Did you know that around one million Australians are engaged in some type of freelance work? With technology making remote work possible for more people and the gig economy going strong, it seems that freelance work is only set to rise.
But exactly what is freelancing? If you’re not familiar with this type of work you might be wondering what freelance work entails and if it would work for you. In this article, we cover different topics related to freelancing, explore freelance work options for graduates, and compare the differences between freelancing vs a regular full-time job.
A freelancer is an independent worker who provides their services on a contract-by-contract or project-by-project basis. They are self-employed and offer their services as a business, with an Australian Business Number (ABN) from the Australian Tax Office (ATO).
Freelancers are in charge of everything to do with their work. They negotiate their own contracts, set their own rates, do their own invoicing and are paid directly from their clients. At the end of the financial year, they have to figure out their own taxes, too.
Freelancers are responsible for their own work schedules. They can usually set their own hours, but may take on contracts that require them to work with clients or be contactable at specific times. Freelancers don’t get holiday pay or paid leave. Depending on the type of work, they may be able to work from home, while others may be required to work onsite or in an office.
This differs from remote work, as remote workers are often permanent employees of an organisation, with all the benefits and requirements that entails. Freelancing also differs from entrepreneurships, as entrepreneurs generally aim to scale their businesses by hiring employees, while freelancers work as a single entity.
Freelancers do all sorts of things across a wide range of industries. The term is often associated with writers, graphic designers, programmers and photographers, but you can freelance in practically any role: as a translator, project manager, event planner, personal trainer, accountant, business consultant, health care practitioner, landscaper – the possibilities are endless.
Aside from having skills in their chosen field, freelancers must also be skilled in running a small business. They need to be organised, have good time management, be motivated and self-disciplined, be resilient, be a good communicator and have basic accounting skills. Being your own boss comes with a lot of unexpected responsibilities.
The pathway to becoming a freelancer is not the same for everyone. Some people find opportunities organically after working in their industry for a few years. Others have full-time jobs while dabbling in their freelance work as a ‘side hustle’. If you’re interested in becoming a freelancer, here are some different routes you can take.
The first step is deciding what services you’ll offer. Every freelancer has to have a skill set they can leverage to provide goods or services that people want to buy. Identify your most marketable skills and a potential customer base.
Think outside the box in terms of your skill set – you don’t necessarily need formal training or experience to be able to freelance. Content creator, virtual assistant, dog walker, transcriber, tutor, cleaner and handyperson are all roles that require no formal experience to break into as a freelancer.
The next step of starting your freelance career is to create a business plan. Plan out the weeks and months ahead of you, including budget, marketing and networking, with milestones to track your progress. If you’re relying on freelancing as a sole income, have a back-up plan so you don’t have to deplete your savings.
Before you start out as a freelancer, make sure you’re aware of your legal and tax obligations. Visit the ATO website for information on applying for an ABN and registering for GST, if your yearly earnings will be above $75,000.
Consider hiring an accountant to help you put the right amount of tax aside and work out what expenses are tax deductible. As a freelancer, you won’t receive a PAYG slip or group certificate, you’ll have to calculate your own tax. You should create a template for your invoices and track all your payments and expensies. It can be worthwhile investing in accounting software to keep your finances organised.
We’ve covered what is a freelancer and what does a freelancer do, but how does freelancing compare to a permanent full-time job?
There are many advantages to freelance work – more flexibility and independence, for example. It might be a tempting proposition for those who feel constrained or bored by regular full-time work. The prospect of being your own boss and choosing your own clients and projects (and working hours) may also be enticing.
However, there are also downsides and challenges that come with the freelance lifestyle. For example, there may not be job security or income stability if you’re doing smaller contracts or projects. You might feel more pressure, as all of the responsibilities of the ‘business’ fall on your shoulders. It can be harder to find a happy work-life balance as a freelancer, as your personal and professional lives tend to overlap.
It’s important to weigh up the pros and the cons of this type of work before deciding whether or not it’s right for you.
Work hours
Income stability
Job security
Flexibility
Benefits and super
Career growth
Work environment
If you feel like a freelance career could be right for you, it’s important to make sure you have a good foundation before jumping in. As with any big career decision, research your options, get advice from other freelancers or a mentor and make sure you have emergency savings. It may take time to find a steady stream of work, so be prepared to network and market yourself extensively at first.
Many freelancers transition slowly from full-time work into contract work. This makes it possible to gradually accumulate clients until you can financially support yourself with only freelance work. As you do more freelancing projects, create a portfolio or gather testimonials from clients that you can leverage to get more work down the track.
