When you decide to make the jump from full-time work to freelancing – also known as contract consulting, and sometimes interim – it’s important to make sure that you’ve set yourself up in the correct way and that you’ve thought through the practicalities of life as a freelance consultant?
Here is a list of essentials recommended for you...
1. To work as a freelance consultant, you need to set up as a sole trader, limited company or join an umbrella organisation - it’s quite easy to do yourself.
2. Set a range for the day rate you wish to charge. It’s important not to be too rigid with a specific rate and remain flexible. You might, for instance, want to set a lower rate for a longer piece of work. It’s always worthwhile scoping out new projects, overlapping what you know, with what a client wants, and then being able to justify why you’re charging a specific rate. Do you bring something extra to the table? Specific skills, relevant domain knowledge or flexible working arrangements – all these things can help you achieve a higher rate. We’ll cover the different things to consider when setting a day rate in a future post, but for now it’s worth sticking to the golden rule – you should be paid for what you’re worth!
On this note, one consultant was once told that his day rate should be his previous salary divided by 100. Why 100? Because it takes into account the fact that you – as a freelancer – receive no benefits (paid holiday, pension, bonus, healthcare, etc. etc.) and also risk not being able to work 240 days a year (for ‘full time’ pay).
Oh, and remember, a day rate = a defined length of day that you should agree with your client. You should work what you’ve agreed (not hours and hours into the night beyond your agreement; but note, a little bit of flex is recommended)!
3. Make sure you have the correct insurance in place before starting a new project, and always clarify with a new client what type and value of insurance they require.
4. Are you up to date with your current/former employer’s non-compete policy and what, if any, restrictions you may need to observe? This is essential!