Two years freelancing …

In late February 2011 I lost my job. I was given four days notice that the company I worked for was going into administration and that I would have to find new employment, or failing that work for myself.

It was a terrible experience but it forced me into a position that I had been too scared to pursue when working: full-time freelancing. I’d been doing bits of freelance work in my spare time for a few years but was never confident of my abilities to support my family and cover a mortgage under my own steam.
And we had no savings. How do I cover the bills, the mortgage, feed a family of four with no income?

Thanks to twitter I managed to have six weeks of work lined up within a few hours and have somehow managed to survive on my own ever since. So I am now coming up to two years as a full-time freelancer. 731 days of supporting myself, my family and my stationery habit through coding.

It has been a crazy couple of years – we sold our house, relocated from Scotland to Somerset and I have had the pleasure of worked on a great range of projects with some lovely people.
I have learned a hell of a lot about myself and about how to work with others. I’ve loved having the freedom to work on projects I care about and having the flexibility to work the hours I want. However, I wish I’d learned more about cash flow and budgeting and that I took/made more time off for myself.

The business side of working on the web is deservedly getting some great attention at the moment. There is a feature on freelancing in the latest issue of .net magazine whilst we are now seven episodes into the great podcast, Unfinished Business which touches on a range of topics covering working within the web industry.

So looking back over the past two years what advice would I offer to others just starting out freelancing? Here are a few bits of advice taken from my own (sometimes steep) learning curve. I’m by no means an expert but hopefully there is a nugget or two here to help others who find themselves in a similar situation to where I was two years ago.

1: Keep on top of your books

Book-keeping is boring. We all put it off, we shove our receipts into boxes and then there is a mad panic as we get ready for the frenzy of self-assessment. So my first tip is make time for your book-keeping. Just an hour a week spent now will keep you on top of things and save hours of tears, confusion and pain down the line (trust me!).

How you keep your books is up to you but I’ve been an avid user of Freeagent since it came out of Beta in 2007. Since 2011 Freeagent has become an invaluable tool in managing the financial side of my business; from sending out estimates and invoices (and payment reminders) to clients, to recording bank transactions, to keeping track of expenses, to calculating self-assessment.

If you are interested in trying Freeagent the following link will give you 10% off a monthly subscription with the referral code 1c8frs9e

2: Value your time, know your rates

Freeagent was the first tool I used that really made me think about the value of my time. When I started using it I was only working a few evenings a week freelance but even then it paid for itself. My rationale was if £15/month saved me more than the equivalent amount in my billable time then it was worth it.

Whenever I see a piece of software or a solution (such as a CMS) I always ask – “how much time will this save me?”. And when you have an appreciation of the value of your time you rapidly appreciate that free software rarely is.

On the subject of valuing your time you of course need a benchmark for this and to do that you need to work out a realistic day-rate. By realistic I don’t mean “what would I have to charge to cover the equivalent of a salaried position?”.
When freelance you must pay for your learning (books, conference attendance, etc), you must pay for your time not working (holiday, sickness, etc), you must pay for the resources you need to do your work (computer, software, rent, etc) and you must pay for your life after you stop working (pension, savings, etc).

Knowing your rates – and sticking to them – is critical to being successful at this freelancing malarkey and the subject of a great podcast from Anna and Andy. I’ve also blogged on this following a survey on freelance rates I carried out last year and there is a handy tool to calculate rate by location, skills and experience based on the results from last years survey.

3: Get used to budgeting

I’m terrible at budgeting. The thing with freelancing is that it is often periods of feast and periods of famine. That can be a nightmare for planning, especially with mortgage/rent, bills, etc coming out.

So it is absolutely critical to get a deposit from clients.
I usually ask for 25% off the estimated project fee up front to secure my time on a project. This helps keep money in the bank for when things go quiet on a project or a lean period. This has proven especially valuable when working on projects that require outgoings up front, e.g. travel or software licenses.

The other tip I would offer is get used to setting money aside for tax. I bank with HSBC which offers me a business savings account alongside my business bank account. Whenever I receive payment on an invoice I always take out 50% straight into my personal account as drawings, put 33% into my savings account to cover tax and rainy day and leave the rest in my main business bank account to cover outgoings like business rent. It’s a really good habit to get into.

4: Find space

In my first 6 months of freelancing I worked from home. We lived in a quite remote location and had a spare room I could use as an office. However this didn’t work out for me – I felt very cut off from other people and found it really hard to concentrate on work with a young family around. I was never giving either my work or my family my full attention and ended up working crazy hours to compensate.

Aware of this, when we moved to Somerset in 2011 I was keen to find an office space I could work from. I was really fortunate to find space in a great co-working hub in Frome and the benefits have been considerable: I find am much more able to keep work and home life separate, I try to do a 9-6 most days and now very rarely work from home. I’ve also made some great friends and am much more sociable.

Looking back at my second tip, the amount I spend on rent is more than made up by the increase in productivity (and personal benefits) I get from working in such a space.

5: Network

My final tip is networking – for me this has been through twitter and going to conferences. I rarely attend local networking events – they no doubt work for some people but I have never got any work out of attending them.

On the other hand, in my first year of freelancing I attended a lot of conferences. This ate massively into my profits but it reaped its dividends from the amount of experience I got – socially, educationally and professionally – and the number of people I met. In the last year probably 70-80% of my freelance work has been through contacts and referrals made at conferences. And this all came from going to places and talking to people.

So what tips/advice would you give to those starting out freelancing? What mistakes have you made?


