The importance of building freelance peer networks

post Category: Building Your Freelance Brand — admin @ 6:34 am — post Comments (0)
postFebruary 12, 2010
It is very important for you to network not just with potential clients and more senior people but also with people on your own level, fellow freelancers and staff in both corporate and consulting clients as well as even with more junior people to you.
 
But why would you do this if they cannot give you work right now? Because they may be able to refer you to other people, potentially give you work in the future or you may be able to work together in a partnership and bid for projects together.
 
The point is that this is often a very forgotten type of networking to do. So, how can you do this?
 
Who did you used to work for and with?
Ask yourself which companies did you work with in the past. Go through your contacts and memory and try and remember who all the people in the company were at that time. Make sure to add all of these people on linked in and send them an e-mail to connect with them.
 
A lot of companies also have alumni events, where they have drinks or meals and bring together current and former employees and managers. Both of the main consultancies I worked full-time with offer this. Go to these events and reconnect because you will often meet other people who worked with the company after you arrived. You can also organise these events if no one has done so in a long while.
 
Some companies which use a lot of freelancers will often have drinks or other events where people can connect. One consultancy I work with, actually I never actually worked with them yet, has a monthly experts breakfast where they get together all of their senior staff plus a whole load of freelancers they have either worked with in the past or want to work with in the future. It has been a great way to get myself in front of them again and in fact my main contact there referred a potential good position to me.
 
Attend Networking Events Of Your Peers
 
Peers is a kind of general word but signifies people who may be more like colleagues rather than employers. However, they will know so many people just like you do including many employers. Or as we said before they could become employers themselves in the future.
 
So, there are many events for practitioners in a particular industry such as logistics, marketing, PR, strategy consultants and so much more. You need to do the research to find the relevant organisations and institutions which would host such meetings. Also look on linked in for relevant groups in consultancy and believe me there are a lot of them.
 
It is also worth going to the more general networking events for people of your age or background whether nationality, e.g. Australians in London or women in business etc for more general contacts.
 
Again, you must remember to contact people regularly and if possible invite them to other events or get together a group of people who might not have met before. Otherwise, it is very easy for both you to forget them and for them to forget you.

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What kind of money can you expect to make in your first 2 years freelancing?

post Category: freelance utilisation rates — admin @ 7:59 am — post Comments (0)
postFebruary 5, 2010
It is very difficult to predict exactly how much money you can make when you first start freelancing or you want to become a freelance consultant. The key is to be as ready as you can be for the kind of work you will be doing, the lifestyle as a freelancer and the business development focus needed.
 
The first question to ask yourself is exactly what kind of work would you be doing as a freelancer? What would your day to day activities be and what would your role on a project tend to be. Also, what kind of projects would you be working on? How much do those projects typically sell for and what percentage of that value would you be able to claim as a freelancer?
 
The easiest way to know this is to have managed or sold such projects when you were in full-time employment capacity. You really need to understand the economics of the consulting business you are currently working in. You will also have a better idea as to what you currently give to both employed staff according to their seniority or role in the company, and to freelance staff. You can you these calculations to work out what you would typically expect to make as a freelancer.
 
So the key determinants to work out what you can expect to make your first two years is the day rate times the number of days you will be working in your first two years.
 
Expected Day Rate
 
I have covered this in a previous blog post but you can calculate this by asking other freelance consultants doing the same kind of work you want to do what they typically charge and are paid. You can also survey other employers, ask agencies and go to freelancing forums and jobsite postings to get a rough idea of the range of money you can earn.
 
There is also a calculation you can do which is to work out the total value of your full-time pay plus bonuses plus benefits and divide it by 250 to get the lowest day rate you can expect. Multiply this by two to get the range of day rate available to you. Take the midpoint as an average. This is just a rough translation but you can compare this with the results of the survey of current freelancers and their employers to come up with a consistent figure for your expected day rate.
 
Number of Days You Will Work In Your First Two Years
 
Now, the agency mind bench told me that a new freelancer or freelancers in general can expect between 50 to 80% utilisation. This is of course dependent upon many factors such as are you any good at your job, the size and extent of your network, your soft skills, the state of the economy and demand for your kind of services etc.
 
However, assuming that this does hold true for you, the lowest utilisation rate would come in at 50% of 500 days (2 years working time) which is 250 days. The highest utilisation rate would come in at 80% of 500 days which is 400 days.
 
