#8 Thinking of going freelance? Here are 9 things you need to think about (and 3 of my mistakes!) part 3

Is it impossible for a woman to become a freelancer?

No, it isn’t. But I would encourage women who want to become freelancers to take it more seriously than that. Don’t become a freelancer, become a business. Set up a proper Limited company and employ yourself as an employee.

There are costs to doing it this way, but you’ll set yourself up to think about the bigger picture much more successfully.

Here’s what you need to do in order to go about this:

  1. You need to register at Companies house (you can do it yourself for £50 or an accountant or lawyer can do this for you for about £150)
  2. You will need to set up a bank account for the company (you will need to provide a business plan to your bank of choice showing them how your business will work)
  3. You need to get an accountant (for a limited company, a decent accountant will start at around £1200 per year)
  4. You will need to set up payroll (your accountant can usually do this for an extra charge or teach you how to do it)
  5. You will need to set up your pension scheme (which isn’t required if you are a director of a company but highly advised! Again, something your accountant can help you with)
  6. You will need to consider hiring a bookkeeper to reconcile the books on a weekly or monthly basis otherwise, you have to do it yourself which is fine – but don’t be that person who says they will do it and then doesn’t do it until taxes are due – you’ll be in serious pain. I promise.

You’ll also need to make sure you have the following documents in place:

  1. Price Sheet / Rate Sheet – A sheet with your prices and services on them.
  2. Contract Assignment – do not do any work with any client without a clearly written and agreed upon contract assignment. Meaning, you need to have a clear expectations for you and your client that outlines exactly what service you are delivering, how you will handle additional requests and scope creep.
  3. Contracts – do not do any work with any client without a signed contract (everyone does it BUT you need to STOP doing that!)

Having set up 3 businesses myself and seen many women try and do the same, I’ve made so many mistakes along these lines.

Here are just a few of my mistakes:

I didn’t do a written contract and contract assignment – which meant that if the customer or myself wasn’t happy at any point, we didn’t have a document to refer back to as to how we were going to handle contract disputes. For example, one thing that happens a LOT when freelancing is something called SCOPE CREEP. A client will start out by saying can you do a, b, c and you say ‘yes!’ and then they come back and add x, y, z and you don’t have the confidence to say to them… that isn’t part of the contract – why? because, you don’t have a contract!

I didn’t set up a bank account for my business – in my very first business, I honestly didn’t expect it to be a success. I figured some money would come in and some money would go out but it would be so small that the tax man wouldn’t care. The tax man always cares. I cannot tell you the pain and anguish and late nights I spent going through an entire years worth of income and expenditure in my personal bank account with a fine tooth comb in order to be able to tell the tax man exactly how much I earned and how much I spent. This was one of the dumbest things I did as a newbie business owner.

I didn’t actually realise how much work freelancing takes in ADDITION to actually doing the work. When you are freelancing – you are entirely responsible for your contracts, there are really two types of contracts as a freelancer – the contracts which are steady and long term and the contracts which are short term.

I hope you have found this useful. You might also want to catch up on part 1 and part 2 if you haven’t already. In the first part, I talked about why women should consider returning to part-time salaried work vs freelancing and in the second part, I discussed the benefits of part-time salaried work.

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Want to know what to charge?

If you do decide that freelancing is the way to go, I know it is tricky to try and do the calculations yourself when it comes to how much you should charge in the context of a full time or part time salary – so I’ve made it easy for you and created the TechPixies Pro Rata Calculator which tells you exactly what the hourly rate equivalent should be for the various salary levels. I hope you find it super useful and will also consider receiving our weekly tips if you aren’t already.