Be your own boss
18 October 2013
What does it take to start up?
There are a few things you need to think about before you embark on freelance or contract work. The reality of freelance work means that you should pay attention to the following: a simple Business Plan and Project Management Schedule that outlines your objectives, scheduled work time, tasks, skills development, financial goals and deadlines will help you get the wheels rolling. Once this foundation is set, you will be able to create and reach effective goals for your new self-employment venture. What is your objective? Do you plan to work as a full-time freelance worker or are you merely looking to supplement your current income by working part-time as and when the opportunity arises? Making this distinction is important, as you need to know how much time you will dedicate to your freelance work. This, in turn, will influence the amount of contracts you are able to accept.
Schedule your work time to fit in with your normal commitments and time constraints. For the sake of an example – let’s say you wish to spend 20 hours of your week as a freelance worker; you will then set up a calendar and block off the times you will use to do this work. Be realistic and consider general activities like fetching children from school, shopping, going to the gym, etc. that occupy your time. Break up your work goals into monthly, do-able projects. Decide what type of freelance work you want to do. Now that you have an objective and allocated the time to work on it, what kind of work will you pursue? Typically this will depend on your skills reservoir, which could mean that you either focus on a specialty or work within several different markets. You may be competent to work as a Waitron at a restaurant over weekends, take on freelance bookkeeping at month’s end, or step in as school photographer at sport events or take class photos and for the Matric farewell. However, working in one focused area allows you to continuously develop related skills which gives you the advantage of being accepted as an expert, and that’s always a plus. However, you may choose to divide your time between general assignments and a specialty that allows you a greater flexibility of job options. In this day and age it pays to be multi-skilled!
Next, create financial goals: as with any business venture, even being self-employment, there are financial goals and start-up issues you need to consider when creating your business plan or Project Management schedule. Again, use the 20 hour part-time freelancer as an example. Find out what the going rate is for contract workers in your field of work and how much your experience and expertise warrants the remuneration. If you are fairly new at the particular job, then during the first six-month period you may spend half of those 20 hours learning on-the-job, in which case it might make more sense to project 10 hours of payable work per week. Of course, as you become more skilled at the relevant tasks needed to perform a sterling job the financial reward ratio is brought into balance. The best way to achieve your financial goal is to consider how much you would realistically like to earn in a year. If you don’t have a number in mind then try this formula. Say for example you earn R84 per hour working 10 hours per week, then multiply 10 times R84. This is about R3, 360 per month. For your first year as a freelance worker you can expect to make about R40, 320 – not too bad for just 20 hours of work per week. Remember that at the end of your first six months it would be wise to re-evaluate these numbers.
When should a person consider freelancing?
While one incentive is to supplement income another viable motivation is to utilize the opportunity to explore new career avenues by ‘testing the waters’ as a freelance worker, which also directly contributes to multi-skills development. This is also a practical way to build your résumé to advance your career. Go after what you have experience in or would like to do; just search for the right situation so that you maintain control over your schedule.
Is it advisable to work as a freelancer?
Working as a freelancer could mean undertaking commissions and small blocks of work from a variety of employers, making a living (or a partial living) either independently or within a group. The route to successful self-employment requires a great deal of motivation and self-discipline. You need to be committed, self-reliant and have plenty of self-belief; and dogged persistence. Even if you have a solid and well-considered business plan/project management schedule there are no guarantees that everything will go as planned and you must be prepared to weather lean times. Finally, you need to be willing and able to work hard. It takes considerable effort to establish a sound reputation and you may have to put in long hours in the early stages. Ask yourself the following questions: Have I built up any contacts in this particular industry – including establishments where I can offer my freelance services? If not, how will I go about achieving this? Do I have a clear idea of what type of work I want to do? Have I researched the market? Make sure you offer skills and expertise that people will pay for! Getting to know all you can about the company you want to work for will guide you when making suggestions of how your input can improve their operations.
Is there more job satisfaction when one works under these circumstances?
When it comes to job satisfaction, freelance and contract workers are some of the happiest people in the workforce. Freelancers typically have a very flexible work schedule, working independently and choosing what projects they wish to take on. Over the past five years, the freelance, contract and part-time industries have grown exponentially, and the employment forecasts through 2013 and beyond predict similar trends. However, to ensure that your services are in demand it is imperative that you are thoroughly skilled in your area of work and that your input consistently exceeds your employer’s expectations. It is also important to maintain a firm yet friendly and cooperative demeanour with fellow workers and to contribute to the overall efficiency of the company. Make a special effort to embrace every opportunity to learn additional skills that will enhance your capabilities as a valued contract worker. Many companies that run short-term projects or campaigns find it more financially beneficial to rather employ qualified ad- hoc staff for the duration of the project than to take on permanent employees that are under-utilized but nonetheless still draw a monthly salary. The most popular freelance fields include writers and editors, computer software engineers, financial analysts and personal financial advisors, designers (in every area from industrial or medical equipment design to clothing and textiles, to web sites, and merchandise displays, and more). Other common freelance fields include healthcare, IT and tech, sales and marketing, training and development, Search Engine Marketing (SEM), Search Engine Optimization (SEO), Social Network Marketing, commercial construction and even executive and management positions.