Making The Calculation
 
You would then multiply your day rate figure and the low and high utilisation number of days.
 
So, if your day rate was £600 then you could expect using our assumptions to earn between £150,000 and £240,000 over a two-year period. Remembering that your tax payment will be lower if you do this as a self-employed person or limited company rather than a full-time employee. Plus you can also subtract your expenses from taxable income.
 
Summary
 
I would like to be very clear here that I’m not promising that you can actually make this kind of money because a lot of it will depend upon your personal drive, quality and sometimes even a bit of luck. However, it does show you the potential you do have and you can compare this with your full-time employment earnings plus lifestyle to get an idea as to whether this makes financial sense for you to become a freelancer. Please let me know your thoughts on this.

 

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How can you find new freelance consulting clients

post Category: Finding freelance work — admin @ 7:29 am — post Comments (0)
postJanuary 29, 2010
This is the main question you will have once you have established yourself as a freelance consultant. The answer to this will vary according to the type of consulting work you do, whether you are working on your own or you have a team, the state of the economy, the strength of your current network of potential and existing clients and your skill set in terms of business development.
 
In this blog post, I will outline a few ways you can go about finding new freelance consulting clients:
 
1. Ask your existing network for consulting leads
  
The best way is to ask people you already know whether they know of any potential projects happening soon. There are many ways you can do this, one way is to put on your linked in page, an update saying you are currently looking for freelance work.
 
You can even specify the type of project you are looking for. You can send an e-mail to your Outlook contacts, you can make phone calls to your closer contacts or you can even set up meetings with relevant people and chat to them that way.
 
Now there are some things to bear in mind with this. You need to be a giver as well as a taker. If you have built up a network of people you know and all you do is asked them for work when you are low on income, after a while they will feel a bit annoyed and perhaps aggrieved that you are basically using them.
 
So, it is very important that you work with your network on a regular basis. If there are specific things you come across which will be of value to them, please do let them know. An example is when I went or when I heard about an event at the British library on entrepreneurship which had talks from many successful business leaders including the CEO of Lovefilm.com. I remembered that a particular new contact I had met was interested in vision and innovation consulting. I let him know about the event which immediately added value to him.
The way in which you will contact people in your network to add value to them will differ according to your relationship with them, their specific needs and requirements. For a lot of people on my network especially clients, all I do is e-mail them once a month with the status of my current availability. That is all they need and I do this whether I am in work or not. I also make sure to not contact them more than once a month even if I am desperate for work. Over the long term, they will respect this and not see my e-mails as a hassle to have to deal with.
 
2. Build up your existing network
 
I would say that the key goal is to always keep building your list of relevant contacts and relationships. I always think in terms of my spreadsheet and in fact this weekend and put in another 40 potential consultancy clients. Now, I got most of these names and companies through linked in. I have so many connections on linked in that when I did a company search for management and business consultancies I have thousands of companies I can connect with. This will only be possible however if you have connected with enough people on linked in. You need to work on this all the and ask everyone you meet in your industry whether they will connect with you on linked in.
 
There are many ways for you to build your existing network but I think the best way by far is for you to do research on who are the relevant potential clients for you. Using a logical thinking process, who other people and organisations who are most likely to use your kind of services based on your previous experience and expertise? Make a long list of 10, 20 or more potential organisations. These can be in the UK, Europe or elsewhere in the world. Then you need to work out which functions or which decision-makers within those companies would want to use you.
 
You then need to arrange meetings with them so that they can get to know you. Once you’ve done this, you add them to your original list of contacts and contact them regularly, trying to add value for them as much as you can until one day they will employ you.
 
Some of this can be a long process so the sooner you can get started with it, the better. You also need to do this regardless of whether you are working or not. It may mean having to make some sacrifices or having long long days doing both work and networking but it is a long-term return on this investment which is worth doing it for.
 
3. Get your name out in to the marketplace

 

This is another way for me to say do a lot of passive marketing. This means that when your target market or your clients do searches on Google for information on their respective area, e.g. logistics for roadside machinery or supply chain management in the pharmaceuticals sector, your name and your company comes up. Perhaps you have a detailed and high value adding blog with lots of information and advice for clients in the sector.
 
When your client receives their subscription of the industry trade magazine, you have a column in this magazine with detailed insightful and clearly thought out articles about the industry and where it is headed. This has a link to your blog and website.
 
