Some call it the gig economy, others call it self-employed while a select few might call it freelancing. Regardless of the terminology, few would disagree that it is on the rise – and isn’t showing any signs of slowing down.
Bearing this in mind, it can be tempting to jump in with both feet and join the bandwagon. The flexibility on offer is something that most of us would grasp with both hands, but there are also compromises. Today’s article has been pieced together to take a look at some of these topics so you question whether or not this approach really is correct for you and your career.
Are you prepared for “unexpected” costs?
This is the main point where people who are thinking about turning to freelancing tend to trip up on.
It’s very easy to have a degree of tunnel vision when it comes to freelancing. It’s very easy to write out your expenses on a beer mat, and only include the obvious things such as equipment and an office (with the latter tending to be a home office anyway).
However, if you are to look into this in more detail, you’ll see a whole host of costs. Tax is the big one and rather than things being calculated for you every month, you will be expected to pay your bill at the end of each and every year. Ultimately, you need something left over at the end of each tax year to pay this.
Then, there are things like insurance. For example, if you operate in the surgical space, you’ll need to factor in surgical indemnity scheme from Incision Indemnity as part of your expenses. It is small formalities like this which are quite often forgotten about.
What about the unexpected pay dates?
Hopefully, you have already thought about this next point. Rather than having a set day where your salary is paid into your bank account, this doesn’t happen when you become a full-time freelancer. Instead, you have jumped into the unknown, and you need to budget for not necessarily being paid every month. It might be more often, or it might not be, but it’s unlikely to be consistent.
Don’t forget the lack of annual leave
Another interesting consideration relates to annual leave. In short, you’re not going to get paid for it.
While the UK, as an example, will allow you around four weeks’ worth of annual leave on full pay, this is reduced to a big fat zero when you work for yourself. Clearly, this needs to be budgeted for before you make your move.
There can be a loneliness-factor
Let’s conclude proceedings with a point about loneliness. Sure, when you start to count the pounds and pennies, it can be easy to forget about the psychological impacts of working alone. This is something that you need to question though, as a lot of people struggle to get used to life without co-workers and as a result, give up.