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Six tips for new freelancers

Sarah Blythe

The very nature of freelancing—selling services to an employer without entering into a long-term contract—makes it hard to say exactly how many freelancers there are at any one time.

The very nature of freelancing—selling services to an employer without entering into a long-term contract—makes it hard to say exactly how many freelancers there are at any one time. However, according to a 2015 study, there were 4.1 million freelancers in Australia, 47% of whom were under 35 years old. Their reasons for freelancing sum up what makes it so appealing to so many people: flexibility, freedom, the pursuit of personal passions, and the many opportunities to build new skills.

Freelancing is especially popular among creatives, many of whom have a specific skill set (e.g. graphic design) that large businesses require on an ad hoc basis. It can be an exciting way to work—where and when you want—but can be difficult to transition into if you’re used to having a lot of oversight. So, if you’re planning to give it a go, get off to a good start by reading the following tips.

Register for an ABN

You’ll need an Australian Business Number—a unique 11-digit code that distinguishes you from other businesses—before you start sending out invoices and making money.

Fortunately, an ABN is free and easy to set up. Simply head to abr.gov.au and provide some basic personal details to get your ABN in a matter of minutes.  Double-check your application before submitting it—if you miss anything out, it can take up to 28 days for the Australian Business Register to review and approve it. Note that if you’re freelancing and don’t employ anybody else, you’ll need to register as a ‘sole trader’.

Start looking for work

Finding work as a freelancer is a challenge you can approach in various ways. You may already have business connections that you can reach out to for possible work, or a website that you can share with friends or on social media. However, don’t worry if you’re starting from scratch. The good news is that there are a variety of services that can help connect you with future employers. Websites worth checking out include Upwork, Toptal, Freelancer, and, of course, LinkedIn.

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Choose a productivity technique and stick to it religiously

Whether you’re building a website or doing some graphic design work, the chances are that, as a freelancer, you will be personally responsible for getting things done on time. This is true of all jobs, of course, but you may find yourself leaning more on your self-discipline when working remotely, or when jumping between projects for different employers. You may therefore find it helpful to research productivity techniques and find a methodology that works for you.

Once you settle on a system, stick to it. Remember: you’re a freelancer, which means that nobody else is going to do a performance review for you. Making sure that things get done on time, and to a high standard, is entirely your responsibility.

Consider co-working spaces

One of the potential downsides of freelancing is that you will no longer have a stable workplace in which to befriend colleagues or just get out of the house. Recognizing this, many savvy entrepreneurs have founded ‘co-working spaces’, where you can freelance while surrounded by other equally mobile professionals. Co-working spaces vary widely in terms of price and features, with some offering not only a desk to work at, but also private meeting rooms, super-fast internet, and events designed to help you network and gain new skills.

Get on top of your invoices

Most freelancers use invoices to manage payments, either sending them after the work is complete (often with a list of billable hours and how they were sent) or before (if a lump sum has been agreed upon). You can find many templates online. However, as a general guide, every invoice should include:

  • Your ABN
  • Your contact details
  • The name of the company that has commissioned your work
  • A description of the work completed
  • The fee or hourly rate and number of hours worked (plus GST if required)
  • Your bank details
  • An invoice number and date
  • Payment terms (i.e. a deadline for processing the invoice)

A popular solution is to use an online service like Wave Accounting that can generate invoices for you, send them to clients, and remind you when an invoice is overdue. Similar services include DebtorDaddy, Invoice Machine, and Xero.

Remember that you must still pay taxes as a freelancer. If you earn more than $4,000 per year from your freelancing job, you’re eligible for the ATO’s pay-as-you-go service, which will allow you to spread your tax payments across the financial year instead of getting hit by a lump sum at the end of June. Get into the habit of regularly setting aside money for tax—you can use the ATO’s ‘tax withheld calculator’ to figure out exactly how much you’ll need to pay.

Know what you’re worth

As a freelancer, you won’t be reliant on somebody else to determine your salary and put a fair price on your work. While some employers might have a fixed rate that they pay freelancers, others will ask you for a quote. When figuring out how much to charge, it’s a good idea to research the market rate for somebody with your skills. This will give you a general idea of what your work is worth. You can then refine the number by asking questions like: is this covering my costs? How long will the work take (and what does that make my hourly rate if I accept a lump sum)? Will I make enough to live on? Will I have other freelancing jobs at the same time?

Often, you’ll find that payment rates differ from employer to employer (even for the same tasks). This variation is perfectly normal, and accepting it can make it easier to create a steady stream of work.