When your client goes to industry conferences and seminars, you are giving a talk on the areas which are directly affecting him or her. When they attend the industry exhibition, you have a stall there and are also giving a free seminar or talk which is really well attended.
 
You also send out regular mailings such as a quarterly magazine or brochure positioning yourself as the expert but having a lots of high-value in there. You might send out DVDs or invitations to free or paid courses and training which will add value to them and help them in their business and making more money.
 
Plus whatever other ways you can think of which will make you become a brand. Instead of being just another consultant, freelance consultant or consulting company in your space and it just being a matter of who is the cheapest, you will become an authority figure and they will approach you rather than the other way round.
 
Or if you do approach them, they’ve actually heard of you or know about you which gives you much more credibility. Or if they already do know about you, they’ve had some fresh contact with you through a brand-new article or blog posting, there is more of a connection with you before you meet face-to-face.
 
With all of these steps, the lead time to getting a project could be long. The quickest way is to ask your existing network and if they know something immediately happening, it is not impossible for you to be brought onto it. However, the real value comes in a long-term and thorough approach to both building up your network, keeping in regular contact with them and adding value to them so that you are not just a user, and doing a lot of painstaking and regular marketing so that people know who you are before you even contact them.

It is like an actress friend of mine told me, she says to always send out regular quarterly mailings to all the casting directors because after a while she says you become embedded in their subconscious mind so that when there is a part for your kind of character, they almost automatically know who you are before they have even met you.
 
The same goes for you as a freelance consultant. The more regular value adding content and contact you have with your network, the sooner you have projects with them and the longer term those projects will be.

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Join The PCG – As Soon As Possible

post Category: Running Your Freelance Consultancy — admin @ 10:05 am — post Comments (0)
postJanuary 9, 2010
If you are currently a freelance consultant or are about to become one then I highly recommend joining the PCG. This is the Professional Contractors Group, the professional association supporting freelancers, contractors and consultants. Its website can be found at
 
It is a fantastic organisation which represents freelancers both on an individual basis and also on a national level in dealing with government and the relevant government departments to make life easier for us as freelancers.
 
I will let them do the talking with this text from their website 

Why people join PCG

PCG is the not-for-profit industry association that looks after the interests of freelancers, consultants and contractors.  The association is growing fast – currently over 18,000 members enjoy the benefits from just £120 a year.  This equates to an investment of just a few hours earnings per year.  In return, members who use the full range of resources find that membership pays for itself, many, many times over.  Some of PCG’s activities can save you thousands and even tens of thousands!  Keep reading to see why…

The benefits

Representation: creating a better working environment for you

  • PCG advises government on productive ways of incentivising the freelance and contracting workforce.  We also investigate cases of bad practice in the industry, collect evidence and follow up with appropriate action, for example www.ictabuse.org.uk.  The more members we have, the greater our influence.

  • Tax defence: professional expenses insurance to rescue you during a tax investigation

    Tax rules are like shifting sands and it is possible to make very costly mistakes. Our tax investigation insurance covers eligible cases up to £75,000 in cost (click here for policy details) but we have gone far further when there is a principle at stake – in some cases all the way to the House of Lords.

  • Advice & resources: streamline your business to save time and money

    When you join, you unlock the full PCG resource, including free tax and legal help-lines, contract templates to militate IR35 and other business risks, plus online forums and a regular concise update through our quarterly magazine, fortnightly newsletter and network of workshops. 

  • Promotion: growing the market for freelancing and creating opportunities

    We invest your membership subscriptions in educational programmes to create a cultural shift in the market, helping organisations understand the benefits of using freelancers and the correct way to manage the engagement.  We also provide a number of resources to help freelancers find work, including the PCG Directory where you can showcase your expertise to potential clients.

  • Community: exchange knowledge, find work, collaborate

    Network, debate and socialise on the forums and at member meetings. 

  • Savings: a supplier network supporting the membership

     PCG works with a range of suppliers delivering tailored services and discounts to the membership that can in many cases exceed the actual cost of membership.  This includes insurances, accountancy support, contract reviews etc.

    PCG’s aim is to be the voice of freelancing; to be the ultimate authority on all issues that affect freelancers. PCG wants freelancing to be valued and respected – not only as a legitimate choice for the working professional, but as a vital force for the UK economy.

