The Freelance Consultant ePub eBook

Richard Newton

• Publisher: FT Publishing International
• Year: 2021
• ISBN:
  9781292360850
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Consultoría

Freelance consulting, coaching, IT contracting and other self-employed professional roles are fast becoming the preferred way to find fulfilling work, generate a great income, and futureproof careers, whilst giving all the benefits and freedoms of being your own boss – but few know how to make it really work.
The Freelance Consultant is the comprehensive guide into turning your expertise into a viable, and valuable, business.
With independent consultant Richard Newton, you will discover a wealth of insider knowledge as well as a network of other successful advisors willing to share their stories. The Freelance Consultant will explain how to:
• Setup, run and thrive in your freelance, consultant or coaching business. • Acquire those vital first paying clients. • Know what it takes to become a successful, differentiated and valuable advisor. • Build your business, define your services and set your prices. • Understand your customers and identify, manage, and retain key clients. • Keep developing and continually improving your skills an growing your business.
Turn from amateur to pro with the help of The Freelance Consultant.

part

one

The essentials

chapter

1

Why be a freelancer?

I want to start this book by helping you to understand what your experience of being a freelancer will be like. This will answer two questions for you: what will I get from freelancing, and is it really for me?

There is often a lot of naivety about freelancing, and an assumption that it’s an easy way to make a living. It can be wonderful, but it can also be challenging and throw up risks that an employee does not face. On the other hand, some people would love freelancing, but they don’t take the leap away from the safety blanket of paid employment, because they worry too much about problems that are easily resolvable.

I want you to be able to assess freelancing calmly – understanding the benefits as well as the risks.

Let’s look at the opportunities as well as the possible pitfalls. The good news is that on balance most people can thrive as freelancers, taking advantage of the opportunities and avoiding the pitfalls. We’ll look at this in summary in this chapter and there will be more detailed advice throughout this book on how to do this.

Why should you consider freelancing?

A good question to start with is why freelance when there are lots of fantastic and interesting jobs around? Some of those jobs are well paid with incredible benefits. On top of this, there are very few services offered by freelancers that someone in an employed job does not also do. For instance, there are many employed consultants, coaches, mentors – and much of what contractors do is also done by someone who is an employee. So why go the freelance route?

There are three main reasons why you might consider becoming a freelancer:

1. 1You might make more money as a freelancer compared to an employee.
2. 2You want the independence that comes with being a freelancer.
3. 3You feel you have no choice. You cannot find a job in your field or you have been made redundant, and you think that if no one is going to offer you a job you might as well try freelancing.

I want to explore each of these, and what they require of you in return.

Money

Whatever your attitude to money and whatever your income aspirations, we all need some of it. This desire for money ties in closely with the other aspiration of freelancers – for independence. If your chosen route is to be a freelancer, there is one critical area in which you are not and will never be fully independent: you need clients from whom you can earn a living – you are not about to disappear off the grid!

Clients have expectations and may only hire you if you meet these expectations. At times you will find more clients than you can service, but at others you may struggle to find any at all. If you choose to work independently, the old phrase that no one owes you a living needs to be firmly in your sights.

I know some freelance experts who have made themselves seriously affluent, much richer than people doing similar roles in industry. A very comfortable lifestyle is achievable if you approach freelancing sensibly. If you follow the advice in the future chapters, you will have a firm foundation for achieving this. But it is important to understand the risks associated with earning a living as a freelancer.

You can earn very good money as a freelancer – if you get your services right and you find the sort of clients those services are valuable to. A lot of this book comprises explaining how to do this. But there are a couple of risks in the way: firstly, at any time, your revenues can dry up, and secondly, you may find yourself facing unexpected bills you have not got the finances to pay.

As a freelancer there is always a risk that your revenue can stop at very short notice. This comes from those global black swan events, such as the banking crisis of 2007 or the coronavirus pandemic of 2020. But they also come from individual issues, such as family problems and illness. Outside of crises, it’s also true that an important client, for a million and one reasons, can just decide to stop hiring you.

