A quiet revolution is underway in halls of residence, house shares and flatshares across Britain; a revolution that is leveraging digital technologies to put healthy sums of money in the pockets of students in towns and cities from Edinburgh to East London, and from Belfast to Brighton.
According to research from Elance 21% of UK graduates with first class honours say they have already chosen to work as a freelancer, while 29% of all graduates suggested freelancing will form part of their career strategy during the next five years.
Beyond university, data from the government’s Labour Force Survey (LFS) indicates there are now around 1.56 million freelance workers in the UK.
Are you planning to become a ‘digital revolutionary’ and join the UK’s growing army of student freelancers? Then follow these steps to thrive in Britain’s new freelance revolution.
Step 1: Brand yourself
First things first – before you can hang up your virtual shingle you need to decide what freelance services you’re going to offer your clients. What are you good at, what do you love to do…and what will others pay for? Find some overlap between the answers to those three questions and you’re in business.
After you decide what freelance services you’re going to offer, and whether you will provide them under your own name or a brand name, it’s time to create your home on the web.
You will need a website to promote and brand yourself, although it doesn’t need to be overly complicated. If you would rather not spend any money at this stage you could use Contently (for writers), Dribbble (for designers) or wordpress.com (for everyone), but in order to create a more professional impression it might be worth buying a domain name (for example, johnsmith.co.uk or technicalcopywriter.co.uk) and paying for the cheapest and most basic web hosting. The domain will usually set you back less than £10 a year, while you can host your website for as little as £1 a month. £22 a year that will be very well spent.
After you’ve bought your domain name and signed up for basic web hosting you can install a content management system, such as WordPress, on your new domain, and add a professional looking (but free) template (known as a theme). After that you can create a few pages highlighting your skills and experience, the services you offer, any references or testimonials you may have, and your contact details. You may also want to include a pricing page, assuming you’ve decided to offer fixed pricing for your freelance services (some freelancers vary their rates depending on how much they want to work for a particular client, how badly they need the work right now etc).
Congratulations, you now have a brand and a digital presence – time to let the authorities know you’re in business.
Step 2: Register yourself
The boring bit, but it’s a necessary evil.
All freelancers need to register as self-employed with HMRC, unless they decide to set up a limited company in which case they will need to register the company with Companies House. If you haven’t decided whether you should go down the self-employed or limited company route, this blog post might help with that decision.
If you set up a limited company you will need to sign up for a business bank account. If you’ve registered as self-employed then you can either set up a business account or use your student bank account to handle your freelance income.
If you do decide to use your existing bank account it’s important to plan how you will track and record your business finances and distinguish them from your personal finances (Accounting software? Excel spreadsheet? Pen and paper?). Get those processes in place from the beginning to avoid any headaches later.
Step 3: Market yourself
Now comes the hard part – finding clients. Many freelancers agree that marketing and business development could be a full time job in and of itself, but it’s important to dedicate enough time to finding and winning new clients, as well as earning repeat business from your existing clients.
Many new freelancers begin by pitching for work on some of the big freelancing marketplaces, such as Freelancer.co.uk, PeoplePerHour, Guru.com and UpWork. It’s also worth checking out Talent Cupboard, a relatively new freelance marketplace specifically designed for student freelancers.
For more ideas on how student freelancers can find new freelance gigs check out ‘The rise of the student freelancer’.
Step 4: Excel yourself
In the freelance world reputation is everything. Consistently delivering your work on time, on brief and to an exceptionally high standard will help you earn repeat business from your existing clients. In addition, over delivering could also help you win new clients through word of mouth marketing, which will often become a freelancer’s best source of new business.
There are a ton of tools that can help you excel as a freelancer, and many of them are free. Check out this guide to free tools for freelancers to learn more.
Step 5: Pay yourself
If you use a freelance marketplace the platform will usually take care of the finances, ensuring you get paid after the client approves the work. However, for other freelance gigs you will have to invoice your clients yourself.
It’s important to ensure your invoice outlines the agreed payment terms (eg “payment due in full within 14 days”). If your client fails to pay by the agreed date chase them politely but persistently until you receive payment. Also, don’t begin work on a new project for that particular client until payment has been received.
Step 6: Save yourself
This is one step that many new freelancers stumble over, but it’s important. You should set aside a portion of your freelance income each and every month so that you aren’t hit with a tax bill you can’t afford come January 31st. We recommend setting aside 30% of your freelance income, and moving this money to a separate savings account or instant access ISA so that you don’t dip into those funds.
Step 7: Record yourself
It’s important that you keep accurate records, which you will rely on heavily when you come to complete your annual self-assessment tax return. Accurate details of your income and overheads, and receipts for any allowable expenses, will also be required should you ever get hit with a tax inspection from HMRC.
Step 7: Tax yourself
Freelancers are self-employed sole traders, and as such they have an obligation to file an annual self-assessment tax return and pay any income tax they may owe. The online self-assessment must be filed by January 31st each year, with any corresponding income tax usually due by the same date.
In addition to income tax, freelancers also have to pay Class 2 National Insurance contributions, which are due in April each year. However, if your annual income falls below a certain threshold you may be exempt from paying Class 2 NIC – you can find out more on the gov.uk website.
Getting ahead and getting paid
While the paperwork, record keeping and annual tax returns may feel more burdensome than the life of an employee on the Pay as You Earn (PAYE) system, freelancing is often worth the extra effort. There’s the obvious rewards, like greater flexibility, autonomy, responsibility and opportunities for learning, but beyond that freelancers can also gain work experience that is often more impressive to future employers than working in bars or restaurants.
At a time when many students and new graduates are taking unpaid internships to add some ‘real’ work experience to their CVs, freelancers are already seven steps ahead – and getting paid for it!