Can one work as a freelancer and derive some pride from it?
We all derive pride from a job well done. I’m proud to be a writer, editor and a publisher. I can confidently show people examples of the type of work I’ve done and make suggestions of how I am able to assist them in terms of my editorial knowledge and experience. All the money that I’ve earned over many years I have delivered quality work in return. The same holds true for most people who work to earn.
What kind of a person should embark on this way of working?
A freelancer or contract worker – apart from being thoroughly skilled in the type of work required – must also be self-disciplined – a self-starter able to plan ahead to ensure that tasks are carried out correctly and delivered on deadline; and be able to work with equal ease whether independently or within a team. The freelancer must nurture a desire to continuously improve their skills and knowledge to remain competitive and in demand. A wealth of information is available to persons who are keen to develop new interests, including books, magazines, journals, and the Internet. A public library is a powerhouse of information – and it’s free! Identify opportunities to attend courses and talks presented by experts in their field. See yourself as a valuable problem-solver who can meet the needs of those who hire your services. However, get ready to take on many more roles than you probably did as an employee. In addition to the actual service you provide, you also need to market yourself (if you are confident of your abilities your attitude will exude a self-assured professionalism), set fair prices (but remember to set your prices high enough so that you can put money aside for income tax payments, save a portion of your earnings in an interest-generating savings account to rely on during lean months and to buy your own health and disability insurance. It’s vital to manage your personal budget since you’re likely to have several contracts one month that yield a generous income and none the next.
Freelancers don’t qualify for unemployment benefits, workers’ compensation, or paid holiday or vacation time and must therefore cover those costs on their own; taking time off for a vacation or being sick means no pay for that period). Draft a written statement of employment conditions, duties and payment; collect fees and letters of recommendation from satisfied customers and stay current in your field of expertise. Enrol for refresher courses to remain competitive; keep your CV updated. A very important point to remember is to dress appropriately when dealing with employers and the public in general; if you are working as a freelance photographer then denims, t-shirt and sport shoes are acceptable, but if you are representing a company as a marketer it would be appropriate to choose smart business attire. Give yourself time to make contacts and become known.
Is the money any good?
Writing for a living, particularly on a freelance basis, is often regarded as uncertain and low paying. Yet, there are many writing jobs that one can pursue provided one persists in promoting one’s skills to organizations, publications and online entrepreneurs and e-publishers. Writing copy for Annual Reports, Conference Brochures and Web content are good examples of once-off work-for-hire writing that could pay a tidy income. Bear in mind though that this sort of freelance writing generally entails selling all rights to your work and settling for no byline or allowing someone else’s byline to appear on your work. This can be tough for some writers, but those who are willing will find lots of work. Start by identifying a niche market for the type of subject you enjoy writing about. For instance, your knowledge of health care will be well utilized when preparing a brochure to promote patient education; topics include HIV/AIDS, dental hygiene, childhood allergies, and so forth. There are numerous hospitals and clinics throughout Southern Africa, as well as new medical aid companies that would greatly benefit from a communication product to inform patients of services and treatment options.
To make the communication product even more consumer-friendly, the editorial copy could be translated into the relevant languages prevalent in the region. Just focusing on the wellness industry, you could also write for private gyms, spas, insurance agents, home health-care providers, medical supply houses, health food stores, pharmaceutical firms and dental and optical professionals who should be encouraged to produce a communication product to educate their customer base. Build on your information data-base so that you can revamp existing research material to write for other markets as well, such as press releases, interviews, advertorials and feature articles for publication in newspapers, trade magazines, web sites, newsletters and advertising literature. Eventually you will become known as an authority in your chosen field, which means regular and ongoing writing assignments. It is however important that you seek out credentials in your niche by reading about the latest developments published in books and journals as well as articles posted online; take short courses to remain familiar with the jargon and new developments or volunteer to do community service such as helping gather data for a research project or visiting organizations that specialize in the particular field; tThis way you set yourself up with an ongoing stream of writing work. Besides the growing wellness industry, other niche markets you might want to develop include sport, retail, wholesale, import/export, education, travel, agriculture, transport, youth employment, and poverty alleviation.
