Going freelance: Part 1: Starting up

Is the grass greener on the freelance side? I couldn't resist finding out and sharing with you my experiences of taking contract work over a permanent job.

Deciding to go freelance

My first taste of freelancing came to me whilst interning in London. My boss had mentioned a website to me called studentgems.com where small businesses could find students to do little jobs for them for a fee. I won my first project designing a lock and key party leaflet (true story) and continued using the site until I graduated.

When I started a full time job I attempted to do some freelancing in the evenings but to me it just was just too much so I gave it up. Two and a half years later though, I decided to quit my job and travel to Australia via South America.

Sydney is a fantastic city for building up your portfolio especially as it's easy to get a visa that will let you work for one year (or two if you'll work on a farm for three months). There is one restriction however, you can only work for the same employer for a maximum of 6 months...so you can't really get a permanent job. So I thought I'd make the switch and try freelancing.

First experiences of freelancing

Sydney is quite a seasonal city so December was probably the worst time of year that I could have arrived. The market was very quiet but luckily I picked up a freelance project from the UK and then a couple of days in an ad agency. This was my first taste of a low season and it gave me a feeling of vulnerability. Perseverance is key when the market goes quiet.

When I landed a 3 month project it was such a relief. However, when the project's budget was cut after 6 weeks, so was I. I panicked for an afternoon and then got back on the hunt the next day. That was when I felt the mad rush of the UX design market. It was now in full swing and I could actually choose the contract that suited me.

Probably the biggest difference I've felt between perm and freelance roles is the relationship you have with your colleagues. The sense of being part of the team can feel much stronger in a permanent role. So if you manage to land a contract where you feel like you're truly part of the team then I think you've hit the jackpot.

Looking for work in London

I learnt the hard way that being in touch with too many recruiters gets very confusing. So I decided to pick 3 agencies and to stick with them. I spoke to some friends who were freelancing and contacted their top 3 recruiters.

When you are a contractor, you have to talk about money. One of the first questions you get asked is "What's your day rate?" I just had a look at some job ads to get a feel for the market rate, but it's up to you.

Things can move both very fast and very slow when job hunting, and so I recommned trying to keep your own momentum even when it's slow, and then take advantage of when the market picks up speed.

Starting Steph Burningham Ltd

In Australia I had it easy, I was essentially an employee of a recruitment agency. However, it dawned on me that to work as a contractor in England, I had to pick one of two options:

Limited or Umbrella?

  Own limited company Join an umbrella company
Employment status Self-employed Employed
Taxes Lower if you plan Normal employee tax
Fees £100/month accountancy + £100 set up fee (approx) £100/month (approx)
Cost-effectiveness Cheaper long-term Cheaper short-term
Claimable expenses Wide range Small range
Admin Submitting spreadsheets to your accountant, managing your company bank account Submitting timesheets to your umbrella company
Speed of set-up Around 3 weeks Same day
Getting paid Client pays your invoice Client pays umbrella company, then they pay your invoice

Setting up a limited company

Of the two options, I decided to set up my own limited company. The biggest deciding factor me was that a friend had recommended an accountant to me, whereas I hadn't been recommended an umbrella company. My opinion was that either way, I wanted to be comfortable with whoever would be involved in my finances.

My first move was to call the accountant (slightly frantically as I was going to start working in two day's time) and explain my situation. They gave me the number of a company that could help me form my limited company, I filled out their form and it was set up and registered with Companies House that afternoon.

Meeting my new accountant

Armed with a company number, I prepared to meet my new accountant in person, the next day. I gathered my IDs and wrote a list of questions, half of which weren't relevant to accountancy but I was just going to ask them anyway!

My outing to the accountancy firm was definitely a bit surreal, as setting up my own company started to become a reality. Questions like "What is your expected annual turnover?", "What salary are you planning to pay yourself?" and "What expenses will you have?" made me realise how much I had to learn. I'm not shy of a challenge though so along with my tiny bit of experience filling out a self-assessed tax return, I felt like I was still up for trying this limited company thing.

Getting a bank account

I had been warned that getting a business bank account could take a few weeks so I checked with my recruiter if I could start working without bank details, and luckily I could. So I went off to work and called up the bank on my lunch break. I don't know why but I wasn't expecting so many questions. "Where do you expect to get your sales from?" sounded very strange in the context of being a freelance designer. I arranged a time with my new bank manager to visit the branch and sign a wad of forms and then awaited my bank details.

Let's see how it goes...

So far it has been an interesting couple of weeks. I've already learnt a lot but feel like there's plenty more to discover!

See all of my thoughts