For those who have a creative talent, or that have consultancy or project management expertise, starting a freelance business could be a very attractive prospect. Freelancing can allow you to work when you like, and only take on the work you want to do. It can also provide a flexible income that works around your lifestyle.

In this guide, we will cover some of the key steps you will need to take when starting a freelance business, including what niche you will work in, how to make a profit, and more importantly, how to set your business up for success.

Is Starting A Freelance Business A Good Idea?

Statistics show that freelancing is becoming ever more popular, with the Office of National Statistics revealing there were around 4.24m self employed workers in the UK in July 2023. They predict this number will rise significantly.

There are various risks and benefits, however, to consider when deciding if freelancing is for you. These include:

• Flexibility – The ability to take on work only when you can (or want to) is highly beneficial for those who suffer with conditions that fluctuate in severity, such as long Covid, ME, fibromyalgia and more. This also works for busy parents, carers and other types of lifestyle that require flexibility.
• Earn what you want – You will be able to set your prices as a freelancer. However, these will be restricted by how much people are willing to pay for your services. However, you can work the hours that you want, so if you have an expensive event coming up, you could take on more work, then drop down as your financial needs change.
• Diverse opportunities – If you become part of a freelance community, you may be able to connect with other freelancers to offer services as a package. This could help you to diversify your client base.
• Isolation - One problem that some freelancers experience is isolation. If you are fully working from home, and have a little opportunity to socialise outside working hours, you may find yourself becoming lonely. However, there are lots of freelance cafés and you can even rent an office desk if you would rather be around other people.
• Fluctuating income – the downside of freelancing is that your income is never guaranteed. There may be periods of time where work is in short supply, and you may worry about your financial future. Putting away money when times are good, is a wise idea, as this will see you through the peaks and troughs.

Hopefully, when you have considered these risks and benefits of starting a freelance business, you will decide that you want to give it a go. If so, there are certain ways in which you can help yourself by starting your business on a solid legal footing.

Different Types of Freelance Careers

There are various options open to you, depending on your qualifications and skill set. Examples of careers that can lead to you starting a freelance business can include:

• Creative industries - The freelance market has various creatives operating within it. Some popular choices would be writing, graphic design, and web development services, for example.
• Consultancy – If you have made a success with your career, so far, you may make the move into consultancy by starting a freelance business. That way, you can help clients using your already honed skills.
• Marketing – If you’re adept at marketing, but have always worked for other companies, now could be the time to start out on your own. You may be able to utilise some of the contacts that you have made, or you could learn new skills that allow you to move into social media marketing, for example.
• Translation/language services – It may be possible for you to offer international clients translation services. After all, some translation apps can be particularly unhelpful when it comes to complex terms and conditions. This is a niche market and freelancers can do well here.

Step 1 - Building The Basics

Before you go ahead and start marketing yourself as a freelancer, you should think about starting your freelance business properly.

• Choose Your Legal Structure - One decision you may have to make right away is related to the legal structure of your business. Most freelancers start off as sole traders, however, some prefer partnerships or to register as a limited company.
• The experts at Your Company Formations could assist with setting up your legal entity properly.
• Fulfil Your Tax Obligations - You must register with HM Revenue and Customs so that you can fulfil your tax obligations. You will need to provide details of your income and expenses so that your tax can be calculated accurately. It would be wise at this point to either contact an accountant, or set up an accounting system that you can easily use.
• Insurance and Legal Obligations - If your freelance business involves providing services or advice, it would be wise to look into what insurance you can get to cover yourselves. You should also ensure you are aware of your legal obligations with regards to data protection and client confidentiality.

Step 2 - Planning Your Business Journey

Next, you will have to plan for success. After all, a solid business plan gives you something to refer back to, and allows you to structure your business in a way that is primed for success. Your business plan should include:

• Executive summary – This should clearly define your business as well as the services that you offer.
• Competitor and market analysis – You should research into what your customer base is looking for and how you can deliver on this. You should also look at any competitors in the market that are doing particularly well to see how their services compare to yours.
• Costings - make sure to include all overheads, as well as any consumables such as printer paper or batteries for a dictaphone, for example.
• Decide on your services and pricing – Once you have done your market analysis and costs, you will be in a good place to set your prices for the services that you want to deliver.
• Plan your marketing – A marketing plan is vital as it gives you something to refer back to and tweak to make sure your campaigns hit their mark.

Step 3 - Launch Your Business

Once you have everything set up and planned, it is time for the best part: starting your freelancing business. There may, however, be some other considerations along the way that may be worth making, such as:

• What will you do if your growth surpasses expectations?
• Will you use an accountant or complete your accounts on your own?
• How will you keep your interest fresh in the industry you’re operating in?

Keeping these questions firmly in mind when planning your business will give you the best route to success. If you need assistance registering your company name, or have questions about starting a freelancing business off on the right foot, Company Formations can help.