 
I’m sorry if I’ve provided a sales pitch to you that I believe it’s so important to join is not-for-profit organisation especially for the tax investigation insurance and the free tax and legal helplines. There are also free detailed experts guides to pensions, family business tax planning, mortgages, and a detailed guide to freelancing itself. They also provide a regular freelancing matters magazine which includes a lot of information about what they are doing and also specific issues affecting freelancers as well as freelance business development tips. I have also been featured in this magazine, which is not however the reason why I am suggesting you join!
 
It took me over five years of being a freelance consultant to even know that this organisation existed. I would recommend you join straightaway if you have not already done so.

Lawyers For Your Freelance Business

post Category: Running Your Freelance Consultancy — admin @ 12:19 pm — post Comments (0)
postDecember 21, 2009
If you want to access a solicitor for any reason or just choose someone to represent you on an ongoing basis for your business, the Law Society website highlights a system where you can have 30 minute free consultation with one of the 1,000 participating solicitors in the scheme.
During this time, you can work out whether you need a solicitor and the exact costs which would be incurred.
 
The information is available at the following link:

Lawyers For Your Business is a network of 1,000 solicitor firms in England and Wales offering specialist advice to small and medium-sized businesses. 

To help firms access business-related legal advice, Lawyers For Your Business offers a free half-hour initial consultation with a solicitor in your area who is a member of the scheme. Advice can be sought on a range of legal issues including finance, taxes, employment law, contracts, company structure and health & safety. 

The initial Lawyers For Your Business consultation is free. However, it is important that you clarify estimated costs at the outset before you decide to proceed. You should ask for a forecast of how costs will change in various eventualities, for example, if a matter goes to court.  

Often businesses do not consult with a solicitor for fear of large legal bills, by which time any remedy still available is likely to be expensive. Early consultation is advisable if there is legislation to be complied with or important legal documents, such as contracts, to be signed.  

For a list of solicitors in your area who are members of Lawyers For Your Business, e-mail them at: lfyb@lawsociety.org.uk 

The website also offers free step-by-step guides which you can download:

 

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Focus on Cashflow – How To Improve Upon This

post Category: How To Become A Freelancer — admin @ 4:29 am — post Comments (0)
postDecember 11, 2009
In a freelance consultancy career, one of the absolute key things is to manage your cash flow effectively. If you are in full-time employment, things are much easier because you receive your salary on a given day and will have a lot of your costs paid by direct debit, which means a lot of things are automated. You don’t need to think about them.
 
The problem with freelance consulting is that you don’t necessarily have fixed employment contracts and if you do get a contract sometimes it can take months to get paid. So, here I will talk a bit about cash flow and how you can improve your cash flow situation. It is of use if you’re thinking of going freelance so that you can plan ahead.
 
1. Manage Your Costs
 
You need to first of all work on controlling your costs, both personal and business related. This is because your income can become a lot more variable. Also, as I’ve found out over the last seven years it takes a lot of discipline to really manage your costs, keep receipts and have everything entered into a spreadsheet etc.
 
One of the best ways to do things is to take your annual costs such as your annual tax bill whether corporation tax or personal tax, accountancy and insurance fees, savings and pensions and pay them monthly. Sometimes you can pay the beneficiary by direct debit. For example, this year I’m changing accountants and will pay them monthly by direct debit which I’m sure they will agree to. However, it may not be possible to pay the Inland Revenue on a monthly basis. So in this situation is worth having a business savings accounts in which you pay a monthly direct debit which approximates to your annual costs. I’m telling you when you come to have to pay your tax bill and you do not have the money in one lump sum that is a real headache.
 
Also, look at how you can reduce your costs and ask yourself whether you really need all your personal and business costs. During the last few months whilst consulting work has been affected by the recession I am really really investigated a lot of my costs and made a lot of savings. My quality of life has not necessarily suffered. Also some of my business development work is either very low cost or free, especially sending out e-mails and attending some of the networking events which are not that high cost.
 
2. Increase Revenues
 
A classic idea is to look at how you can generate more income. The first way is to see how you can do more of what you currently do. If there is a demand for your consultancy services, can you do more business development work to win new clients either inside your existing network or completely new companies. We have explored many ways on this blog such as looking at international markets will going direct to clients or indirect to agencies and consultancies.
 
The second way is to look at additional revenue streams. Can you add on additional products or services to your current offering? So for example if you do consulting services, could you also offer training or implementation services. You can also partner with other service providers and take a cut of their income because it is like an introduction fee. However you can package their services as part of your overall value add to the client.
 
