Ask DN: I'd love to go freelance/start a creative company. Where do I begin? Should I do it?

over 5 years ago from , Developer at Shout Digital

Currently I work as a .NET developer for a UK housing association, but I deal with all sort of creative areas outside of work (design, web and video) and have a big passion for front end development.

My biggest thought really is taking the leap from being safe in a 9 to 5 job and working for myself. Is there any advice anyone can give?


  • James StiffJames Stiff, over 5 years ago

    Hi Rick

    Before you consider ditching the day job, make sure you have at least three months worth of living expenses in the bank. Cashflow can be a real issue for freelancers/small businesses. Even if you have some projects lined up, it can take a while to get paid (expect 30-90 days). Don’t be afraid to ask for 30%-50% up front when commencing a project and insist on payment terms of 15 days if possible.

    Be prepared to spend a significant amount of your time on new business generation and admin. Set aside at least half a day per week for these tasks, if not more!

    Get a good accountant and/or use a service like FreeAgent to keep track of your bookkeeping. You’ll need to register as self employed, sole trader, partnership or limited company and stay on top of your tax obligations. Make sure you save an appropriate amount of your income to cover your tax liability. It’s easy to get stung in January/July when your tax bill is due.

    Work out what your unique selling point is and who your target market are. It helps to differentiate yourself from your competitors and clarify your offering.

    Treat yourself as your first client. Document the process of branding yourself, marketing, building your website etc and use this as a case study. Demystify the process for potential clients and they’ll be more inclined to use your services.

    Good luck!

    Reading list:

    16 points
    • Rick Butterfield, over 5 years ago

      Wow, thanks for the in-depth response James! I think a huge thing is going to be the unique selling point—the market is saturated nowadays so I'll need to stand out somehow!

      2 points
    • Jeff CouturierJeff Couturier, over 5 years ago (edited over 5 years ago )

      James is spot-on. However, having done this myself, I’d modify a couple things slightly.

      3 months of living expenses is the bare minimum. Shoot for 6. Realistically, you can expect it to take you a year to really get into a solid groove and get moderately stable.

      Don’t be afraid to ask for 30%-50% up front when commencing a project and insist on payment terms of 15 days if possible.

      Yes. Always get a deposit up-front. Never do a single hour of work without a signed contract. Ever, for anyone. Seriously.

      You can do this, and do it well. It just takes organization, good discipline and some hard work.

      1 point
      • James StiffJames Stiff, over 5 years ago

        I agree that a bigger buffer zone is definitely better - unless it takes so long to save that you don't actually make the jump. It all depends on personal circumstances. The job I left to go freelance was barely covering the cost of living (in London) so I just took the gamble that work would materialise. Thankfully it did.

        0 points
    • Blaine KBlaine K, over 5 years ago

      Great advice so far in here.

      One note about getting a retainer/deposit at the start of your project is that it, along with a contract, proves your client can and will make a payment to you. That they have purchasing power, that their AP department will actually pay you, and it will give you the timeline in which your next payment(s) will be made.

      I always try to get 50% of the project up front. If the project dies, or the client never pays me another dime, I should be able to survive.

      On how much to save: definitely try to get 6 months of runway. Money stress is a unique type of stress, and it will crush your decision making.

      One more thing – your best clients will come from referrals, and referrals come because you are great at what you do. So your first priority needs to be to do good work. Full stop. Cash flow, deadlines, shitty clients, etc all that will make it hard. Stick to your guns.

      1 point
  • James GreigJames Greig, over 5 years ago (edited over 5 years ago )

    (1) The biggest mistake you can make is to undervalue your services. If your rate is not being questioned, you're not charging enough. If in doubt, charge more. And also over-estimate how long things will take.

    (2) Positioning matters. Being just a freelancer vs being a consultant, being a freelance vs having your own 'studio', etc. Try and boil down what you do into a single sentence elevator pitch. Eg I’m a XXXX who helps XXXX with XXXX. Unlike my competitors, XXXX.

    (3) Everything that James S. already said about the financial side of things. Would never have thought it possible, but FreeAgent has almost almost made accounting fun :)

    (4) Start building your network now — do some small freelance jobs on the side, let people know that you're planning to go freelance, start thinking about who you'd like to work with, and make sure you have similar projects in your portfolio which demonstrate your ability in that field/sector/skill.

    (5) Think about your motivations for being self-employed. Is it about having more time for side projects? More money? Moving into a slightly different line of work?

    I wrote long blog post about freelancing at http://greig.cc/journal/2015/3/before-you-go-freelance and also have a free email course about going freelance at http://greig.cc/beforegoingfreelance

    PS. If you're not sure if you're ready to go freelance or not... I asked "Hi freelance designers. What one piece of advice would you give your former fully-employed self?" on Twitter: https://twitter.com/j_greig/status/573767098759057410

    PPS. Also see Brennan Dunn's great material on freelancing at http://doubleyourfreelancing.com/

    5 points
    • Rick ButterfieldRick Butterfield, over 5 years ago

      Thanks for all the advice James! My biggest reason is that I'm going to be studying two days a week from September so I'm looking for more flexibility. A lot of contracts I've found are full time so working for myself seems like the best option (in theory; in practice I imagine it'll be a lot different!)

