You may also find our guide to Accounting for Freelancers helpful.
It’s vital on day one that you decide which business model you want to adopt. There are two options, each with their own pros and cons.
- Provide your own particular service for a set hourly rate
- Function more as a company would, managing an entire project on behalf of a client, buying in additional expertise/materials if required to deliver what they need – and then marking these services up and selling them on in order to generate additional revenue.
The main benefit of option two is a financial one, whereas the main benefits of option one are a simpler business model, no cash-flow issues and less liability if things go wrong. If you do choose option two then a limited company is almost certainly going to be your best bet, but you should still take advice from an accountant to be sure. Click the following link to find out more about the differences between operating as a limited company or as a sole trader.
The other factor to consider is whether you would be happy to work on your client’s premises as an employee would for a fixed period of time, or a set number of days per month – or whether you prefer to work from home. This latter option gives far more flexibility to work with multiple clients simultaneously and is generally what is known as ‘freelance’, whereas working on client site would be more of a ‘contract’ arrangement.
If you do end up working on a contract basis, then SJD can still provide all of the support you need. For example, whether or not the work you are carrying outfalls within IR35 legislation and what the implications of this would be.
If you have any questions about freelancing or would like any further advice please either contact our New business team on 01442 275789 or e-mail firstname.lastname@example.org
Click on the links below to read our more detailed guides on freelancing.