To ask what you wish you'd known before becoming self employed?

[nearlynermal]

I'm looking to set up a freelance business after many years of full time employment. Is there anything you would have done differently when you were starting out?

Plan.

Write down all of the potential outgoings. Get friends and kids to have a look. They will find more. Then you have a chance of pricing properly.

Record all sales. Record all outgoings. Keep all correspondence.

DO IT DAILY. You will not catch it up at year end. YOU WON'T.

If you are going to need to borrow or have queries, see an accountant.

Treat the business as your employer not a piggy bank.

If in doubt, ask. Don't guess.

Pay for accounting software and learn how to use it.

A lot of the issues above like invoicing, VAT etc can be contained in accounting software like Xero. Means you can use your accountant for tax and financial planning rather than as an expensive bookkeeper.

Had no idea how much I’d enjoy it.
It is so great not feeling bad about taking time off for any (or no) reason.
Had no idea that so many successive governments would collude with HMRC to make things exponentially more difficult each year - still winning overall though and I don’t miss performance appraisals and all that associated shit.

It gave me a confidence boost that despite the shitty comments from my manager when I was a permie, my skills were in fact valued and valuable.
Be prepared for resentment and ill-informed comment if you have to work with permie workers at times - it comes with the territory.

@eatyourcake
I got that this Christmas - I had a contractor issue an invoice on the evening of Christmas Eve, I have to inspect site and certify the works been done so that the client can pay the invoice - The whole process including client payment needs to be done within 7days of issue of the original invoice.
Funnily enough this time I said I wasn't doing it until I was back in the office this week and they needed to reissue their invoice this week to start the process properly as I wasn't going out to check their work on Christmas Day!!

Don't believe a word Sanjeev Baskar says on his QuickBooks adverts. Accounts are not easy and most people can't do it themselves - or they can but they won't be claiming everything they're entitled to and will be claiming lots they're not entitled to. I can't do your job so don't think it's easy to do mine. Use Xero, have the app on your phone, if you bill hourly keep draft invoices as a timesheet and submit to the client at month end, link your business bank account and your business credit card. Use Mile IQ app to track your mileage

In no particular order

Good accountant who has knowledge of your field of work if it is specialist
Keep up to date with all paperwork
Declare everything
Offset all allowances of expenditure against accounts
Don't be afraid to ask for advice

Working alone can be lonely / sometimes can make you vulnerable
You need to be a workaholic (or at least to get you going )

Know your target market and sometimes read between the lines as to where the money comes from and why
Do not undersell yourself - I use several specialists that have eye watering fees but an hour or two of their knowledge / I put can earn me / save me many times their hourly fee so what seems expensive is only relative
Do not spend hour upon hour working for nothing because the client is a friend / family
Keep work professional and family / friendship separate as much as you can

Work out costings and fees very carefully- often the hidden costs are overlooked
Don't run before you can walk , build your business slowly and carefully
Talk to other self employed people in all types of enterprises, there is always something you can learn from them

Don't be afraid to change direction , diversify , look to the future and plan ahead but be open to change

Save when you are doing well as you never know what's around the corner

If clients meet you / visit your premises a smart but modest outlook ( personal turnout / office/ car etc ) will make you look successful .

To find out pricing, contact other freelancers doing a similar role and ask for quotes to get a ballpark of the going rate.

Also you can put an advert on somewhere like peopleperhour where freelancers bid for work, you will get a vast span of prices, but you should get an idea of what a good freelancer based in the UK (for example) would charge and then benchmark that.

I think setting up a ltd company is the wisest move; I have been full time freelance for over 10 years and invoice through my company.

I’m not very good/don’t like doing admin so I literally let my accountant do everything - he sorts payroll etc and I send over my business bank statements once a year with an excel of things like petrol, parking etc which he sorts out into my end of year accounts. Accountancy was 1/3 of my degree, so while I don’t really do anything, I always mentally know where I am/roughly what tax is due etc.

