PART 1 - Freelancing, contracting or both? Moving away from permanent work as a Learning and Development Professional
As a person who does both freelance and contracting, I‘ve experienced the positives and negatives of both ways of working.
*This is a two-part blog post; in this first part we will cover freelancing in more detail. In part 2 we will explore contracting. *
So you’ve made the decision to come away from permanent work, but where do you go next? Do you take the leap into self-employment and try and make it on your own? Or do you go down the route of agency work and become a contractor?
There’s no one size fits all answer for this question. It will be dependent on what you are looking for from a job, your circumstances and your goals etc.
As a person who does both freelance and contracting, I ‘ve experienced the positives and negatives of both ways of working. So, let’s first define what it means to be a freelancer and a contractor.
(just a caveat, I am looking at this through the lens of an L&D professional, freelancing / contracting may be different for other sectors)
Freelancer
If you decide to go freelance you are declaring you are self-employed and will need to register with HMRC as such. Now this is where it gets slightly more complicated as you can register as a sole trader or a limited company. Select the plus icons to learn more about the differences between these.
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If you are a sole trader you work on your own, do not have any employees and are solely responsible for the business and are not separate legally from it. This means if you get into legal trouble for not delivering work or paying bills, it is your money that is going to be funding a lawyer.
Don’t let this put you off though! Registering as a sole trader is quick and easy with low setup costs and perfect for when you’re just starting out and unsure as to if things are going to be successful or not! There’s also less paperwork in terms of tax, which is always a win in my eyes!
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If you set up as a limited company, you are a separate entity from your business. Therefore, if you get into any legal hot water, the business is responsible for paying debts or liabilities. So it is the business getting sued and not you! As a limited company you can have multiple shareholders too and you can employ people. Limited companies do come with more paperwork, but the tax can be lower.
Phew! Google is your friend when deciding what is best to set up as, so do your research.
Anyway, back to freelancing.
Most of the time people stepping into self-employment as individuals, for example learning designers, consultants etc, will opt for sole trader, so let’s move forward based on this.
Freelancing offers you complete flexibility over how and when you work. There’s no boss to answer to and it is up to you how much or how little work you take on. The flexibility and better work life balance is one of the reasons people are drawn to self-employment and I will admit it’s a huge perk. But, it’s definitely not all skipping off for morning gym sessions and coffee dates with friends.
Let’s explore the key the things you will need to consider if you go freelance (as a sole trader):
Taxes. When that first juicy invoice hits your bank, it can be tempting to run away and have a spending spree, but don’t forget you need to pay the tax man too! Keep track of your income and taxes. I keep it simple with an Excel sheet, but there’s some great software out there such as Crunch. Or you can hire an accountant to do it for you.
Accounting. Following on from taxes, it is advised to hire an accountant. You don’t necessarily need one for the day-to-day management of your business funds, but when it comes to doing your self-assessment (the end of year tax calculation) I would highly recommend getting some help.
Marketing. Unfortunately, it is unlikely that the work will just fall into your lap, you’re going to have to put yourself out there. You will need to consider how you will attract clients; do you have a portfolio or website? What is your brand identity, how are you appearing on social media? Marketing is a huge part of freelancing and takes up a good 30% of my working week.
USP. What is your unique selling point? What is going to make you stand out from others? L&D is a very saturated market right now, so you are going to need to be clear about what services you are providing and how.
And now for a bit of honesty:
Being smart with money is crucial as a freelancer.
Freelancing can be harder work than your permanent job. In the first few months of going self-employed I worked longer hours than I ever have. I had to establish my brand voice and ensure I was putting enough work out there to be noticed. It was exhausting.
You’ve got to be prepared for ebbs and flows in your income. Being smart with money is crucial as a freelancer. Whilst you may have periods where you’re flat out and fully booked, you should also expect to see quieter months where you may not have as much work coming in. From a financial perspective you always need to be thinking ahead.
You will have to have difficult conversations. Continuing with talk of income, there will be an instance where a client pays you late and you will have to chase invoices. It can be mentally draining and a worry when a client doesn’t pay as expected. But make sure you set firm boundaries and have everything in writing! I use a simple contract for my client which outlines my terms around payment and intellectual property.
You are likely to underprice yourself at first and that’s okay! It can be hard to find role specific advice online regarding how to price your services, therefore it is likely in those early days you will massively undersell yourself. But don’t worry, we all do it. My advice would be to speak to others and be kind to yourself, remember people are not just paying for your services but your experience too.
Social media will become the bane of your life.
It may feel lonely at times. If you’ve come from a busy team, or have had lots of colleagues, it will feel a bit alien suddenly working alone. But that doesn’t mean you need to be alone! Network as much as you can, attend conferences, reach out to people on social media etc. I have formed such a lovely circle of friends who are on similar paths to mine, and we regularly meet for catch ups and to provide each other with honest feedback. They’re the best and I value them so much. If you prefer the office atmosphere, look into ‘hub’ or shared office spaces. This can be a great way to fill up your social cup.
