Perhaps it is the increasing cost of living or the work life balance that’s is the reason behind becoming a freelancer. But before you take your first client on, make sure you have the basics in place. They help you make money rather than lose it.
Register with the HMRC
You can register for tax after you have started trading. The HMRC does give you a bit leaway. However, before taking the first piece of work on, you should have a good idea how you are going to trade, at least in the first year.
Running a business as a sole trader is a popular option for single business owners and freelancers. All you need to do is to register for self assessment and even that you can do with a bit of delay without any penalties.
On the other hand if you are thinking of establishing a limited company, it is recommended that you do that before you start doing business. You will find that the details of your company will be needed for forming contracts, on letters, or when registering for corporation tax.
In today’s day and age everyone expects to find your business online. A profile on LinkedIn won’t cut it. As a minimum you will need a social media business page that carries all the information and contact details.
However, to win your potential customers’ trust, you are likely to need to go further. Many customers expect a business to have a website. A website instils a certain degree of confidence if it shows all the business legal information, it covers data protection, and any other terms of trade.
If building or managing a website is not your forte, outsource. Some agencies can offer a lot more in one package. Mr Seo, a digital marketing agency offering SEO services in London and UK wide, specialises in helping websites be visible on search engines, have the right content and attraction to your client base.
Keep your finances in order
Don’t get complacent or fall behind when it comes to keeping your financial records in order. No one likes paperwork, it is therefore unsurprising that catching up with it all can be a headache.
There are plenty of accountant services online that offer you various packages on a pay as you go basis. Many of them include accounting software such as FreeAgent which connect to your bank account keeping everything on track. Having an accountant also means you will not forget to file important documents with the HMRC which is the most common reason why freelancers and small businesses get fined.
Set up a business account
As a sole trader you can technically trade from your personal bank account but that can get very messy. Plus if you do use an accounting software as mentioned above, all your personal expenditure will appear in your business bookkeeping records.
As a sole trader you can simply get another personal account which should be quite quick with your current bank. As a limited company you will need to jump through a few hoops and it takes a few weeks to get a bank account set up. Be sure to start the process in time.
Get liability insurance
Never start any business activity without insuring your liabilities. Every business, no matter how small, is exposed to legal threats.
The types of legal threats will depend on what you do within your business sector. You will need to consider whether you give advice, have contact with the public and their property, employ staff, sell products, or use third party services.
Many freelancers don’t think they need freelance liability insurance because right now all the clients are lovely and they can simply not foresee what could go wrong. And yet all freelancers and small businesses do come across that querulous customer who is making unreasonable demands. Don’t get caught short. Disputes can quickly escalate and might end up costing you thousands in legal fees.