One of the biggest challenges of working as a freelancer is finding steady work. It’s always easier to keep a client than it is to find a new one – here are some tips on how to maintain long-term client relationships and find new work when you need to.
Freelancer platforms can be one way to generate new leads as they can connect you with clients specific to your field and the services you provide. Networking, as always, is also a valuable tool. Go to industry and networking events, join groups, be active on forums and reach out to contacts, offering your services and asking for leads.
No matter what services you provide, it’s a good idea to have a website where you can showcase past projects and list your services. A portfolio, testimonials and examples of past work are an essential part of marketing yourself as a freelancer. New clients will want to see proof of your abilities before they offer you work. A portfolio should showcase examples of your best work, showing a range of things you can do/provide, with a short explanation of the project.
As a freelancer, you decide how much to charge your clients. Different ways of charging clients include:
It’s important to set fair and competitive rates that are aligned with market standards. To find out the general rates for your line of work, you can consult other freelancers, research freelancing platforms or ask people in your clients’ demographics.
In most cases, clients will have a set budget for the services you provide, so while there may be some room for negotiation, don’t expect to dramatically raise your rate. Negotiating a lower rate may open the door to more regular work, providing some income stability.
No matter what rate you set, remember to review it regularly to keep it in line with inflation and your increasing level of expertise. Make your clients aware of any upcoming increases in your rates, so they can plan accordingly. It’s a good idea to increase rates at the start of a new year or financial year.
While the advantages of freelancing are widely known, the disadvantages are less obvious. Here are some of the pros and cons of being your own boss.
Some of the many advantages of being a freelancer are related to having more freedom. They include:
Working as a freelancer also has challenges. Being your own boss means all the responsibility falls on you. Here are some of the main cons of freelance work:
The stress of finding freelance work can be reduced by offering services that are always in demand. To have the best chance of succeeding as a freelancer, find a job you’re good at that people will always find a need for. Content producer, disability support worker and accountant are just a few examples of roles that are in high demand.
Every industry has a niche, so it’s worth researching which niches in your chosen field command the highest rates. It might mean you have to undertake special training to gain the relevant knowledge or skills, but consider this an investment in your business. If it’s to help you get work, it should be tax deductable.
To identify lucrative niches, search on job platforms to see which roles appear most often that have high salaries or hourly rates. Ask your peers and professional network what services they consider hard to find or overpriced.
As a freelancer it’s up to you to manage all aspects of your business. Here are some aspects of managing a freelance career you might not have considered.
One of the hardest parts for new – and seasoned – freelancers is managing time effectively. As a freelancer you may feel obligated to take every job offered to you as a way of ensuring income. Even if you’re more selective with projects, you may find yourself juggling several projects at once.
Time management is an essential skill to have as you organise work around other commitments, factor in unexpected delays or revisions, and deal with any increases in scope. To help you plan your time, consider using apps or tracking software. Logging the time you spend on projects will also help you estimate and adjust rates for future jobs.
Time management is just one aspect of managing a freelance career. Here are some other issues that most freelancers have to deal with:
One of the best outcomes for a freelancer is having so much work that you need to scale, or expand, your business. If your freelancing career takes off, you might find yourself edging into entrepreneur territory.
Some freelancers are successful enough to transition into business ownership, starting their own companies and hiring other freelancers – or full-time staff – to support them. As a business owner, you might take a more strategic or leadership role, overseeing work, while employing people to help with administration, invoicing or entry-level services. Operating as a small business with a good reputation, you can start to charge significantly more for your services, as clients are prepared to pay more for what they perceive is lower risk.
Many freelancers choose to diversify their services in order to increase their earning capacity. This might mean additional training or upskilling in a related field. For instance, an electrician might diversify into solar, a content creator might diversify into photography or video editing – if you set up a variety of different income streams you can better overcome the irregularity of freelance work.
Brand building is another tactic that can help grow a freelance business. Brand building includes leveraging social media for more visibility, posting content related to your offerings, creating a website or launching a blog, attending industry events and marketing through emails and digital ads.
Freelancing is likely here to stay, as workers prioritise flexibility, and technology makes more types of jobs accessible to contract workers. As more people offer freelance services, we may see companies trending towards employing contractors over permanent staff, as it offers more flexibility and can reduce costs.
There are many trends affecting the freelance landscape, including technology, the gig economy, corporate interest in AI, automation and social media. Here are some trends we might see happening in the coming years:
Freelancing is an appealing career path for many. It allows you to be your own boss and dictate your own day-to-day schedule. With self-discipline and a good business plan, you can take your skill set and turn it into a successful and fulfilling career that’s 100% under your control.