Making Money When Self-Employed: A Simple Guide

Posted December 9, 2019 by in Career
working on laptop

There’s a consensus amongst analysts and consultants that the self-employed portion of the population is set to increase steeply in the next decade, precipitated by digital working and remote options for employees. As such, it’s a wonderful time to take a look at the lives of the self-employed, and how they manage their time, their finances, and their workloads without management dictating to them how to work. 

This short guide aims to give a brief overview of how self-employed people manage their lifestyles – and how you can do the same in the near future:

making money self employeed

Planning Workload

The lives of self-employed people are rarely as linear and planned-out as those who work on a regular schedule – 9 to 5, five days a week. Instead, they have peaks and troughs in their workload, dependent on the seasons, on the schedules of those who employ them to freelance, or on their own availability. Projects come and go, but it’s important for self-employed people to plan their time effectively in order to make the most of their time and to avoid letting down clients and customers. As a self-employed individual, you should:

  • Maintain contact with all your clients regularly, and be at the end of the phone throughout the day to respond to emails and calls
  • Plan a weekly diary of work, using digital diaries to help you manage your various responsibilities
  • Avoid over-committing to too many projects at once – and be careful to avoid burn-out after a long month of work
  • Set aside some free time, and make sure you enjoy it free from the stresses of work and the tensions of your deadlines

With responsible time management comes peace and stability – something of a holy grail for those freelancers who feel they’re constantly spinning plates on their path to success.

Calculating Rates

As a freelancer or someone who offers services on a one-off, temporary basis, you need to understand your rates of pay. In general, you neither want to offer a price too low nor too high – as both can put off potential customers. 

One of the best ways to prove your worth and to show your calculations to potential employers is to use a time value of money calculator to outline the expense you predict your services will entail. Not only will this provide a fairly accurate and well-measured rate for your work – it’ll look professional and trustworthy to your potential employers, which will increase your capital in their eyes.

Managing Finances

There are a number of financial responsibilities that self-employed individuals need to be aware of as they start out in their careers – things that those in regular employment have to concentrate on less. These include:

  • Making and sending invoices for all the work you produce
  • Managing your income and splitting it into business and personal bank accounts
  • Monitoring your income in order to draw up accounts for the taxman
  • Insuring yourself against illness or injury that can prevent you from working

With all these extra responsibilities, you’re going to need to take control of your finances from the get-go, to save you costly and time-consuming work to get up-to-date with your finances further down the line. One of the key preparatory things you can do is draw up a budget and ensure that you’re making at least a little more than you’re spending each month. Make this on Excel or a similar spreadsheet, and input data from your invoices and your bank account to remain abreast of your spending and earnings throughout the year.

Marketing Yourself

During low periods of work, it’s important that you use your break in responsibilities to market yourself, enabling you to find more work in the future. You can do this in a variety of ways, but most of them exist online, so a sound understanding of the digital space is a must for self-employed individuals. You should consider:

  • Attending networking events and relevant seminars to meet like-minded people with work to offer you
  • Handing out leaflets, and putting up posters in your local area, to encourage people to spend their cash on your services
  • Using Facebook, Instagram, and Twitter, to share your work and to find clients and customers
  • Building an impressive LinkedIn profile for other employers to find you online
  • Making your own portfolio website, where you can build and share your collection of work with employers

Don’t use your down-time as a self-employed person twiddling your thumbs and wondering what to do with yourself: it’s important that you take your career seriously, by investing in the marketing you need to succeed.

This short guide gives some essential tips to those who are in the process of building self-employed careers for the future of work in 2020 and beyond.