GET THE FOUNDATIONS RIGHT FIRST
So, you have decided to start up your own freelance business. But what do you need to do to make sure you comply with relevant rules and regulations?
Below is our quick-start, step-by-step, guide together with links to companies we have found that can provide the services you need. Many have kindly offered to provide the BIM Experts Directory users with good discounts.
If you want to speak to experts about setting up, we recommend joining ipse (the not-for-profit Association of Independent Professionals and the Self-Employed). They don’t just provide useful start-up advice , they will help you growing and protecting your business too. If you join, you can get a healthy discount if you use the BIM Experts Directory.
THE STEP-BY-STEP GUIDE
STEP 1: WHAT IS YOUR OBJECTIVE?
Think carefully about the service you want to provide and how much you are prepared to let it impact on your personal life. Is this a stop gap solution until a full-time opportunity excites you, the first step towards building an empire or, as Hamel Tailor says in his article, simply a better way of balancing work and life. Your answer to this question should influence your answers to the following steps.
STEP 2: WHERE WILL YOU DO IT?
If you’re going to be a homeworker, you must contact your local authority to find out whether you need to pay any business rates. You should also take into account that working from home could have implications on your mortgage, home insurance and even your tax situation. It’s not necessarily as straightforward as you might think, so check things out before you proceed.
STEP 3: WHAT TYPE OF BUSINESS?
When setting up, you need to decide if you’re going to be a sole trader or a limited company.
One of the biggest advantages of being a sole trader is that it’s simpler to register and involves far fewer administrative and tax headaches on a day-to-day and month-by-month basis. There are no setup costs, and your accountancy fees will be much smaller than if you were a limited company.
While operating as a limited company does mean extra workload and higher accountancy fees (unless you consider using something like Crunch.co.uk), it also brings potentially bigger tax benefits in its wake. It also protects your assets against company debts, which means that if something goes wrong with your business, you won’t lose your house because of it. It also opens you up to working with the many clients who will only employ freelancers who operate as limited companies. Many freelancers become a limited company for precisely this reason. Your accountant will advise you. See STEP 5.
Note: If you are freelancing as a stop gap there’s little point going to the expense of setting up a Ltd. Co.
STEP 4: BUSINESS NAME
Your business name, obviously, is a reflection of your service. It requires thought and should align with STEP 1. No point calling yourself ‘THE GLOBAL SOLUTION TO BIM’ if you want to be working 3 days a week from your shed in Barnstaple.
If you’re a sole trader, do some research to make sure your trading name is as unique as possible.
If you’re a limited company, you must check that your proposed name is unique and available free via Companies House.
If you’re going to have a website (and you should), check available domain names via any of the domain name registration sites, like names.co.uk. For SEO purposes, consider adding in your key service to the domain name.
STEP 5: MONEY
Get a good Accountant. They are worth the investment. They can explain the benefits of self-employed vs limited company, help you set up the right trading entity, make sure you are complying with tax, NI and VAT regulations and organise everything you need to sort your statutory returns all while you keep earning money.
There are some excellent online accountants now who can tailor the service to suit you and your budget. Crunch.co.uk is a good example and you can get an introductory discount via the BIM Experts Directory.
You’ll also need to set up a financial bookkeeping system to keep track of all your invoices and payments. You can make life easy with any of the accounting software being advertised. Your accountant may will advise on which they prefer.
Get your accountant to advise you on setting up a separate business account. It looks more professional and it helps keep invoices and payments in order.
Note: if you are not setting up as a Ltd. Co. and you want to be paid PAYE, some clients will only want to pay you via a Ltd. Co. You can still do this if you use an agency or an umbrella company.
Always go with a reputable agency that your client trusts, like JohnsonBIM.com who have been payrolling freelancers in the construction industry since 1992.
For reputable umbrella companies, you need to find a good one. The BIM Experts Directory has teamed up with the FCSA who rigorously vet members to ensure they are providing the best quality service and abiding by the latest regulations.
STEP 6: GET INSURANCE
Professional Indemnity? Public Liability? Employers’ Liability? Directors’ and Officers’ Liability? Personal Accident Cover? What do they all mean and what do you need? This is a complicated area and you need the right advice from the right experts.
The BIM Experts Directory have teamed up with Kingsbridge Contractors Insurance. Their insurance package has been specifically tailored to meet the demands of freelance professionals. You can get up to 10% discount via the BIM Experts Directory.
We have also teamed up with ipse – the Association of Independent Professionals and the Self-Employed. Membership (£50 discount if you join via the BIM Experts Directory) gives you specialist advice and discounts on insurance, tax and much more.
STEP 7: PROTECT YOURSELF
Make sure you have the right contracts to use to protect yourself from being taken advantage of – and to show clients you are professional. We have negotiated a substantial discount with one of the expert legal advisors for freelance workers – you can download Labvolution’s standard contract and services agreement at the BIM Experts Directory.
IPSE also provide a legal hub as part of their membership benefits package.
STEP 8: BRANDING
A visual identity is a good idea if you intend to freelance long term. Get a website and a logo. There are plenty of online website solutions now but we recommend J-Media for getting your website setup and running properly with minimum pain.
Logo design. If you’re on a budget, you don’t need to commission a graphic designer yet. If you are creative you can do it yourself free with logomakr or pay for Adobe Illustrator or use any of the affordable online designs from the likes of Graphic River and placeit
STEP 9: MARKETING
The biggest challenge with freelancing is keeping work flowing. Historically, the biggest problem with being self-employed is there’s only one of you – at least in the early days. if you were working you weren’t generating new leads and vice versa. The BIM Experts Directory is your virtual marketing department. Keep your listing live and clients will be able to find you and offer you work. Even if you are too busy, they could be a client in the future – so follow up all leads and create your own marketplace.
When you want to go big and attract more clients, you should get advice from a marketing specialist like Gemma Routledge and explore the potential of social media. If you want to get social media working for you, go to the experts like J-Media.
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