Working the gig economy? Here are some business tips to remember
With the economic crash and slow recovery, many people who couldn't find work otherwise started freelancing. While the economy recovered, many have chosen to retain the freedom that freelancing provides. It's expected that within a decade, over half of the workforce will be freelancing. But it's not easy.
Here are some tips to help you transition from employee to freelance.
Start with savings. Because building a customer base takes time, it's vital to have at least six months of expenses saved to cover bills. This includes loan and credit card payments (which you'll want to pay down as much as possible ahead of time), but should also include travel, clothing, utilities, rent, food and all of your business expenses for that time period.
Have a plan. Though you can try to become a freelancer by simply picking up work online, how will you keep those clients coming back? How much will it cost for every dollar you bring in? What's your weekly, monthly, quarterly, annual and 5-year plan for your business? By taking the time to write out a business plan, you can keep your activity in line with your end goals.
Transition, don't jump. It's tempting to just kiss your day job goodby and dive into freelancing. Don't. Take your time and start working your freelance business during non-work hours until you've hit the point that your freelance income exceeds your employee income. Remember that you may have changes in your expenses, such as lower commute costs but higher internet service costs.
Plan for taxes. You'll have different expenses to track and taxes won't just automatically come out of your paycheck over the course of the year. You'll need to figure out how often and how much you'll pay in taxes over the course of the year. If you're not good with paperwork, use an organization app like Evernote to keep track of income and expenses.
By keeping on top of these issues, your transition from being an employee to a freelance worker can go very smoothly with very few hits to your budget or finances. If you need help developing a business plan for your transition, AccountRely is here to help. Please feel free to contact one of our experienced business professionals today to get started.