMRC will be informed of your earnings. That said, you should be reporting your earnings to HMRC yourself via tax return if your self-employment income is more than the Trading Allowance.
Do I have to pay tax if I sell secondhand clothes online?
If you earn more than £1,000 in a tax year through selling secondhand clothes through digital platforms like Vinted, Depop, and eBay, you will need to register for Self Assessment and pay tax – just like any other source of income.
What has been dubbed the ‘side hustle tax’ aims to help online sellers get their taxes right, as well as rooting out non-compliance more effectively. The Digital Platform Reporting Rules apply to resale sites like Vinted, Depop, eBay, etc., so it’s important to record your earnings accurately.
Can you find out what the platform told HMRC?
Yes, the digital platform is required to provide a copy of the data it reports to HMRC regarding your earnings from them.
Keeping accurate accounts
Although the Digital Platform Reporting Rules won’t affect allowances or tax-deductible expenses in any way, it is still essential to maintain accurate bookkeeping records..
Even though the rules also don’t impact the tax return process or liabilities, you still need to be meticulous in providing HMRC with the required information and meeting all of the necessary deadlines.
With digital platforms now responsible for reporting your earnings to HMRC, it’s vital that your own financial reporting tallies up.
Find even more advice and guidance for freelancers in our info hub!
Earning a living comes in all shapes and sizes these days, with a massive array of options for generating income, such as creating content for OnlyFans. Read More
Understanding what works and what doesn’t will help you grow your freelance career more efficiently. That way you can invest more in what supports this growth and less in what doesn’t. Keeping a close eye on what’s happening in your business will help you identify areas to focus on, and adapt your freelancing accordingly.
What is more profitable for you?
Analyse your offering and dig into the details of what clients are buying and what they aren’t. If a particular service simply isn’t in demand or costs too much to provide, then maybe it’s time to move on from it – at least in its current form.
If two services generate the same level of income, but one of them costs more to provide, then you might decide to focus on the most profitable of the two. On the other hand, the freelancing services you offer might be complementary, so consider whether removing one would also damage the other.
Choosing a pricing structure
How you price your offering and what you charge for each product or service is another element you should be reviewing on a regular basis.
One of the most obvious indicators that you might need to increase your prices is if you aren’t making enough money. Some other signals that it could be time to reassess your pricing structure include:
- When your outgoings increase: Things like inflation and market demand mean that sometimes, you end up spending more to produce your offering. This is an example of when a price increase is perfectly justified.
- If you hire staff: Again, this will increase your overheads, which might mean you need to bump up how much you charge for what you offer.
- Client feedback: If you notice clients are consistently surprised with how affordable your offering is, this could be a sign that you’re undercharging. You might also decide to charge more for particularly time-consuming clients!
- Competitors charging a lot more: if your competitors’ prices are way higher than yours, it could be a good idea to test an increased pricing structure of your own.
Of course, it is also important to assess whether or not you might need to lower your prices.
If clients aren’t buying what you’re selling or if you’re charging significantly more than your competitors, a price decrease could be what you need to see more sales coming in and boost your competitive advantage.
Client relationships
Contrary to traditional belief, the customer isn’t always right – or, at least, the customer isn’t always right for you. Assess your current client relationships and be honest about which ones are working and which ones aren’t.
If you feel a client relationship no longer serves you or your career positively, it’s probably time to part ways. This could be because it’s too tricky to manage expectations for the customer, for example, or perhaps they’re serial late payers and consistently behind on settling invoices.
Whatever the stumbling block may be, moving away from problematic client relationships will give you more time and energy to invest in flourishing and fruitful ones, both new and existing.
For the client relationships that are going well, you should think about how you can bolster these connections in order to retain the customer for as long as possible.
This is also a good opportunity to put your own contribution to client relationships under the spotlight. Are you doing enough to service your clients? Where could you improve? Putting an action plan in place can help you review and adapt the customer experience, and avoid the risk of complacency.
Payment processes
Look at your invoicing and transaction data to identify any clients that are regular culprits of making late payments, and consider how valuable this relationship is to you and your business.
Late payments can be extremely damaging for your freelance career, hindering your cash flow. Focus your energy on clients that don’t need chasing for payment and regularly fulfil their invoices on time.
Secondly, review your own outgoings and how you pay for business-related costs. Are there any payment processes in place that you could change or optimise to support things like cash flow and budgeting? Could you spread the cost, for example, or pay something upfront to save some money in the long run?
These are the types of questions you should ask yourself when it comes to analysing what works and doesn’t work financially for your freelance business.
Where you work
Another key thing to consider when you’re reviewing what works for your freelance career is where, when, and how you work.
As your own boss, you can structure your working life however you like – this includes the hours you work and where you work from. This has many brilliant benefits, but it also means self-employed people are often more at risk of burnout and a poor work-life balance.
For example, if you spend most of your time working from home, you might notice this impacting your physical and mental health as it reduces social connections and daily movement. As a result, you might choose to invest in a co-working space for part of the week to boost wellbeing, productivity, and networking opportunities.
This might also encourage you to work more structured, sociable hours, which will have a positive impact on your motivation and productivity too. The other side to this is the added cost though, so consider what this means for your profits.
How to measure the growth of your freelance business
Consistent growth and stable profits are usually a sure sign that something is working for your freelance career. Below are some of the most effective ways to measure and monitor this success.
- Review your client base: A growing list of regular clients is a really positive sign that freelancing is going well
- Assess your earnings: If your business is becoming more and more profitable, this shows your career is moving in the right direction.
- Use financial reports: Accounts and financial reports showing more money coming in than going out are a great indication of growth.
Looking for more advice on all things freelance? Head over to our hub where we have a whole host of handy guides and interesting resources for you to get stuck into.
Lots of freelancers work from home, often finding it to be cheaper and more convenient than finding workspace elsewhere. Working from home means you don’t need to take on the cost of a separate location, whilst making it simpler to work the hours that suit you in an environment you have control over. Read More
