CIPD (Chartered Institute of Personnel and Development) predicts that in approximately 10 years time half the workforce will be contractors. Why? It’s no secret that the world of work is changing rapidly. There are many factors having a huge impact on our lives in general. For many reasons companies need even more agile and flexible workforce to cope with these fast-paced changes. What is the gig economy? The Gig economy is either a contractor or freelancer or a sole trader / limited business.
Employers need highly talented individuals to manage the changing and dynamic work environments. Highly talented and skilled individuals come at a price and are usually in high demand. Therefore, companies will generally hire these individuals on a short-term basis. They may indicate a period of time, 3 months, 6 months, 12 months.
We’ve seen the demise of some very large businesses over the last decade. Mainly due to their business models being out of date or taking big risks: Lehman Brothers, Woolworth, Kodak, Blockbusters, Colemans and Carillion to name a few….
Know your ideal client
So many small businesses make the mistake of not narrowing down their ideal client. Their client profiles may be too board. They may be worried about narrowing down because they feel they’ll turn away customers that they could have worked with.
Having a very clear idea of your client will save you valuable time and potentially lots of money (marketing, advertising etc.). If you don’t have a good idea of your ideal client you could potentially be spreading yourself across several social media platforms that are not getting you closer to your client. This is not a good use of your precious time. Time is the biggest factor against someone starting up in the self-employment market.
Really understand what makes your clients tick. Understand what problems they need resolving. Casting your net wide is not a sustainable marketing strategy for large organisations with deep pockets and a big budget. For small businesses or sole traders it’s not going to work. A well defined ideal customer will help you craft and deliver a clear message and attract the right people.
Before you start writing your resignation letter it’s critical to do your homework and research the market. I’m a big fan of Dragons Den!
“You may have found a gap in the market. BUT is there a market in the gap?” – Mr. Touker Suleyman
- What do you want to learn about the market?
- Is there a need for your product or services?
- Even if there is a need, is there a willingness to pay for these products and services?
- Are there enough people to bring you a constant supply of clients in your location?
- Do you plan on exchanging your time for payment?
- How many clients will you need to make enough money?
Conducting research is a really important stage before you make any decisions to quit your day job. Here’s a fantastic guide, which provides everything you need to know to be successful as a freelancer, contractor or self-employed.
This guide is for skilled professionals thinking about making the leap into freelance work, and it’s also for current freelancers interested in understanding best practices.
You’ll find information on a wide range of topics relevant to all types of flexible work: registering as a business and managing personal finances; marketing your services and finding engagements; pricing your rate and collecting payments.
This is a particularly challenging aspect to consider. You’ve held a job for many years and you know your worth in the jobs market. You have increased your salary throughout your career and you know where to look if you need to check you’re on target.
The risk here is pitching too low. Time is money in business and no more so than when you are self-employed and running your own business.
Let’s suppose you are considering charging £60 per hour. Sounds like a good hourly rate right? Have a look at the example below:
Example: Coaching a client:
- Free 30-minute consultation: Your opportunity to first understand the client’s issues or problems and offer reassurance that you can help them. It’s also the potential clients opportunity to check if they want to work with you.
- The client agrees to hire you as their coach: There’ll be some preparation on the session agenda and content prior to the coaching session. If you are delivering training, there is likely to be some design time. You can of course factor this into your fees.
- Coaching session will usually be between 1 to 2 hours depending on agreement.
- Some coaches will provide after care services. Such as write up notes and produce a report of recommendations or feedback.
If you’ve spent a total of 3 to 4 hours with a client and you’re charging £60 per hour. You are hardly getting the National Minimum Wage. This is a problem.
Think about all the employment benefits you’re giving up to become self-employed (no sick pay, company pension contributions, life assurance, holiday entitlement and the list goes on…..).
On the positive side, if you work at home there’s very little over heads and you’d be paying the usual bills anyway.
If you’re sensible you’ll need to address all of these in your financial planning. Now £60 per hour doesn’t actually look that attractive does it?
Networking isn’t a new activity and word of mouth has always been very powerful. We now have the advantages of networking online which allows us to get our message out to a bigger audience.
I was networking back in the late 80s before I knew what networking was! In fact, word of mouth was one of few options back then. I’ll help you understand if you’re a millennial – no mobile phones, we only had landlines but no 1471 facility back then, no emails, no text messages and definitely no internet – get the picture! We had to go out and knock on doors!
Started my working life in the cleaning, catering and retail sectors and worked in several shops in Colchester Town, cleaned countless business premise (Western Trust Building Society, Williams and Griffin, Top Shop, Face and Fitness, Rainbow Insurance.) I cleaned the homes of several Essex University Lecturers and Professors, a Pilot and Lawyer etc. Word of mouth was very powerful. It was a privilege to be trusted with the alarm combinations, keys to people’s homes and trusted to collect their children from school.
There are several hundred social media platforms available. Social media to suit every hobby, interest, product and service. The key is to select the right one to find your clients. This is why it’s so important to understand your ideal client. Then once you understand (intimately) your client, you’ll know where they hang out. You may even know when they are online, how they think, what they do in the evenings and weekends etc. etc.
This is trending at the moment. What is a portfolio career? It can mean several different things depending on what site you look at on Google. Or it could mean having several part-time jobs for different employers rather than one full time job. It can mean managing several contracts or assignments with different employers or clients – working freelance or self-employment.
It also means not pigeon holing your business consultancy as a one-dimensional offering. Here a perfect example, I know a business associate who’s a Career Coach, Corporate Leadership Trainer, Writer and Author, Public Speaker and also travels to France regularly to offer Guided Tours. She is using all her skills, capabilities, interests and passions to build a really versatile business with several income streams. Clever lady!
Are you considering going self-employed? Do you want to set up your own consultancy? Before you quit your day job, start networking with other businesses and sole traders. You can never network too early. Even better to start networking before you set up your business. It’s not a good idea selling to people you don’t know. So, the fact you haven’t got anything to sell at that point is really good. Just network to learn. Find out how people have succeeded. There are lots of networking groups that have an element of learning and development.
There are lots of things to think about and set up when you are new to business.
- Book keeping systems and accountancy
- HMRC and Companies House registration
- ICO registration and GDPR
- Website and social media platforms
- Learning how to use Mail Chimp, Hoot-suite and Eventbrite
- Public Liability Insurance
- Marketing and business development strategies
- Finance and loans
All before you’ve even got a paying client or two….
In the first six months of being self-employed I attended every network group in Essex and some in Suffolk. It was a massive learning curve. It wasn’t all positive either but it was really useful. You will make some great contacts. You’ll also learn how to filter out those that aren’t such a good synergy for your business.
It’s important to do your research and find out as much as possible before giving up a full time job and most importantly that full time income.
Here’s a great guide to take you through the important steps on the journey to self-employment. The Ultimate Freelancing Guide
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