Should you treat freelancing like running a business?

Many freelancers have chosen their career paths for the greater flexibility that freelancing provides when compared to working for an employer. But should you, in fact, be approaching freelancing in just the same way that you would approach running a business?

The rise of freelancing

Freelancing has boomed over the last decade, as workers around the globe make a less traditional approach to earning money work to suit their individual circumstances. A snapshot of the US demonstrates how much freelancing has grown: some 53 million people in the US now work freelance in some capacity, accounting for 34% of the country’s total workforce, according to the Freelancers’ Union. By 2020, that figure is expected to rise to 50%.  

Reasons for freelancing are as many and varied as the individuals who work freelance. For some, circumstances such as the loss of a job mean that freelancing is the only way forward. For others, fitting their working hours around family commitments or health issues means that the flexibility of freelancing is more important than the regular paycheque of working in an office. For others still, freelancing offers the opportunity to earn far more than they could make as an employee. 

How do you approach freelancing?

Whatever your reasons for becoming a freelancer, it is important to consider your approach to doing what you do. Considering things like your working hours, the service that you offer to your clients and what you are (and aren’t) prepared to offer as services will shape not only your career but also your clients’ expectations. For example, do you want to be at clients’ beck and call 24/7, or do you want to work random hours that can flex every week in response to your circumstances?

Your approach will have a big impact on your working life and potentially your family life. It will also determine how much money you can earn and how successful you consider your freelancing lifestyle to be. Of course, the definition of that success will depend on your particular values: for some, success will equate to wealth, for others, it will be finishing work in time to relax and enjoy every precious moment with the kids as soon as the school day ends. 

It is certainly possible to approach freelancing as a hobby – something that you do when you want to and fit around other things in your life. However, if your goal is to make as much money as you can, then approaching it like a business may well help. 

The business approach to freelancing

Imagine your freelancing career is a shop. The first thing you need to do is let customers know when they can shop there. If you don’t tell them when you’ll be open, they may get frustrated waiting around and choose to shop elsewhere. 

You also need to lay out your wares. If customers can’t see everything that you offer, then they may again go elsewhere for a service that you could easily have provided yourself. 

This business-style approach is particularly important when it comes to financial matters. Being organised with your invoicing will allow customers to pay for their goods promptly and taking care of your taxes and social security in a professional fashion will ensure that you are up to date with paying your dues. 

You should also consider insurance in just the same way as a business does and insure against risks that may cause the business to fold. For a shop, this might be insurance against floods or fire damage. For a freelancer, it could be insurance against a broken wrist or a period of unexpected ill health that would result in loss of earnings. 

Keep the ‘free’ in freelancing

Of course, taking this business-like approach needn’t take the fun out of freelancing. You’re still free to choose the hours you work, the rates you charge and the services you offer. You’re also free to go out and enjoy the sunshine when they weather is particularly good and to visit the supermarket at times when its quiet because everyone else is at work. Provided you meet your commitments to your clients, freelancing can give you a degree of freedom that employees never experience. 

This freedom is certainly something that freelancers should make the most of. Holiday pay and sick pay tend to be distant dreams to most freelancers, so be sure to celebrate the perks of the job that you do get! 

Final thoughts

Do you approach freelancing like a hobby or a business? Why do you favour your particular approach? Leave a comment to let us know what works for you.