Freelancing work is attractive because you can decide your own hours, the day rate is usually much higher and once you have established yourself you can decide what work you take on, rather than being told what you have to do by your boss. Ideal, right?
Whilst freelancers can have an enviable lifestyle, it's also important to remember the difficulties that can arise from being your own boss. The bottom line is that if you don't work, you don't get paid. No sick pay and no paid holiday leave. This means that you have to set your rates accordingly and for this you must understand your worth as a freelancer.
When calculating your salary worth, there are five moving parts to consider, as outlined by Justin Etingtonis, the founder of Fame Tag and Volt Marketing:
Experience: How long have you done what you do? What kind of results have you yielded? Who have you worked with and what has that experience taught you? What effect does your work have directly on ROI?
Education: Do you have the intellectual training and background to make you successful in your field? Have you been rigorously tested academically to ensure you can solve difficult problems?
Industry: What kind of salary and compensation is generally paid out in your industry?
Role: How essential is your position? What kind of competitive pressures are likely to increase or decrease monetary demand for your skills? What are the barriers to entry to learn what you know?
Intangibles: Do you have the interpersonal and leadership skills to make you a desirable freelancer or employee? Have you learned the discipline and responsibility it requires to achieve results in a team? How well do you communicate, organise, follow-up and think creatively?
Freelancing work can be incredibly fun and you can make a successful business from it, but you have to be careful to prepare for periods of low-earnings that can arise from the turbulent gig economy.
For further information, the IPSE provides advice on how to set up as a freelancer and has practical guides including tax and health insurance advice.
