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    Five financial tips to survive as a freelancer

    14 October 2019

    A growing number of us dream about charting our own course and being a bit more entrepreneurial but there’s no denying the financial risks that are involved. We’ve swallowed hook line and sinker the arguments made in favour of a gig economy workforce – one that can be called upon when needed, and discarded on the scrapheap when not.

    But with over half of the UK population now predicted to become freelancers within a decade, it may be too late to turn back the tide. So if you’re destined to join the ranks of the freelance army, here are some top financial tips for surviving the fight ahead

    1. Find a bank that works for you

    Whether you’re setting up a limited company or not, long gone are the days when you need to go cap in hand to your high street bank and wait weeks to open an account. New banks like Starling and Monzo are chasing business accounts, as are services like Tide, Countingup and Mettle, which is owned by RBS. Some of these new names offer helpful services like creating and sending invoices from your phone and simple bookkeeping, which should make it easier to stay in control of your finances.

    2. Cashflow really is king

    When starting out, it’s understandable to be just thankful for those first few clients that give you work. But if this work is likely to take a few weeks, or even months to complete, do not be scared to ask for a deposit upfront, twenty to fifty percent is not uncommon. It’s also important to make sure that the scope of your work, and key deliverables, are clearly laid out. This will help make it a lot easier to get paid.

    3. Create a steady client base

    While it’s easy to become a freelancer, being a busy and well paid freelancer isn’t quite so straight forward. In order to attract more customers, in a cost effective way, some freelancers will rely on freelancing platforms like Upwork, or even focus on buying online adverts. But by far the best medium term strategy is to build authority and expertise in your chosen field. For example, if you’re offering marketing services, speaking at events or writing articles that help to strengthen your credentials will help to set you apart from the hoi polloi.

    4. Don’t neglect your pension

    Most of us are not saving enough to retire comfortably, and in years to come, the strain of an older population on government coffers will force some pretty radical changes. So while it’s easy to put off thinking about your retirement fund, you really shouldn’t. Products like the Lifetime ISA may not be for everyone, but they could prove to be useful, especially for freelancers. Firms like Moneybox, in partnership with OakNorth Bank, have made the process to open and manage this type of account a lot easier, and the government provides a twenty five percent bonus to top-up any funds you deposit (subject to a maximum deposit of four thousand pounds per tax year).

    For those on the outside, being a freelancer can seem quite glamorous, but the truth is that there’s a lot of hard work involved to be successful. And whether you aspire to build an empire or just to eke out a living, it will pay dividends to play the long game and put in place the right building blocks to freelancing success.

    5. Think hard before embracing investors

    The business world is awash with greedy men keen to make a quick buck from your hard work. While many freelancers value mentorship, and indeed monetary investment, it really isn’t for everybody. So before you decide to seek out investors, it’s important to think long and hard about your vision and values, and to ensure that they’re aligned with those of any potential investors.

    Michael Fotis is the Founder of Smart Money People, a consumer review website for financial products and services.