A new survey has revealed that millions of people in the UK are keen to be part of the already booming gig economy, which currently consists of 8.6 million full-time and part-time freelancers.
Preparing to go freelance
The research by insurance company Direct Line found that 5.3 million people dream of becoming their own boss in the future, while 12% of the working population have freelanced previously at some point.
But these aren’t pie in the sky dreams; it seems many freelancers give the decision careful thought and prepare properly, taking an average of seven months and three weeks to gear up for their new career. 27% said they read up on tax issues during that time and 25% were busy identifying target markets and audiences.
However, 30% admitted they spent less than a month preparing to go freelance—a foolhardy move!
71% of self-employed workers said they saved up money beforehand, saving, on average, the significant sum of £16,000 before taking the plunge; 69% said this had been enough to meet their needs.
29% admitted they hadn’t saved at all… foolhardy move no.2.
When those who were sensible enough to save were asked why they did so:
- 43% said it was to allow for potential shortfalls in monthly income
- 34% wanted to make sure they could afford essential business goods
- 16% realised the need to build up a fund for holidays or sick leave
The pitfalls of freelancing
Jazz Gakhal, Managing Director at Direct Line for Business, said that although the prospect of being your own boss can be tempting, freelancing has pros and cons.
“Independent contractors can often earn more by charging day rates, but don’t benefit from paid holiday, pensions and sick leave.
“Any budding entrepreneur should consider the value of these additional benefits, as well as any change in salary, before making the leap,” he cautioned.
And it’s some of those cons that keep potential freelancers awake at night. When freelancers were asked what their biggest concerns had been prior to launching their freelance career, these were their top five:
- 33%: dealing with tax issues
- 26%: not getting paid holidays
- 26%: being unable to meet existing financial commitments
- 20%: marketing and bringing in new clients
- 19%: being unable to save for a pension
If you’re considering freelancing, saving up to have a financial safety net and learning all you can about potential markets and freelancing in your industry could make the difference between failing and succeeding as a freelancer. Try to curb your impatience, and take the time to properly prepare for your new career.