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How Freelancing Works (Beginner’s Guide)

how-freelancing-works
Photo by Per Lööv on Unsplash

Are you thinking about making the move to freelancing? You’re not alone! There are currently 2.2 million freelancers in the UK and this number is growing. If you’re wondering how freelancing works and want to learn more, then read on. In this article, we look at how you become a freelancer, what kinds of freelancing jobs are out there, and we’ll give you some useful resources to help you on your freelancing journey. But first, what exactly is a freelancer?

 

How Freelancing Works

Freelancing is not a job itself. Instead, it refers to the way you work. When you’re a freelancer, you work for yourself. You have autonomy over the projects you take on and the hours you work. You usually work independently and decide how to run your business, within the relevant legal requirements.

Freelancing exists in all industries. Exactly what freelancing looks like for different people varies. Some freelance on the side in addition to their full-time work. Others might freelance part-time around caring responsibilities. And many people are full-time freelancers.

How Does a Freelancer Get Paid?

Freelancers get paid in different ways depending on the type of work they do. Many freelance writers get paid per word. A lot of freelancers are paid on a per-project basis. Some get paid an hourly rate. Freelancers may get paid via platforms like PayPal, or by bank transfer.

Contract work, consulting, and gig work are all terms that indicate someone is a freelancer. Regardless of the terminology used, the main criterion is that a freelancer works for themselves. They are running their own business. This is different from an employee who works for someone else. Let’s take a closer look at the main differences between being a freelancer and being an employee to really understand how freelancing works.

 

Freelancer vs Employee

Freelancer

Employee

Tax

  • Freelancers need to register as self-employed with HMRC or set up a company
  • They are responsible for doing their tax returns and paying tax/National Insurance at the end of the tax year
  • Freelancers pay annual tax in one or two lump sums, rather than progressively
  • The employer calculates and pays an employee’s tax and National Insurance on their behalf
  • The employer pays tax progressively throughout the year, on a pay as you earn (PAYE) basis
  • Employees don’t need to do a tax return at the end of the tax year

Pay

  • Freelancers choose their rates and how they charge clients
  • Freelance rates are generally higher than the salary of an equivalent employee (to account for the extra costs freelancers are responsible for)
  • Freelancers invoice for their work as it’s completed
  • Employers set employees’ salaries
  • Employees receive a weekly or monthly wage, based on their annual salary

Work Environment

  • Freelancers are usually responsible for their own workspace, so many freelancers work from home or from a co-working space
  • Freelancers need to arrange their own equipment, such as laptops, stationery, and software
  • Employees are usually required to go into the office each day
  • Employers provide employees with all the necessary equipment to do their job

Work Hours

  • Freelancers set their work hours
  • Freelancers don’t get holiday or sick pay, as they’re only paid for the time they work/projects they complete
  • Employees, especially in an office environment, generally work 9-5, Monday to Friday
  • Employees have leave entitlements so they can take certain types of paid leave

 

Why Become a Freelancer?

More Flexibility

There are lots of different reasons people decide to go freelance. For many, the freedom freelancing offers is a huge incentive. With freelancing, you have the flexibility to choose your hours and you can work from anywhere. The flexible hours also make freelancing an attractive way to earn some extra income on top of a full-time job.

Extra Autonomy

Especially once you build your reputation as a freelancer, you can choose the clients you work with and which projects you take on — and which ones you don’t! This gives you a lot of autonomy over the direction of your career and your professional development.

Still Requires Hard Work

It’s important to remember that while there are plenty of benefits of freelancing, it also requires a lot of hard work. When you’re a freelancer, you’re the business. You’re the manager, the worker, the accountant, the marketer, and the administration team. There’s also no such thing as holiday leave or sick pay, and you need to account for this in your freelance rates.

But one of the biggest advantages of freelancing is that it’s open to everyone. There are hundreds of jobs you can do as a freelancer!

 

What Kinds of Freelancing Jobs Are There?

According to a 2020 study, the five most popular industries for freelancers are:

  1. Artistic, literary, and media occupations
  2. Managers and proprietors in other services
  3. Teaching and educational professionals
  4. Functional managers and directors
  5. IT and telecoms professionals

But the possibilities for freelancing jobs are endless! Here are just a few examples of the kinds of jobs you can do as a freelancer:

  • Photographer
  • Personal trainer
  • Copywriter
  • Proofreader
  • Dance instructor
  • Financial consultant
  • Voiceover artist
  • Masseuse
  • Translator
  • Website designer
  • SEO consultant
  • Transcriber
  • Language teacher
  • IT consultant
  • Content writer
  • Graphic designer

 

How Do You Become a Freelancer?

Becoming a freelancer is both easy and hard. It’s easy because anyone can choose to become a freelancer at any time. You can wake up tomorrow and decide to start your freelancing career. But when it comes to building a successful freelancing career, there’s also a lot of hard work involved.

To help, here are five steps to get you started on the path to becoming a freelancer.

1. Figure Out What Kind of Work You Want to Do

The first step to becoming a freelancer is figuring out which industry or niche you’re going to freelance in. This is easier if you’re planning on continuing the kind of work you’ve done as an employee. Or perhaps you have a hobby you’ve started to monetise and want to build on.

