GROWING IT ALONE
There are now 1.4 million freelancers contributing to the UK economy today and that figure is all set to grow if the last ten years are anything to go by; since 1998, there has been a 14% growth in freelancing. And, whilst the credit crunch is certainly having an effect on the British economy, it would seem that many are not being put off and are taking the chance to set up on their own.
Your own boss
Some of the common reasons cited for going freelance include being your own boss, making more money, having freedom and variety and striking the work/life balance.
The pitfalls include less security, uncertainty, hassle in running your own business with forms and legislation, working on your own and being 100% accountable.
One thing that is certain is that as a freelancer you will be faced with some new challenges. Having set up and chosen the right structure that works for you - you will hopefully have your accounting, banking and insurance issues as well as tax matters in place - you can focus on your core business, securing the work and handling clients.
Devising a Plan
You need to research your market – understand where you fit in that marketplace, how many freelancers already work in your area, who’s the competition, how much do they charge? You can then position yourself accordingly and decide what you can offer in terms of price, customer service and terms of business.
Isaac Nwaogu, who is a member of The Professional Contractors Group, which represents the UK’s freelancers, has been self-employed for the last three years and is a plasterer. He is set up as a limited Drylining company. On being self-employed, Isaac said: “I like a challenge and I also enjoy the freedom that comes with self-employment. What’s more, as your own boss, you have your own time to manage and can organise your business the way you want to. You are not pushed by anyone and you can use your own initiative, method or system to do the job in hand.
“Being self-employed also means that I work with other tradesmen which means I can pick up useful tips and learn new skills on the job.”
Managing good client relations are vital and building an open and honest relationship with the client is the foundation of any assignment. It is important to show that you understand the assignment’s objectives, needs, challenges and constraints and discuss how you will work with the client. It is important that time is taken to review and provide feedback on the project itself which presents a good opportunity to build the client-contractor relationship. This can be done at any stage of the assignment and helps to prevent any misunderstandings.
Contracts
The importance of contracts is an essential part of every freelancer’s toolkit and should
not be underestimated. Not only do they outline the expectations of both parties, but they also provide a legal framework within which these will be achieved, and a back up should legal intervention be required. Contracts provide a formal definition of the business relationship between the freelancer and agency or direct client.
You need to agree with your client whether you are being taken on as a temporary employee or a contractor. If your client will control you closely, guarantee to pay you whether or not there is work to do and not allow you to send a substitute if you are ill or unable to come in to work, then you will be probably be hired as an employee on a fixed or short-term contract of employment. You can then accrue employment rights from day one.
However, if you are allowed to use your professional judgement to work out how to perform tasks, can go home if there is no work to do or can send a suitable alternative if you are unavailable then you are a contractor with no employment rights.
Just as importantly, agree the objectives and outcomes of the project you are undertaking – define deliverables, set timescales, agree a start date and negotiate costs.
Added Isaac: “My advice to anyone thinking of going it alone is to seek advice from those in the same line of business as you. Also, do not waste the valuable time you have. Do your research and look out for opportunities all the time. If possible, ally yourself to larger companies and sub contract yourself out to them. That way you get two bites of the cherry.
“The construction industry is being hard hit at the moment – only the fittest will survive and I believe that to be self-employed you need to be fit to adapt to whatever the climate throws at you.”
Growing trend
Freelancers are part of a growing trend towards “the alternative to the status quo” - neither employer nor employee - that is increasingly being recognised as an immensely important, contributing sector by major organisations and crucial to the success of UK plc. Businesses are scaling back on their expensive benefit-heavy workforce more and more, recognising the benefits of tapping into the freelance resource when they need it. Those freelancers with the skills and tools to run and develop their businesses will find themselves in a win win situation.
Article provided by John Brazier, MD of The Professional Contractors Group (PCG), www.pcg.org.uk, a not-for-profit association that was established in 1999 to provide representation, support, and advice to anyone setting up in business on their own.