Every so often I meet a freelancer in desperate straits. After years of earning a great income, and living a comfortable lifestyle, there is an interruption in their work. Bad luck, illness or the global economy creates a surprise and they cannot find work or cannot work. The bank account soon empties, and difficult times ensue. With a little planning and a little restraint on spending every dollar you earn, as you earn it, this is avoidable. This should be obvious, but it’s surprising how often I find self-employed people who do not adhere to this principle.

Additionally, unlike employees whose tax is taken away before they get their pay, freelancers pay their taxes afterwards. It can be easy to lose track of how much those taxes are, and to overspend only to get into difficulty when that tax bill arrives.

A lot of people worry about these risks, but they are not so difficult to reduce. There are four ways to reduce these risks:

1. 1Stay on top of the money. What you have, what you are owed and what you owe. If you aren’t naturally great at doing this, there is an easy answer. Hire a good accountant. There are lots of accountants who are skilled at helping freelancers. To me this is essential.
2. 2Build up cash reserves. I always recommend a minimum amount of money to be able to get by without a contract for 6 months. In the boom times, when the cash is rolling in, this may seem unduly pessimistic. In a freelance career across multiple decades, I have found that at times even the most highly demanded freelancer finds themselves without work from time to time. Being able to save up this reserve is helped by maximising your income when you can earn, which we will look at in Chapters 6 and 14.
3. 3Don’t depend on one client. I’ve known freelancers earn great money for years from one client, only unexpectedly for that client to stop buying. The best answer to this is to have a set of clients. Most freelancers don’t need hundreds, but you should try to have at least a handful. We’ll explore how to do this in Chapters 5, 8 and 9.
4. 4Optionally, have another income. You don’t need to do this, but lots of freelancers do. Some side hustle that keeps them interested, but also acts as a buffer if the main freelance income stalls for a while. For instance, I write. I know other freelance experts who own holiday properties, are professional musicians, offer training, run a farm or are a director of other small companies. There is nothing stopping you doing anything else, save how you prioritise your time.

But while you can reduce these risks to your income in practice, there is also a psychological challenge. Some people just cannot stand the pressure of worry that comes from having to constantly think about the next sale.

Honestly, I think this concern is overblown, for the simple truth is that even most permanent jobs are not as safe as you may imagine. I’ve been involved in too many downsizing, relocation and radical cost-cutting programmes not to know this. But, if you are fundamentally someone who needs the perceived certainty of regular monthly pay into your bank account, freelancing probably isn’t for you.

Independence

A higher degree of independence is a realistic expectation if you choose the freelance life. I know many people who, after years of feeling unfulfilled, have released themselves from the corporate world and made themselves independent.

I want to explore what this means and show you how you can achieve it while avoiding the pitfalls. Some of this I’m going to do in this chapter. It is also a repeated theme in the stories throughout this book, especially in the ones at the end of each chapter.

Years ago, most of the freelancers I used to meet primarily moved into freelancing for the money, but increasingly more and more of the freelancers I meet are doing it for quite a different reason – they want independence. And in practice this usually means the ability to choose when you work, where you work from and who you work with.

Most freelancers want something that money does not compensate for – independence. By this I mean the ability to be free of a lot of the issues and challenges that come with working for someone else; the chance to avoid some of the hassle, the politics and frankly, nonsense, that goes with working in a large organisation.

Freelancing enables this, but for most of us there are limits to quite how independent we can be.

There are a few people with a rare and in-demand specialisation who can decide exactly which hours of the week and which weeks of the year they choose to work. Most freelancers, though, are like me. I have a lot of flexibility over the times and days I work, but it’s not always completely in my control. I typically take a few months off every year to do other things, such as writing. But sometimes I want some time off, but I can’t take it because there is a bit of work that is too interesting or too valuable not to do.

You can, of course, always say no to any piece of work because you may not want to work at that point in time. That’s what being independent means. I have rejected work that has come at the wrong ti...