But nothing is stopping you from branching into a different kind of work. Start by looking at your existing skills and previous experience. Which of these can you transfer to a new industry or role? You also need to think about whether there’s a market for the service you’re offering. Once you’ve narrowed down exactly what it is you want to do, you can then start to build your freelancing business.

2. Upskill if Necessary

Many people use a move to freelancing as an opportunity to also change career direction. If you’re in this boat, then you might need to upskill. Identify whether there are any gaps in your skills for the kind of work you want to start doing. You can then find a course to help you. This could be through formal education, for example at university, or through other short courses.

There are also lots of free and paid online courses available for almost any skill. For example, Skillshare and Udemy are online learning platforms that offer courses in bookkeeping, productivity, marketing, writing, web development, user experience design, yoga – the list goes on!

3. Identify Your Target Audience

Once you know what service you’re going to offer, you need to think about who you’re offering it to. This is your target audience, or your clients. Identifying your audience or clients helps you develop your marketing strategy and identify potential avenues to help you build your freelancing business.

This might be easier to do if you’ll be freelancing in an industry you’re familiar with or already have connections in. But if you’re changing careers or moving industries, spend some time on this step to make sure you’re targeting the right market to grow your freelancing career.

4. Set up Your Business Structure and Internal Processes

Once you’ve gone through the planning stages, it’s time to get your freelancing business set up from a legal and tax perspective. The specific requirements for this depend on your location. In the UK, for example, most freelancers register as self-employed with HMRC.

You also need to consider the practical aspects of running your freelancing business, including:

5. Find Work

Now all that’s left to do is to go out there and find some work! There are several ways you can do this. You can start by exploring your existing networks. Is there someone you’ve previously worked with who could be interested in taking you on as a freelancer? Do your family or friends have a business that needs a freelancer with specialised skills?

For beginner freelancers, online job boards and freelancing sites are great starting points for finding work. While the rates for work on these sites are generally on the low side, you can use the work to build your experience, reputation, and portfolio. This then helps you find clients from other sources.

Some good, general freelancing job sites are:

You can also try cold outreach. If there’s a business that you think would benefit from your services, reach out and tell them you would love to work with them. While this can feel a bit scary at first, it can really pay off when you find yourself working for your dream clients! Note that this approach is generally quite a slow one. It needs a lot of time and effort, and you’ll need to be prepared for many rejections. However, perseverance can yield high returns!

 

Freelancing Resources

If you’re considering going freelance and want to learn more about it, there are plenty of resources out there. Freelancing is a well-trodden path and freelancers across various industries are generous when it comes to sharing their experience and advice.

So, take advantage of this and learn from their experiences! Below are some freelancing resources we recommend to get a stronger grasp of how freelancing works, and how you can find success.

Newsletters

  • Lance newsletter offers insights from Anna Codrea-Rado’s own journey from news editor to freelance journalist.
  • In her monthly newsletter, Freelance Feels, Jenny Stallard reflects on a particular aspect of freelancing life and includes links to recommended resources and upcoming events and awards.
  • Counterflows by Lauren Razavi is one of the only newsletters out there dedicated to exploring topics related to remote and nomadic work.

Podcasts

  • Each week on Being Freelance, host Steve Folland interviews freelancers across a range of creative industries for their career advice.
  • Out of Office, hosted by Fiona Thomas, looks at a different freelancing topic each episode, with guest interviews.
  • 99 Problems (but a boss ain’t one), hosted by Michelle Pratt and Katy Carlisle, discusses different topics affecting freelancers such as tricky client conversations, time management, and mental health. It’s also the winner of the best name ever for a freelancing podcast!

Books

  • The Freelancer’s Bible by Sara Horowitz. Horowitz knows a thing or two about freelancing. After all, she’s the founder of the Freelancers Union, a US-based advocacy organisation! Packed with practical advice, this book is ideal for freelancers at any stage of their career.
  • The Money Book for Freelancers, Part-Timers, and the Self-Employed by Joseph D’Agnese and Denise Kiernan. This book focuses on some of the most important aspects of freelancing – how to make money, manage your finances, and grow your freelancing business. While it’s pitched at the American market, there are lots of useful finance tips for freelancers based anywhere.
  • You’re the Business by Anna Codrea-Rado. As well as writing the Lance newsletter, Codrea-Rado published her freelancing guide earlier this year. Based on her own experiences and interviews with other freelancers, this is a step-by-step guide to setting up a successful freelancing career.
  • The Multi-Hyphen Method by Emma Gannon. While not strictly a freelancing book, this is an ideal choice for anyone looking for success from an entrepreneurial standpoint. In the book, Gannon explores the benefits of exploring all of your passions and the reasons it’s okay to be a jack-of-all-trades. You can check out our top five takeaways from the book in this article.

 

You Can Start Your Freelancing Journey Today

Now that you know how freelancing works and the steps to becoming a freelancer, nothing is stopping you from starting your freelancing journey today! It’s hard work to make it as a freelancer. But the benefits of being your own boss and having a flexible career make it well worth it.

We have lots of articles on freelancing and how to start your own business on the Sophical Blog. Check them out here!

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