Freelancing: Two Years On

I was talking to a friend who is also a web developer, who earlier this year jumped into freelancing. He mentioned he was going to write a blog post and asked if I had written about my experiences freelancing. I said I hadn’t and he suggested I should as he’d like to read it, so without further ado here it is for any one else who is interested too.

Leaving full-time employment

I had worked as a web developer for various agencies in the region for a few years. Going freelance was a decision I had tussled with for maybe a year or so before I actually did it, but my main concern was having enough work to sustain freelancing on a full time basis.

Then one day, I lost my job.

It was then I decided I could either look for another full time job, or take the opportunity to give freelancing a shot, as otherwise if I settled in another job I wouldn’t build it the courage to do so.

In hindsight, I’m glad I did. I’m happier, not bound to 9–5 working hours, and get an immense variety of work. In fact, I’ve had the privilidge of directly working with clients such as BAMMA and Ubisoft Reflections. I had worked on prolific projects in the past, but as a faceless entity within an organisation.

Clients

Thankfully I’ve not really had to advertise in the two years I’ve been freelancing. Word of mouth is the most powerful form of advertising, and when I broke the news I was going freelance and immediately had a few enquiries. With the ball rolling I’ve had enough enquiries through Twitter and email to keep myself busy. Maintaining an active profile on a real-time social networking website like Twitter is vital, as well as other social networks such as LinkedIn.

Cheap plug: you can follow me on Twitter at @martinbean if you don’t already.

Money

There’s a saying that only two things are certain in life: death and taxes. Thankfully I’ve not become acquainted with the former, but have become more than familiar with the latter.

It’s a great feeling doing your end-of-year accounts and seeing you’ve had a good year. However, that feeling soon subsides when you see how much tax you then owe.

The advice I’d give is: always save a portion of each invoice payment (a third is a good amount), and find yourself a good accountant (which is what any self-employed person will tell you). There are lots of things you can write off a tax-deductable. Things like magazine subscriptions, hosting and domain name payments, and portions of your rent and utility bills if you work from home can all be taken of the amount you pay tax on.

Sole trader vs. Limited company

I also had to make the decision of setting up as a sole trader or a limited company when going freelance. I choose sole trader for various reasons.

Running a limited company involves more paperwork. I’d also be the only person in the “company” but limited companies require a minimum of two directors (and a secretary). I’d have to name another person as part of the company just to set it up, which just seemed like hassle. Michael Peacock informs me that the rules on limited companies has changed, and that only one director is needed.

Finances also work differently. As a sole trader, I am the company so my finances are the company’s and vice versa. In a limited company, I’d be an employee and would have to take money as dividends. As I rent my apartment, being a sole trader means I can continue paying my rent as normal without having to take money from the company every month to pay my rent (and bills).

Note: I’ve since moved to trading under a limited company (MCB Web Design Ltd).

Going back to full-time employment

Will I go back to full-time employment? It would have to be a really interesting position. As I say, I’m happy being freelance and earning more than when I was in full-time employment, but can always be tempted by the right offer. For example, one thing I’d like to do more of is travel.

Final thoughts

I’m not sure how to end this post, but if you’ve recently went freelance I’d like to know your experiences too. And if you’re thinking about going freelance, then all I can suggest is go for it!