The notion of freelancing and being your own boss is an appealing one for many people and with the right set of skills and the drive to succeed, it can be a great experience. But as with any career shift, there are things to bear in mind before taking the leap. Here are seven things you need to consider before making the switch to freelance life.
1. Getting a mortgage could be harder
The process of applying for a mortgage is challenging enough for anyone, but with most mortgage providers preferring clients in full-time employment, you may find that getting a mortgage as a freelancer all the more difficult. But while it might be a tougher experience, it’s still possible.
If you think that buying a home is on the horizon for you, you may want to research what lenders are looking for from self-employed people so that you can be better prepared when the time comes to buy a property.
2. You choose your working hours
As a freelancer, there are plenty of opportunities for when and how you work, as you determine your own hours. There’s no strict 9-5 schedule to adhere to so you can pick the times where you’re most creative and able to work to your best ability. It also offers you the opportunity to pick and choose who you work with. But with this freedom comes the risk that you’ll wind up working all hours, from morning until night and weekends too.
A freelance schedule requires a level of discipline that employed positions don’t need, as you know the hours you’ll be at the office and when it’s time to go home. When you’re self-employed you have the benefit and burden of choosing your own work hours, so it can be a good idea to block out time in your calendar, so you know in advance of the day starting when it’s time to clock off and rest.
3. The potential effect on your credit score
As any freelancer knows, self-employed income can be varied – some months you’re inundated with work and your finances look great, and others can leave you twiddling your thumbs wondering when the next client will call. A fluctuating income can make obtaining credit difficult, whether it’s a mortgage, a loan or even a credit card.
Even those who are great at saving money could find that their credit score is poor, due to lenders not having enough information to assess. Taking a greater interest in maintaining a strong credit score is an easy way to stay on top of your credit rating to help you in the future, so you can prove to lenders you’re a responsible customer.
4. Planning ahead becomes essential
As an employed individual, you don’t need to worry about where the clients or work is coming from – you can simply get to work on projects and tasks as they are assigned to you. But when you’re freelance, you always need to be planning ahead. You need to know in advance what projects are lined up and be in search of new client’s months before your current projects are finished.
It’s important to remember that as a freelancer, you’re not just doing with the work you’re trained to do – you also have to deal with all other aspects of running a business, from marketing and accounting to administration. So, being organised and able to plan and adapt is vital to your success.
5. Prepare to become your own project manager
When you’re a freelancer, you’re also the project manager for any client that hires you, so you need to be able to learn the skills and tools necessary to do this successfully. It’s important to keep your skills sharp and stay on top of the latest trends and software options, as well as new ways of thinking.
You also need to be able to develop excellent communication skills and be able to maintain an open dialogue with your clients at all stages of the timeline, even when there are challenges and setbacks.
6. You’ll need to be ready for rainy days
Just as there can be financial windfalls in freelancing, there can also be rainy days where work and money aren’t as free flowing as you’d like. This can create some challenging times so saving becomes all the more important. You need to be able to prepare for lulls in work, as well as for upcoming expenses such as your taxes each year. It’s critical that during those periods of the year where work is coming in and you’re in a positive financial position, you save for quieter times to reduce stress and worry.
7. Work-life balance is essential
Some people have the view that freelancing offers a brilliant work-life balance, but actually it can be challenging to switch off from work when you don’t have a set cut-off time each day.
What’s more, when you’re responsible for your own income, it can be tempting to take on every project and overwork yourself. It has been reported that many freelancers suffer burnout, as a result of working long hours and not resting enough, so it’s essential that you divide up your workday and personal time properly to avoid this.
Freelancing is a fantastic challenge and can be a fun way of building a career you love, but there’s also plenty to plan for and consider before you begin to set yourself up for success. From managing your money properly to making sure you stay organised and on top of your schedule, these tips will ensure that your freelance career is thriving from day one.