The third Way is looking completely new products and services to what you are currently offering. Obviously, it needs to not interfere with your main revenue stream which is the consulting. Can you add an Internet based business, rent out property, investing in shares and bonds or run another business entirely.
 
The idea with all of this is to insulate yourself against peaks and troughs of demand in the consultancy market. It also may even be more fun depending upon your passions and interests.
 
3. Receive Payment More Promptly
 
This is a difficult one because often you are not at mercy to dictate the payment terms. However, you can try and work for companies which will let you charge 50% upfront for example. I did this on a recent consulting project and there’s no harm in you trying the same also. As you get more clients, you can try and work more and more with those who pay upfront and on time.
 
It may even be worth offering a discount to the client if they pay on time or early in fact. Obviously, getting payment through to your bank account directly is much better than the old-fashioned way of picking up a cheque in the post.
 
4. Saving As Much As You Can
 
Now, this step is probably the most difficult but also probably the most important one as well. When you are making good money and being on a successful project you must save as much of it as you can. Preferably a minimum of 10 to 20% if not more. There is always a problem that if you have been working on a project for a period of time, you start to price perfection into your future. This means that you think that the project will last forever or at least for a long time. It is a very seductive feeling and can happen even after you’ve struggled for a year or two but suddenly found yourself on a lucrative project.
 
Again, the best way to sort this one out is by having a monthly direct debit into your savings account for long-term savings rather than for business costs such as tax liabilities etc. If you are making more money on a certain project then you may need to physically carry out this transfer in to your account. You might be able to ask the accounting department of your client whether they could automatically pay 10 or 20% into a savings account so this is taken care of automatically for each invoice.
 
5. Rationalise Your Tax Liability
 
You will need to speak to an authorised tax adviser as to how you can position your accounts and services to minimise tax liability and hence increase your cash flow. Of course you must make sure that you follow legal and ethical practices in order to do this.

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Working out your relevant day rates

post Category: freelance utilisation rates — admin @ 6:06 am — post Comments (1)
postDecember 8, 2009
How can you work out what are the day rates you can and should be charging? When you have a lot of experience as a freelancer the market will tell you what you can and cannot request. I have now firmly found the level I can ask for when working for other consultancies. Previously, I would have asked for more but now I know where the market is currently at. A lot of this was trial and error, asking for too much and losing out on work and seeing what others were asking for in a similar situation.
 
However, if you are just starting out it may be hard to ascertain what level you should be aiming for. So in this blog post, I would like to discuss a few ways you can do this.
 
Survey other freelancers in your marketplace
 
Probably, one of the best ways is simply to ask other freelancers in the same space that you are going to go into as to what they can expect to achieve for their day rates. By the way, in freelance consulting jobs, the day rate is typically the way in which the fees are calculated. There may be projects which are open-ended in terms of scope and you are paid according to the results. If this happens, you should still work out the costs you are going to charge the client based upon the amount of days you expect it to take to achieve the results being asked of you.
 
Asked them for the typical rates or range of rates they can expect to achieve according to the type of client they are working for. If you can ask five different consultants in the same field you will start to get a good picture of what you can also expect to achieve if you become a freelance consultant. You need to obviously make sure that you are speaking with people at the same level of seniority and experience as you.
 
Survey current and potential employers
 
If you are currently working full-time for a consultancy or company which uses freelancers, you can casually ask your office manager or HR manager as to how much these freelancers are being paid. You can also do this with your contacts in other companies which could potentially hire you. This will give you some perspective as to what can be achieved.
 
Use a premiums calculation 
 
One way to achieve an understanding of what you can achieve in terms of day rate was explained to me by Richard Stewart, the managing director of mindbench.com a recruitment agency for freelance consultants.
 
He told me that in a given year there are 250 working days. You need to work out what is your permanent salary plus bonuses plus all benefits. What does that come to as a final amount. You need this figure worked out. Then divide it by 250 to come to the bottom end of the day rate you should be expecting to charge in the marketplace. So, if the total package you were earning as a full-time employee came to £100,000 including base salary, bonuses and benefits then if you divide that by 250, you would come to a bottom end day rate of £400 per day.
 
Richard then went on to say that you should expect between one and two times this bottom day rate. So, in the above example you should be expecting to request £400 to £800 per day, so an average of £600 shall we say. Obviously a lot of this depend upon the specific project in question, your seniority and experience and other factors.
 