Late payments can be a real problem and while now I have one long term full-time client who is never late, at the start it was a major issue. I started putting payment terms on my invoice “within 5 working days” and negotiate on a case by case basis if this was queried. If it was not adhered to without agreement, I would add to the payment terms that I would add a charge of 5% for every day. This really helped (plus not being afraid to stand up and demand your money if that is what is required). There are some utter twats out there!!

Sorry not clear - I would add additional payment terms to future invoice if I wanted to work for them again following a late payment.

A payment can’t really be late unless you state or agree how long after each invoice it is to be paid.

Wish I knew just how self motivated and organised you have to be! I went from a full time job where I was up and out in the mornings to being freelance, where I looked like a bum on the school run and worked from bed when I wanted, naps during the day etc, lunch with mates during day. I've gone done back into full time employment as i want retrain in another area and it's a total shock to my system at 2 years freelancing!

Money also - there would be times where multiple clients owed me money and other than chasing, there's not much you can do.

I've realised that in my field, freelance work won't cut it for me and actually I don't like that field much anymore - hence why I'm unfortunately back in employment.

I learnt how to budget and save very well thought!

I went freelance when my DDs were 2 and 4 months old. Started with a 3 month project, still working for the same company (and many different divisions of it) 21 years later.

Pros: freedom! you can work in your jamas! walk the dog when you want to! do all the school shit you need to! no nasty colleagues on a day to day basis

Cons: it can be lonely. you need an accountant (unless you are one). you need to be able to stop procrastinating when its time to crack on. Its not reliable financially (IME anyway). you need financial discipline to put away a %age of your earnings for tax. you will lose the ability to dress up for work!

Loads of great advice on here.

I’ve been self employed for 20 years and had plenty of ups and downs.

My list would be:

• Learn to sell
• Sell constantly
• Expect to never make as much as you think you should

-You can’t manage people, you can only manage systems

• Write your systems down
• Have a system for everything
• As the song says: “there’s only three things that sure, taxed death and trouble, this I know”
• The trouble (I fall it the stuff) is the killer and will burn your time and money.
• the stuff will be nothing to do with the actual work you do
• 10-15% of people will weasel and try EVERYTHING not to pay you.
• bin the 10-15% (the PITAs) as fast as you can... they usually also create the stuff!
• get the wrong people off the bus as fast as you can (you need people in your team to grow, but they will also create 50% of the stuff)
• Fear overhead
• Pay your accountant and your lawyer but bin them quickly once paid if they are not fit you (you’ll know if they are)
• cheapest is not always best
• buy secondhand where you can
• put 20% of your turnover away for taxes (a good accountant will get it to about 10%, but better to over provide.
• don’t draw more than you make
• you need to understand a profit and loss account and balance sheet. Take courses if you don’t
• you need the basics of tax (like the deadlines)
• do your books weekly
• you need to understand the basics of marketing
• survey your competition yourself regularly
• read everything you can about your competition
• go to at least one trade show for your industry a year
• go to at least one trade show for your major customers industry a year
• don’t bother with networking clubs
• don’t employ friends or family
• don’t socialise with your staff more than the Xmas party
• never buy a car that your customers or staff see that originally cost more than £25,000 in current money (buy what you want for the weekend but don’t flash it to anyone)
• don’t wear a Rolex to work
• don’t wear designer clothes to work
• buy a decent coffee maker and coffee and use then
• take your own lunch in every day
• walk around least 10,000 steps at least 3 days a week
• stretch for at least 20 mins a day
• eat breakfast
• drink 2 Ltrs of water everyday
• take a multi vitamin daily
• take cod liver oil daily
• take time management courses and find an approach that works for you (I like GTD)
• spend 1 hour on Sunday organising your week ahead
• as soon as you can afford it outsource as much housework as possible
• make sure you have at least 2 date nights a month with your partner
• take 6 weeks holiday a year (even if you just sit at home in your pyjamas!)

And

• don’t sit on social media at night writing lists!!

Good luck with it