Great post! I can really relate to ‘working from home’ being unproductive…

I work 4 days a week for a web app/software startup and freelance in the evenings, weekends and on Mondays. I go into their office to freelance on Mondays and find it really productive! I can do a weeks (evenings) worth of work in that one day!

Great tips with keeping on top of books too.. FreeAgent is a godsend!

Great advice. I would just like to add one thing – learn to say no.

I find it really very very temping to take on every piece of work that I can come across without real discernment, I’m afraid to not take a job a risk being without some cash. It’s making me stressed, causing me to do poorer than average work and affecting my health and well being. Learn say no.

Great to see your freelancing career flourish :)

The biggest thing for me recently has been learning to outsource or pay for stuff to make my life easier. Just like you mention Freeagent, as things have been getting busier for me I have passed on jobs that I find hard to find the motivation to do. This includes book keeping and maintaining the content of the websites I run.

Couple points I’d like to add onto your list.

As a freelancer it’s easy to see chasing the coin as your short term goal as paramount, however many of us like Cole have people who depend on us not only financially but personally. They require your attention more so than any client and should be allowed for. I’ve burnt out regularly because I’ve forgotten weekends exists.

Brings me to ‘weekends’, do them, they are important. If your are going to work at all make sure it’s with a pencil or paint.

Be honest with yourself, look into yourself or ask a good but brutally honest friend, what your weaknesses are, the fact is you’ll already suspect where your afraid to go. These are your personal areas of improvement. These will always exist but you’ll create coping systems.

All the best.

Well done Cole, keep up the good work. I like to think you and me are quite alike in how we see freelancing and the many things associated.

Agree with all your tips.

I wish I had done things differently when I was freelancing then maybe I wouldn’t feel as angry and bitter but looking back, going freelance made me a better person. I got to meet new people, new ways of working and got some much needed self confidence.

I only really say one thing these days to people going freelance. “It will be the best thing and the worst thing you ever do. Expect to be let down by some people and helped by some many others”

Sounds negative maybe but I think if you follow the advice as posted above in your thread, it will be all ok.

Here’s to two more years mate

‘Book-keeping is boring’. Really? I guess it’s all down to personality in the end, but I find it far from that! Having that time every week to step away from your actual work, to take stock, crunch numbers and see if the path you’ve chosen is really working… It can be an enlightening and challenging moment – far from boring! Surely I’m not the only one who loves a spreadsheet??

Hey Cole.

Good post. I’ve been doing the “own company” thing too for a similar length of time.

Just to add to your list – we decided early doors not to pay for FreeAgent or similar but instead to stump up for an accountant. The financial comparison doesn’t work (say £1k over a year for an accountant vs £15×12 for the software) – but the peace of mind is absolutely, 1000% worth it. Having someone experienced on the end of the phone who truly understands how this (ridiculously over-complex) shit works is just such an amazing bit of peace of mind. A thousand quid might sound like a lot, but spread over a year (and when put in the context of “oh, just 3 days income”), it pales into insignificance.

We keep all our finances in Google Docs – there may come a day when stuff gets complicated enough that we need auto-invoicing and all of that but the day isn’t yet upon us..

The other thing we do which is a huge over-simplification but works for us is to put 20% of the value of every single incoming invoice into a separate business bank account. This more than pays for the corporate tax, is terribly simple and means that at the end of the year you don’t get a horrendous bill which you’re unprepared for. I have friends who have been badly stung by the tax thing, and this avoids it – plus because the maths is in your favour means you always end up with more than you need at the end of the year.

Networking: couldn’t agree more, although I loathe and detest the phrase “networking” as it sums up images of cheesy handshakes and suits, but certainly getting out there and doing stuff so that you know people and they know you is a very powerful thing. Almost every single bit of work we’ve done has been via a referral – we’ve done a few bids but the vast majority are referred.

Finally, I truly believe that there is a very powerful element of Karma to “doing business”. Doing a really good job really well, not stinging people for vast quantities of cash, introducing clients to other people you know if you can’t do the work yourself – all of this may be financially less valuable in the short term but builds a much, much stronger base – it is not only a savvy thing to do to grow a business but also has a huge benefit in that it helps you get up in the morning knowing that you’re doing “the right thing” – which for me is a huge motivator.



Mike Ellis on 26 February, 2013

Oh – forgot to add: the life/work balance thing. Since moving to Devon, we’re trying very hard to only work when the kids are at school, so that’s 9:30 to 3:30. It’s quite tough to do especially when there’s deadlines, but hugely satisfying. I’m pretty sure I get as much done in that time as I would normally get done in a “full” day – it’s intensive, “head-down” work, but then I finish and try not to go back to my screen for the rest of the day. The benefits are huge: we go look at the sea, hang out as a family, get time away from the screen, get some exercise… I’d hugely recommend this as a way of being.

At the end of the day, I’d rather we were a financially poorer family who hung out together than a ridiculously stressed one with parents my kids never saw…

Thanks for the interesting post Cole. I’ve been freelancing on and off (I actually went permie for 12 months last year, but now freelance again) since 2007, and I would add a couple of other points:-

1. In addition to knowing when to say no, know when to let go of bad clients. A few clients picked up in my early days of freelance were a leech on my time and stopped me doing projects I wanted to do, whilst constantly disputing fees and being late payers.

2. Dont just go to big conferences to network – I have found far better projects and contracts through participating in local Django and Javascript user group meetups and talks. It’s not just about making new contacts, but letting existing contacts know what you have on, and what you are interested in/ good at.