In this blog, University of Birmingham’s Business Start-Up Manager, Mohammed Ali, shares some great bite-sized insights for anyone embarking on a freelancing career. Don’t forget, if you’re a current student or graduated in the last two years, then our B-Enterprising team offers some great additional support such as funding to help get you started, workshops and advice sessions.

1. Utilise the many free products and tools out there

There are so many (often free) tools now available at our fingertips which can do wonders for making life easier (and cheaper) as a freelancer. This can include free photos and graphics for our marketing tools, social media management tools, invoice generators, website content management systems, logos, and accounting tools — just search for what you need and chances are, it exists, and probably for free!

Here’s a few of my personal favourites to get you started;

 MailChimp — A slick email marketing platform that allows you to manage your contacts (GDPR compliant), create great visual e-mails, and track crucial analytics to see who is opening your emails, where and when. There are both paid and free versions available, so make sure you give it a try!

 Pixabay — Bring your marketing materials to life with a stock of free images which are royalty-free for commercial use.

 Canva — Nail you’re branding and bring your images and social media graphics to life without expensive design software or technical know-how with this simple online design tool which has thousands of templates to get you started.

Fiverr — Get access to designers, developers, copywriters, videographers, etc. for very low costs, allowing you to focus on the things that you do best.

Super tip: Just search what you  need in a search engine, and chances are it will exist, and usually for free!

2. Avoid using your home address

As a limited company, you will require a registered office address, which is what government bodies (such as Companies House and HMRC) use for official communication, notices and reminders relating to your company. This can be different from your trading address (where you do your work from). As this is public information and can be easily accessed (even if you change the address later), I’d advise you use an alternative address at all costs.

If you’re a sole trader, then this information is private, so using your home address may be better, but you may want to consider an alternative address for client/public-facing communications such as websites.

Here are some alternative options if you don’t have access to a commercial office;

• Accountants — If you’re using an accountant, they usually offer a registered office address for a fee, so it may be worth asking them if they provide this service and negotiate a price within your package.
• Virtual Offices — If you search ‘virtual offices’ online, you’ll find a number of options to set your address anywhere in the UK (including some prestigious addresses) for as little as £20 a year — but make sure you look out for the mail forwarding service so you don’t miss any important mail, such as communications from HMRC.

3. No Marketing = No income

I’ve regularly encountered three major marketing mistakes that freelancers make during their early days, which I’ll address in this blog.

· Not marketing at all — As a freelancer, you may fall into the trap of assuming that marketing is only for sales or marketing professionals, but you’ll need to wear many hats for your business. Marketing is one of the most important and can take many forms, such as a website, social media advertisements, using the local and regional media (radio, newspapers), billboards, networking, flyering, etc. The end goal is to make sure that people know that you’re there and the services that you offer, so make sure all avenues are considered and that they’re up to date. In order to do this properly, you need to understand who your audience is, what their needs are and understand how you can capture their interest.

Not doing any marketing when you’re working on a project — Even if you’re working on a current project, you need to remember that it will come to an end and you’ll need more projects lined up to ensure you continue to keep making an income, so make sure you set aside some time every day/week to market your business.

Super tip: Did you know it’s more effective (and cheaper) to keep and grow existing clients? So make sure you stay in touch so that they remember you for their next project, and don’t be afraid to ask if are any upcoming projects that you can support them with.

4. Niche is your strength, particularly in the early days

I believe this marketing mistake is so critical that I wanted to dedicate a whole section to it.

Don’t make the mistake of offering every service to everyone and anyone, as it will just make you relevant to no-one. Take a moment to think of the distinct niche audiences that are more relevant to your skillset.

For example, you may be an English/Italian translator, great, but do you also specialise in certain areas, such as translating websites, or business literature? This will make you more attractive to a defined group that will be easier to identify and target your marketing. If you specialise in different things, then perhaps consider designing two or three different identities, and position yourself better to different markets.

Don’t panic that you’re missing out on everyone else by doing this, just remember that if there are two rabbits and you try to catch both at the same time, you won’t catch either — focus on catching one of them and you have a better chance.

Be relevant to some people, rather than irrelevant to everyone — especially with the limited time and resources you’ll have available in the beginning.

5. Don’t start your prices too low

When starting out, you may be tempted to under-price yourself in order to gain clients which can be effective in some circumstances. Do this incorrectly, and it can lead to you becoming stuck in an unprofitable and vicious circle that leads to you spending more money to provide your services than your clients are paying you.

Super tip: If you have to give a discount, give a good reason for it and make it explicit and temporary — a good way to do this is to highlight the usual cost on your invoice and indicate the reason for the discount (e.g. new client offer).

6. Make sure you select the right legal structure

There is no such thing as a ‘Freelancer’ in legal terms — the two most popular are ‘Sole Traders’ or ‘Limited Companies’.

Take some time to research the pros and cons of each structure, but the main differences are tax and liability;

Liability

As a sole trader, there is no distinction between you and the business, meaning you a liable for any debts and claims against the business, putting your personal assets at risk.

As a Limited Company, you create a new equity that is separate from yourself, where the business owns assets and has its own debts, limiting the liability of the owners (in principle) to what they put into the business. This means that owners assets are protected from claims against the business, however there are some exceptions (e.g. if you fail in your legal duties to the business, or if you personally guarantee any debt, such as a loan).

Tax, Registration and Public Disclosure

When you register as a sole trader you need to complete an annual self-assessment tax return in order to calculate and pay the correct tax. HMRC will send you your 10-digit activation code known as your Unique Taxpayer Reference (UTR) and information about your responsibilities. You should receive an automatic self-assessment tax return notice following the end of the tax year. Your profits will be taxed according to your personal tax bracket and you’ll also pay class 2 and 4 National Insurance Contributions.

The registration process is quick and free, and your information is not publicly available.

As a limited company, you can be an employee of the business and pay yourself a salary from the business, which is then taxed according to your personal tax bracket. The business will pay its own tax on profits, known as corporation tax. Once this is paid, the owners are then able to receive the remaining profits (known as dividends) and will pay tax on the dividend amount, which may be more tax-efficient than taking all payments as a salary.

The limited liability of a limited company comes with increased accounting costs because you’ll need to file annual accounts (which can cost as little as £99. There is also more public visibility of company information on Companies House which shows accounts information. Registering as a limited company can be done in a few minutes and costs as little as £10.

If you’re unsure which structure you should be using, then our B-Enterprising team can help you with this.

7. Spend time with people

Lastly, freelancing can become incredibly lonely, especially if you are at home all day and don’t speak to anyone but the occasional quip to the cat! So even if you’re an introvert, try spending some time working in a coffee shop, library or a co-working space and meet your clients face to face once in a while rather than always talking on the phone. Make sure you get out and network and attend personal development events. Whatever it is, some interaction can help you feel more human and give you the boost you need to see you through the tougher periods.

There is plenty more that I could share with you, however, this blog was designed to give you a good starting point. We wish you the best of luck in your endeavors and don’t forget that the University of Birmingham’s B-Enterprising Team offer support to freelancers with funding, Freelance QuickStart workshops and advice sessions which are available to you up to two years after graduation.

The information in this article was correct at the time of writing (November 2019).