      1 point
  • Paddy DonnellyPaddy Donnelly, over 5 years ago

    I'd recommend listening to our podcast, Working Out. This particular journey is what we talk about every week. Hope it helps!

    3 points
  • Chris PorterChris Porter, over 5 years ago

    Just like Carl, I did the same thing.

    I've started freelancing at 17 and now I'm 28. It can be a tough ride, but its definitely a fun one.

    Make sure you're always looking for work. If you can, hire an intern/assistant to help you pull leads. I've even set up a deal with her to get commission for every lead she turns into future work.

    Also, stay up with headhunters just in case you see a dry period coming. You'll know when you're in the middle of a project and you have no projects scheduled next month. Then you can hit up those head hunters and try to get some temporary contract work. Make sure its temporary, because once you go self employed, its likely you'll never enjoy the 9-5 life anymore.

    You'll be so used to doing two to three projects at the same time. Working with different brands. Working with different mediums. Working wherever you want. If you head back to the full time life, then you go back to working on that one product, or sit in that one office all day. So watch out for that if you're trying to sneak back into full time. You don't want to waste anyone's time. That's why I try to do the temporary jobs just to supplement income when its dry.

    As for taxes, please please save. Its tempting to spend all the money you've paid yourself. If you must, open another bank account just for saving that tax dough. Its better to be sad per paycheck that you have to put away $1000 of your $3000 than to owe $1000 later to the government. Annoying phone calls, certified mail, all that. Then you forget, make the same mistakes, owe again next year. You'll be living that Wesley Snipes life. Don't do it.

    Now, about time management. You'll have the freedom to do whatever you want, whenever you want. If you want to work on a project for 2 hrs or 12hrs for the day, you can. If you want to work on a project from 9:30pm - 1:30am, you're free to do so. Just make sure you plan your schedule ahead of time. Make sure you're setting up time boundaries per project. Make sure you're not double booking yourself.

    For example, my biggest project, I spend 4-6 hrs a day depending on deadline. Then my second project I'll spend 2-4 hours a day. Project 3/Pro Bono project is usually under 2 hours per day. I try to get out and walk or go talk to people and not over work. Its not worth it unless there's a huge deadline the next day. If you're efficient, you can knock out 8hrs of work in 2-4hrs. Isn't that a good reason why to leave 9-5? You're all done early and want to enjoy the sun, but you have to sit in the office because you have to complete a full eight hour day?

    For those pro-bono projects, my thing is, I do one pro-bono project per year like a lawyer, lol. I limit pro-bono projects to non-profit organizations for a good cause. With these projects, they're like side projects with clients. You have a bit more freedom to try new things. That's my positive with pro-bono projects. Make sure you limit those to at least 1-2 hours a day. Also, let those pro-bono clients know that you only do their project 4-5 hours per week. Its good though because it looks good on your portfolio and you're giving back to the community in your own way.

    That's all from me for now.

    2 points
  • C___ F_____C___ F_____, over 5 years ago (edited over 5 years ago )

    Hey! I asked a similar question myself a while back.

    What I did: started picking up freelance gigs in my free time. I was very unhappy at my 9-5 because of questionable business ethics, so for about 2 months I devoted a lot of my spare time to getting small freelance gigs. This kept me sane and generated some extra cash, which was nice. It was my goal when I very first started out to become a freelancer (with a view to starting up my own fully-fledged agency eventually), so it wasn't on a whim. I was taking a step in the right direction.

    Then, I hit a tipping point at my 9-5 and decided that enough was enough: handed in my notice, with no upcoming work booked in. I spent the next month (notice period) tweeting, updating my website and getting the word out that I'd be freelancing full time. This landed me enough work to see me through the next month, and I've been moving forwards from there.

    This isn't an ideal way to do things, but it worked out for me. I've turned down lucrative full-time offers because I'm happy with my new work-life balance and the projects that I'm working on.

    Finances: Overestimate your monthly outgoings. Figure out how much you're going to make in a bad month. If the second figure is higher than the first figure, start freelancing. If it's not? Increase your rate.

    If you can, make sure that you have some money in the bank to keep you going for at least a month. I did it with no savings and only my last paycheck; I just about scraped through the first few weeks. It's terrifying not to have a buffer.

    1 point
  • Charles KiarieCharles Kiarie, over 5 years ago

    Focusing on a niche can be really helpful like lets say eCommerce, or just landing pages(with an offering of A/B testing) something of the sort its about being an expert at something. A task I am not good at. ;)

    0 points
  • Andy LeverenzAndy Leverenz, over 5 years ago

    Bullet point items that worked for me over time

    • Start small
    • Charge what you think you are worth and double it
    • Avoid spec work
    • When working for yourself, advertise as yourself and not as an agency only until you are a legitimate agency
    • Don't be afraid to say no
    • Referrals are where it's at
    • Finally, don't burn bridges
    0 points