It is however a nice way of coming to some conclusions as to expected day rates based upon the premium which clients will give to you as they do not need to pay National Insurance, tax and other costs when hiring you.

 

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Mindset Of A Freelancer

post Category: How To Become A Freelancer — admin @ 6:23 am — post Comments (0)
postDecember 4, 2009
One key thing which separates the success of a freelancer is their mindset. The absolute key factor is the need of working with uncertainty. When you are working full-time, you know exactly how much money you earn each month and when you will be paid. There may be of course some extra bonus available but ultimately you will be pretty secure and be able to plan around your income.
 
When you become a freelancer however, there is no guarantee you’ll get any work at all. As we have seen in a recession, your utilisation rate can drop dramatically. Also, you never really know where your next assignment is going to come from. Even when you are doing all the business development in terms of active and passive marketing and contacting in meeting many new clients, you still cannot guarantee when or from where the next project will come.
 
Can you cope with this? It is not just a financial risk but is also to do with your mindset. You need to also be able to deal with the lack of a team environment. For example, a lot of my time is spent working from home on my own which I love. My flatmates and family are often not around during this time. I absolutely love this when I tell other people, most people say they could not cope working in this way. Now, when you are working on freelance projects you may be assigned to your client offices that you may be moving around from office to office or working with different people all the time so there may not be a cohesive team unit for you to work with.
 
There are also some sacrifices you are going to need to make. One of the major sacrifices I have made it that I have lacked or lost out on many of the senior management roles within the kind of consulting work I do. Very often, I’m being hired to do a lot of the basic research work which someone of my age who worked full-time probably would not do any more. However, on many occasions I’m being paid way a lot more than the person managing me. So, there is a trade-off as to what you can expect in terms of career progression.
 
You might also be slightly limited as to the kinds of work you will be able to do or be given to do. There may be times when you will be expected to do the work either no one else is willing to do or the client does not have the internal capacity or expertise to do. You may also need to stand up for yourself if the client tries to put more work into the contract without increasing your pay. A lot of this can be quite flexible and many freelancers are so worried about losing the potential contract that they cave in to excessive demands. In many instances, as a freelancer it is essential to be willing to walk away in such circumstances.
 
So, one thing you may need to do is to speak with current freelancers and find out from them what the mindset they need is and how they developed it especially if they came from full-time employment in the first place. You then need to work out whether this mindset is something you are able to or willing to develop in order to become a freelancer.

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Utilisation Rates you can expect to achieve

post Category: freelance utilisation rates — admin @ 8:15 am — post Comments (0)
postDecember 1, 2009
A major question many prospective freelancers have is how much and how often they can expect to work. The best way of measuring this is the utilisation rate. There are approximately 250 working days in a year and the question is as a freelancer, what percentage of this time can you expect to work  if you become a freelance consultant. This is called the utilisation rate.
 
Now, I spoke with Richard Stewart from Mindbench, the freelance consultancy recruitment agent and he was saying that most contractors can expect to have between 50 to 80% utilisation over a year. However, this is not guaranteed and of course can vary significantly from person to person. The key reasons for this variation are how good your skills are, your level of expertise and experience in this area, the demand for such services both overall and on a freelance basis and your level of soft skills.
 
I was quite surprised when Richard actually mentioned soft skills. We are always conditioned to think that the person with the best technical or analytical skills will be the best freelancing contractor. However, there are many skills needed to actually get the job in the first place. These include the ability to develop and maintain a strong network, find new clients and when working on projects the ability to mingle with other people in the company and leave a good impression so that you are considered for future work.
 
These are all things to bear in mind but ideally you should be going for a minimum of 50% utilisation. Some of my best years in terms of revenue have seen me be at 60% utilisation.
 
The point of being a freelancer is that you do not need 100% utilisation to have a fantastic income because you will be earning a premium compared to working full-time. So, if you can work out the average day rate you can expect to achieve and multiply this by 125 days, you will hopefully have set the minimum amount of money you will earn in a given year. Times the average day rate by 200 and this should give you the maximum income you can earn in a year.
 
However, you do have to be realistic and realise that in a recession for example your utilisation rate could drop down to 30 to 40% utilisation and also lead to reduced day rates because there’s more competition from formerly employed people. However, over the long run, over the period of the decade this should smooth itself out and you will hopefully find an average level of utilisation.
 