One of the most important questions you’ll face as a freelancer or contract worker is how much to charge for your work. Too high, and you could price yourself out of business; too low, and you’re devaluing your work. This clearly requires some thought. The way to maximize your earning potential is to research the market in relation to the skills required. Usually a scale of remuneration forms part of an advertisement for a position, which gives you some idea of what you can ask for in relation to your experience and expertise. As a freelancer or contract worker you will be building your CV with every contract you conclude. Remember to ask for a letter of recommendation or work audit from employers. It takes time to build a reputation with employers but once you’ve demonstrated your worth, it becomes easier to negotiate future jobs. Most companies have fixed rates for contract work, generally based on work per project. The income from freelance work can be exceptional; of course it depends on the type of work, your skills and expertise and time duration of the contract.
Are freelancers taxed and if so is it done any differently than for formal employees?
As a self-employed person you will need to pay income tax assessed from money earned during the year of assessment. Speak to a consultant at your local SARS office.
Can a person acquire wealth by working as a freelancer and therefore become able to provide for their family?
Many freelancers are fulfilling their dreams by working on their own. Being your own boss not only means having a flexible schedule, it also means you can choose whom you want to work for and at what remuneration. However, working for yourself also means that you usually have to continually market yourself. When you conclude one freelance assignment you must be ready to move straight onto the next one if you want to earn a steady income. Although, to have a flexible schedule may mean that you work 100 hours one week and 10 the next. While some workers love the constant challenge of self-marketing, many find the constant networking, the flexibility, and the connection with many different clients stressful. Not every door you knock on will open for you. It’s simply a matter of making yourself known to prospective employers, even if they don’t need your services at the time of applying. Choose your employers carefully – focus on those companies that need extra staff over the busy holiday period, or month-end or those businesses that undertake regular promotional campaigns. Many freelancers find that a written contract is their best protection if something goes wrong.
Where does the law stand with freelancing regarding basic conditions of employment, seeing that a freelancer is not really formally employed?
The technical differences between being employed and self-employed basically affect income tax and legal rights. Dealing with the tax point first, an employee usually has Pay-As-You-Earn (PAYE) contributions deducted at the source but if you’re self-employed, you’re normally responsible for paying your own tax direct to the Inland Revenue Services. And, if your turnover exceeds certain limits, you’ll also have to register for Value Added Tax (VAT). Looking at the legal side – if you’re an employee, you make a contract with your employer. You have a number of legal rights such as in unfair dismissal and redundancy, maternity leave benefits and notice payment.
You’d probably call yourself a freelancer but in practice it’s the same as being self-employed; essentially you are your own boss. There is no ‘legal’ definition of a freelancer – it’s basically just a type of self-employment and tends to refer to the provision of services to various people or organisations. As a freelancer you don’t have all the legal protection given to the employed. However, a lot of recent legislation refers to ‘workers’ rather than employees, and this could work in your favour. A worker basically means anyone who is not in business on their own account. So, although the legislation won’t cover you if you’re setting up an independent business, it could well apply if you’re in freelance-type self-employment (depending on your contracting terms) – and it does give you protection in terms of working hours and under the working time and minimum wage legislation.
Are freelancers more exposed to exploitation?
Freelancers might be obliged to adjust their rates to get the job but this should not be seen as exploitation by an employer; the worker is under no obligation to accept the wages offered if he or she believes it to be too low. However, freelancers are often vulnerable to accepting jobs from employers who have conflicting work ethics than oneself. To get your first job, consider taking any fee you can get. Announce your normal rate, but be prepared to compromise. For instance, say that your rate is R30/hour. Your prospect offers R15/hour. What should you do? Take the deal, but build in a raise: “I’ll do it for R15/hour but if you like my work, I want R20 (or R25 or R30) an hour after 30 days.” You can ask for a limited raise at any time. Most prospects will readily accept your offer, planning to drop you after 30 days. But if you do quality work—correct, complete, and on time—they will never let you go. Good reliable help is always in demand.
Is there an increase or a decrease of freelancers in the job market?
I believe that there has been a marked increase in workers undertaking freelance work. Today there are more opportunities and fewer barriers and restrictions; therefore more people are using their talents to explore diverse fields to earn money, albeit self-employment.
Would you recommend freelance as a way out for disgruntled unemployed graduates?
Absolutely! Not only is self-employment an effective route toward building a strong résumé it is also a sensible way to gain practical experience in areas where the individual can further explore his or her talents and interests.
By Theresa Lutge-Smith
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