Is Being a Freelance Contractor Right…
Choosing to be a freelance contractor can be a rewarding experience but it does come with a few pitfalls that are worth considering before you make the leap. In this article I hope to highlight 3 key areas that you may want to consider before making the plunge.
1. Income Stability: Working as a freelance consultant can be financially rewarding but contract work tends to flow in peaks and valleys based on market conditions. An important, question to ask is how comfortable you are with having periods of being without work and not earning. Some people cherish this opportunity for extra time while others find this panic striking. If being without work causes you concern, consider setting aside 3 – 6 months of living expenses in case you find yourself in this situation.
2. Travel: Unless you live in concentrated areas like London, being a freelance contractor involves traveling to another city. If your lucky, your new contract will be within commuting distance. Unfortunately, having to live and work far away from home is a real possibility. Before you take the step, understand how important working close to home is ? The impact this will have on family and your social life. Although not commonplace, some organizations will allow freelance contractors to work from a location closer to home a few days a week. You will be best placed to know if this is something negotiated early in the contract or once you’ve had a chance to settle in.
3. Administration: In addition to delivering projects for your clients, freelance contract comes with its share of paper work Most clients expect their freelance contractors to register themselves as Limited Companies to offset some of the companies risks. This will require you to submit quarterly VAT (if registered), PAYE, and annual company accounts. Although these are fairly straight forward, neglecting these could have legal and financial implications for your business. If doing administrative work like filling out timesheets, tracking expenses, invoicing clients and filing regular paperwork in additional to your client workload is unattractive. Paying your accountant to take on a more of the work-load maybe a worthwhile investment.
As always each person’s experience is unique and some of the pitfalls discussed may not be relevant. Hopefully, this article has given you some food for thought as you progress in your journey of being a freelance contractor.