We have all fantasised about running our own business or spending our days freelancing for an exciting and varied range of clients, commanding great rates with heaps of work and projects to choose from. However, the reality is often be very different from how we imagine it will be and if you want to make a solid career as a freelancer, there are three key things you need to be aware of to ensure you achieve a successful and sustainable career:
1. Income Stability and Budgeting:
Freelancing can provide flexibility and autonomy, but it also comes with income variability. Your earnings might fluctuate from month to month, making it crucial to plan and budget accordingly. During busy periods, you may have a surplus of income, but slower times could lead to leaner months. It's essential to have a financial safety net, manage your expenses wisely, and set aside savings for periods of lower income.
2. Taxes, Superannuation and Legal Obligations:
As a freelancer, you are essentially running your own business, which means you'll be responsible for handling your taxes and complying with relevant legal requirements. This includes understanding self-employment tax rates, keeping track of business expenses, and making tax and superannuation payments. Always use an accountant or tax professional to ensure you're meeting all legal obligations and taking advantage of deductions available to freelancers.
3. Client Management and Contracts:
Building and maintaining positive client relationships is vital for freelancers. Clearly define project scope, deliverables, deadlines, and payment terms in written contracts to avoid misunderstandings. Additionally, ensure you have a system in place for invoicing and timely payment collection. While most clients are reliable, occasional late payments or non-payment can occur, so it's important to have procedures for handling such situations while protecting your rights as a freelancer.
When the work is flowing and the payments are coming in, freelancing can be both rewarding and lucrative. Having backup plans and finances in place to push through the leaner times will ensure you have prepared a solid base on which to grow a successful freelancing career.