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It is estimated that in the last 10 years freelancing has increased by up to 82%, and that we now have around 1.6 million freelancers. While the freelance market may be buoyant, deciding to become a freelancer is a decision that shouldn’t be taken lightly. So before you take the plunge, ask yourself these questions first…

Are your skills in demand – and what are they worth?

However motivated you are, and however much you desire the freelance life, if your skills aren’t needed then it will be tricky to maintain a healthy bank balance. Thoroughly research the supply and demand for your skills to ensure you’re not going into a stagnant or saturated market. You will also need to find out the going rate for your skills and bear in mind that as a new entrant into the freelancing world, developing and maintaining your reputation will be closely linked to your earning potential.

Do you have the drive?

Without the energy and drive to motivate yourself and organise your workload, freelancing will be a car crash waiting to happen! You will need to have self-discipline to juggle multiple projects whilst also performing all the other tasks that being a freelancer involves such as, sales, marketing, accounting and general admin. Doing all of this can mean you’re at risk of getting swamped.

The key is to have a good work life balance, especially if you’re doing something creative. All work and no play isn’t good for anyone.

Have you got any funds to fall back on?

Just like a business has overheads so do you, most notably your mortgage or rent and food. So setting some money aside as a buffer before making the transition to freelance working is a good idea. Moving from a steady income to the troughs and peaks of freelancing will no doubt impact on your finances. Having a buffer will help you to cope with this uncertainty and hold out until your work becomes more stable, without feeling you’re under imminent threat of losing it all.

Have you tried testing the water?

Testing the water is a great way to minimise the risk and see if you can make the lifestyle work. Rather than opting for an abrupt severance from the shackles of a 9-5 job, try taking on some small freelance projects in your spare time and see how it works for you. This can provide an organic transition to freelancing and give you a good idea of how marketable your skills are.

Final Thoughts

There are many great advantages to working as a freelancer; including job satisfaction, flexible working and being your own boss. But making the move from your financially secure job is a big move. By asking yourself the questions above, you’ll be better prepared to make your decision.

 

We have an online accounting service made for freelancers and contractors, get all the details here.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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