How to start being freelance?

[apickledsausage]

Long story short my department was made redundant. Since then, I've been searching unsuccessfully for a new job. It's now been 3 months with only 2 invitations to interview out of over 30 applications so far, and I know the job market is dire, especially for those at my career level - not entry level for many years but not at C-suite/executive level either.

Having been in-house for my entire career (more than 10 years in my expertise, 7 in one specific sector), I am looking at going freelance as an option if nothing materialises from the never-ending job search. It would also help with flexibility that might potentially be very useful for my current personal affairs.

I don't know a thing about going freelance though! Would appreciate tips, especially from those who made the transition from in-house to freelance. How did you start? Did you have to register yourself in some way to be able to invoice? Did you find an invoice template to look professional? How did you decide on your day rate?

I have an idea already of where, how and with whom I'd market my skills as I know my sector well, but if I do go down this path I'd like to make sure I've got all my ducks in a row as a legitimate professional before mapping that out further.

Thank you in advance!

You register with HMRC as a sole trader (assuming that's the route you're going). If you are with a professional body you make sure all insurances and professional memberships previously covered by your employer are taken care of by you so you can provide those details to clients. Is that the sort of thing you mean?

I hadn't even thought about insurance, so yes, exactly this kind of thing that I mean. I knew I'd have to set myself up as a sole trader, but would I need to be VAT registered? I did already sort out my professional memberships thankfully. Thanks so much!

What do you do?

I work freelance after having been employed for years.

If there is any risk of being sued for the type of service provided, you should think about setting up a limited company to limit your liability. If there is no prospect of clients suing then there is no need to set up a limited company but you may think that a company looks more professional for marketing to prospective clients.

Depending on what you plan to do you can keep things simple. I do not even operate a separate business account. I keep a record of all invoices submitted and all expenses and overheads ( such as your insurance costs ) in a word document but there are programmes available. I then get an accountant to prepare my tax return each year - though it is simple enough for me to complete on my own.

Remember that as a self employed person you will need to make a payment on account in July each year so you may need to budget for this and have a separate tax account if you are the sort of person who will be spending all the money you make as it comes in.

I used an online template for invoices so they look professional but the key is to have terms of business so clients know you will invoice monthly and your terms are payment within X days. Will you need to pay out for expenses? If so, do you need to ask for an up front payment to cover that expense or do you want to take a booking fee?

ChatGPT may do a good draft of some terms of business for you to consider.

Does your current employer use freelancers? If so, you may be able to look at their terms for inspiration.

One thing to spend time on is your billing structure as you need to factor in all the hidden time spent on conversations to get new work etc when working out your planned hourly rate or billing structure.

I have now been freelance for over 7 years and wish I had done it 20 plus years ago. Getting the first client was hard but now I am in the lucky position of choosing clients but in the early days I made the mistake of doing any work I was offered rather than being selective.

If you still have a mortgage then be aware that if you want to move house or refinance it may be harder if you do not have full accounts etc but HMRC do not require it for tax purposes if you are a small sole trader.

If this is all completely new to you then it may be worth seeing if your bank, the chamber of commerce or other local organisation offers a free or cheap consultancy service or mentoring advice.

Depends on your turnover (turnover, not profit, so this will be much more relevant for some professions compared to others). I'm just a sole trader, as I don't have investments in the business so no risk of me going bust and personal assets being at risk. If that's the case, register as a limited company.

This was all very helpful, thank you so much.

Communications and engagement, most experience in healthcare.