Seven essentials to successful freelancing

You need to provide genuine reasons for people to trust you and choose your services when you join the freelancing world.

In the style of e-myth (Michael Gerber), an entrepreneurial spark has happened. We no longer want to be micro-managed in employment – we want to do it ourselves. In 2014, an Elance-oDesk study of 1049 people found 30% of the Australian workforce already enjoyed some form of freelance employment.* Applied nationally, that’s 3.7 million people in Australia earning through freelancing.

Statistics from 2016 reveal the trade-off between job certainty and flexibility has grown. In Airtasker’s third annual Future of Work study, 72% of recipients agreed with the statement that “the flexibility of freelancing or working for yourself would make up for the lack of certainty or predictability of the work.”**

As the concept of a freelance career becomes more mainstream, how do you ensure you avoid the pitfalls and secure a viable income? We share these seven tips.

1. Make your passion work – know your WHY

Turning one of your favourite leisure activities into your everyday working reality can be both a blessing and a curse. Be honest with yourself. Ask, “Am I prepared to put a competitive price tag on this?” and “Will people value this service as much as I do?” Commercial pressures can be a passion killer. But they can also transform your skills into an empowering opportunity.

2. Practice patience and discipline

To limit your initial exposure to financial risk, start building a reliable client base while you still have a separate regular income. This logical approach requires you to build a small business in your spare time. This takes patience and discipline. It can prove tricky when it comes to managing your time and workload. Remember, it’s a transitional period and you’ll be the one to reap the rewards once you become a full-fledged business owner.

3. Create a killer portfolio

You need to provide genuine reasons for people to trust you and choose your services. Even if you’ve only done a few side projects for friends, create a portfolio and gather testimonials that prove your worth.

4. Think outside your postcode

Do you have to be in the same room to deliver every aspect of your service? Are there time-consuming parts you can outsource? Don’t be afraid to think global when establishing your processes and customer base. Cloud-based technology is opening up our working world and new businesses are poised to take advantage of that.

5. Have a reliable accounting system

Independent workers are responsible for the health of their business finances. You’ll need to send out invoices, enforce payment terms, track and chase money, manage your cashflow, and put money aside for your taxes and superannuation. Don’t shy away from the numbers. Choosing a cloud-based accounting system like Xero is an important step towards having constant, direct and visual access to the big picture.

6. Budget for quiet periods

No matter how in-demand your services may be when you start, it’s likely that you’ll experience slow patches where work (and money) are less forthcoming. Protect yourself by creating a buffer. Aim to hold three to six months of your earnings in a high-interest fund. Don’t forget to diversify your clients so you’re less reliant on a single relationship.

7. Plan for time off

Independent work tends to offer more flexible hours and remote-work opportunities than salaried roles. You do sacrifice sick pay and annual leave payments for the privilege. Factor some time off into your work schedule (and your savings) and consider finding someone to cover your role and keep your business operational. We all need a break every now and then – you’ll thank yourself for it later.

* http://www.news.com.au/finance/work/careers/nearly-one-third-of-australians-taking-part-in-51-billion-a-year-freelance-economy/news-story/42c1fe5955de866f98fcc27d5b7434ac

** https://www.airtasker.com/future-work/

Melanie Power, Head of Bookkeeping, Xero Australia