To increase your utilisation rate you will need to do much more business development, marketing and networking to find new clients. You need to avoid the temptation of just working for one client continually in a year. Obviously you must never turn down work but even if you are being fully employed for a long period of time you’ve got to keep up your business development and network with other future potential clients to guarantee you high utilisation rates in years to come.

 

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What are your goals as a freelancer?

post Category: How To Become A Freelancer — admin @ 5:53 am — post Comments (1)
postNovember 27, 2009
This week was National Freelancers Day so it is a good time to take a step back and reflect on why you either are a freelancer or want to become one. Especially with a year like the one we have had.
 
I had a discussion a while ago with Richard Stewart, the Managing Director of the consultancy recruitment agency Mindbench. He alerted me to a study conducted by an interim management agency Russam GMS which said that only 30% of interims would be interested in staying freelance for ever. Another 20% would never go back to full-time work unless the offer ‘was too good to refuse’.
 
So this got me thinking. What is your reason for going or wanting to become a freelance consultant? Why are you doing what you doing?
 
It is very important to work this out in advance so you can start planning your business development and working lifestyle around this. If you know clearly what kind of work you want to do and in what situations, you can tailor your searching for companies in advance. You can also be very clear with consulting clients as to what you can and cannot deliver. Or better said what you will or will not do.
 
Type of Work and Projects
 
One of the most important decisions you have is the type of work and projects you want to do. Obviously when you’re starting out you may have to compromise slightly and take what you can get. However, in the longer run the aim is for you to do the kind of work you enjoy and are the best at. So, whether this is working in a particular industry or a particular function, the opportunity is there for you to do this. You do need to work out how can you get the experience and contacts needed to succeed in your chosen field. It may mean doing some training or attending networking events within this particular area if you do not currently have a lot of experience there.
 
You can always say no as a freelance consultant in situations where you would not be able to decline a project if you are working there full-time. An example of this came late last year when I was offered a very lucrative and easy to do two month project. It was with a new client and would have gotten me good exposure. However, the project was in the tobacco industry, helping a new brand enter into Eastern European markets. I was unwilling to work on this and it did cost me future business with this client but at least I had the opportunity to walkaway.
 
Location and Geography
 
You also have the opportunity to decide where and even when you want to work. A lot of freelance consulting can involve travel but again you can decide where and when you want to go. For example, I was offered a project in Saudi Arabia. However, after doing my research I found out that it would be an uncomfortable place to go and live and the client was looking for a full-time position. Once more, I could say no.
 
It is important for you to decide in advance the kinds of travel you are willing to do or in fact want to do. You can then tailor your business development and when you are meeting clients for the first time you should tell them these are your expectations. Obviously, it is better to be for more flexible than less flexible but if you know specifically what you want it will be easier for the client to allocate you work which suits your requirements.
 
Prospective Income Needed
 
The other thing is to work out how much money you need or want to achieve in a year. You do need to be realistic and compare this with your current full-time salary to see whether it is in fact achievable. You will need to do some research to find out the levels of pay available for freelancers as well as the market. Are people in fact hiring freelancers or is the trend towards full-time employment. You need to know these things in advance. In a future blog post, I will be explaining some methods as to how you can ascertain what your prospective day rate could be.
Right now though you do need to have an idea as to how much money you will be requiring in the near future. This will tailor how aggressive you need to be in terms of building your network of potential freelance clients and of course in terms of your regular business development work.
 
How Long Do You Want To Freelance For
 
What are your ultimate goals? This is perhaps a better question. Is being a freelance management consultant what you want to be doing until you retire? Is it just as a means to help you find your social, charitable or alternative career? The answers to these questions will determine how many hours you ideally want to spend freelancing each week and whether freelancing is simply a stopgap before finding a new career or full-time job.
If you are looking to get back into full-time employment then you can tailor your freelancing to get into the kinds of companies you want to work for. Employers are more likely to hire people they know or have had experience working with in the past so if you can get a freelance position in the company and role of your choice, then that is more likely to lead to a full-time job. I’ve been asked many times whether I wanted to go full-time with different consultancy clients. However, my own goals require me to be freelance. I may consider going full-time if it was for a job which would teach me a lot or get me into a new career and I would consider that to be a training period rather than a full-time job.
 
Summary
 
If you are looking to get into freelancing please ask yourself the above questions and find out in advance why you want to do freelancing and what kind of freelancing work you would most enjoy. It might not always be possible to get exactly the kind of work you want but if you have an idea this will give you a better chance of getting it.

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