Social media will become the bane of your life. Now social media isn’t the only way to attract clients, but I have found it the most effective. As I said previously 30% of my week is spent on marketing, this includes updating my website, writing blog posts and scheduling social media. Give yourself a voice and put yourself in front of people. Scheduling is your best friend though! I tend to allocate a couple of hours on a Sunday evening to schedule posts for the week ahead, sometimes even fortnightly if I’m feeling uber productive!
You may feel underwhelmed by the work you’re producing. Client work tends to have many factors at play which mean you won’t necessarily be producing the high spec, super innovative learning you would like. Budgets, timescales, existing assets can all impact the work you are doing. Whilst this doesn’t mean the work is lower quality, it just may not be super exciting when your client only has a budget of £3000. Engage in personal projects to strengthen your skills and keep the creative juices flowing.
You are responsible for motivating yourself. With no boss it means no development reviews or progress plans (huge positive in my eyes), however this can make it hard for you to define what your goals are and keep yourself motivated when things slow down. Try writing down your 3-month, 6-month and yearly goals and define any actions you can take to reach these. It could be really simple like ‘in 3-months I want to have my website set up’. During those slower periods, make the most of the time by identifying any skill building activities, for example attending webinars or signing up for a course.
You’re responsible for all funds. So you need xyz subscription? That’s coming out of your own pocket. You need a new laptop? Better open your wallet. Insurance needs renewing? Yep you’re funding that too. This can be a bit of a shock if you’ve come from a job where a laptop and subscriptions are provided. My advice, identify which subscriptions are a must have, i.e you couldn’t do your job without them. Utilise free trials as much as you can and stick to monthly rolling contracts. They may be a few pounds more expensive, but you can cancel them at any time. And don’t forget it can all go on business expenses!
Now enough of the truths, let’s lift it back up and explore the positives of being self-employed:
It’s immensely empowering. I felt like a true professional and grown up when I went self-employed. It was scary at first but there is such a high from adding another client to the books or nailing a piece of work.
It’s fun! Sure, it’s hard work, but honestly, I have so much fun in my working day. I love the variety of being able to switch between tasks and really choose how my working day is going to look. I feel excited to go to work and that is just such a privilege.
You’ll become much more confident in yourself and your decisions. When it’s you calling the shots, this can bring some nervousness and it can be hard to bat away the imposter syndrome. But, I’ve found I have become so much more confident in my decision making, my status as a professional and just as a person in general. It took a few months but I now have no problem validating my prices, the quality of my work and my opinions.
When you get the balance right, it will be the freest you have ever felt in a job. The work-life balance can be a bit tricky to master and as I said, in the beginning I worked long hours. But when you do get into a rhythm you will be amazed at how it impacts your stress levels and mental wellbeing. Remember, a work-life balance looks different for everyone so it’s about defining what works well for you. If you need to start at 2pm and finish at 10pm then great. Define what is important to you and allocate time for it. For me this looks like finishing up at 3PM to spend time with my kids after school.
Choosing who you work with and what you work on. There’s nothing worse than being stuck in permanent job you hate, with people who do not value you. The best thing about freelancing is that if you do come across a client that you don’t gel with, you can simply decide not to work together again. There will need to be a bit of risk versus reward approach and your decision will be based on your own boundaries and ways of working. The same applies to the work itself, if a client is proposing work that is out of your skill range or that you don’t feel comfortable doing, you can say no.
Piggy backing off this, my number one piece of advice when freelancing is…
Get comfortable with saying no.
It is going to feel immensely uncomfortable at first, especially when you’re trying to build a client base, but not saying no can be incredibly damaging. For example, you say yes and take on work above your skill level which impacts the quality. You say yes but realise you don’t have availability, leading to your stress levels increasing and the work being rushed. You say yes to that extra review cycle, even though it wasn’t on the proposal and end up out of pocket.
Actually, get comfortable with saying ‘no..but…’
Say no but add a compromise. For example, no I cannot take on this work, but I am free from October should you need any support then.
Or
There are no more review cycles for this project, but if you wish for amends to be done, we can discuss the cost and timescale for this.
Here are some of the responses I’ve received when saying no:
“Thank you so much for your honesty. Would you be able to help with xyz instead?”
“I appreciate you being honest, does this timescale work instead?”
“That’s no problem, I appreciate you being upfront. Unfortunately we need the project completing soon, but we will keep you in mind for the next one.”
Protect your professional reputation and get used to saying ‘no but’!!!
And that’s the end of part one. We’ve covered the positives and tricky parts of being a freelancer and in part two we will move on to contracting, looking at how this works and why it may be a good fit for people transitioning from permanent work.
In the final part of this blog post series, we will compare the two and discuss how you can decide which is the right path for you.
