An ever-increasing number of people are moving away from full-time employment towards freelancing. In the past, such a career move was usually reserved for those in senior positions facing redundancy or looking for early retirement. Nowadays, however, a much broader group of individuals are taking steps to set up on their own and become their own boss. Here are some tips to help ensure that your transition towards freelancing is smooth and successful.
What Does Freelancing Entail?
Many people have a misconception that the grass is greener on the freelance side of the employment market. While it is true that there are considerable upsides to breaking out on your own, these bring some complications with them.
One of the biggest mistakes that new freelancers make is simply sitting at home and waiting. This tactic almost always ends badly. As a freelancer, you can’t rely on your superiors to provide you with work. Instead, you need to get out there and fight for contracts. Additionally, you may be required to work different hours than you are used to since you will be giving up a nine-to-five office job stability.
Despite these issues, the ability to set your own working hours, control your schedule and workload and have more freedom in your working life is enough for some people to move towards freelancing. If managed correctly, the upsides of freelancing can significantly outweigh the drawbacks.
Get Out There and Network
Have you ever heard the saying, “it’s not what you know, it’s who you know”? Sure, you need to be competent and skilled to successfully retain clients, but good luck getting any in the first place without some graft.
Before setting out on your freelance journey, you should contact everyone (really everyone) that you know in your industry. Inform them of your decision to become an independent contractor and give them a timeframe for when you will be taking on jobs. Also, impress them with your skillset at the same time.
Discussions with prospective clients will undoubtedly take place some time before the work is actually due to begin, so giving yourself a head start here is essential. The more experience, contacts and references you have before going freelance, the better your chances of success later on.
Additionally, make use of networking events or services like Linkedin to publicise your services. This can help you find new contacts in the industry and, ultimately, more work later on.
Insurance is Essential
When working for a company or another individual, there are things that you will likely never need to think about. This is one of the key upsides of full-time employment over freelancing. When you strike out on your own, you will need to consider aspects of business like insurance or taxation that you might not have needed to before.
If you are thinking of becoming a freelance financial service provider, you will need to consider insurance to protect your business and your clients. This is essential, as, without insurance, your business could be dramatically impacted by an unforeseen event. Clients may also be unwilling to work with a contractor unless sufficient safeguards are in place.
Thankfully, it is becoming more accessible than ever for freelancers to get financial services insurance, thanks to the industry’s ever-growing number of independent providers.
Take Control of Your Taxes
Much like any other job or business, freelancers are legally required to pay their taxes, whether federal, state or local. In practice, this means filing your estimated tax returns, much as you would had you started your own business.
The critical difference between filing taxes as an individual rather than as a business is that they will be filed under your name and social security number. For typical businesses, this would be the business name and their tax ID number.
If you have any clients who pay you more than $600 in a calendar year, they will need to provide you with an IRS form 109. You can use this to report your earnings to the relevant authorities.
Conclusion
On the whole, striking out on your own can be a great career move for many people in the finance industry. While it offers a lot of freedom, you need to carefully consider your strategy before becoming a freelancer. This will help you to gain clients and retain them in the future.
