The decision to leave your job and become a freelancer is one that shouldn’t be taken lightly, particularly when it comes to financing. Even if you’re lucky enough to have built up a solid amount of savings before you begin, it could be a while before you are earning anything close to what you were earning in your previous job, which can put a strain on your income and fill you with stress and anxiety.
Fortunately, there are several ways in which freelancers can launch their careers successfully and with their financial situation in a good place. Below are six great ways to pay your way as a freelancer until your clients are doing that for you:
Take a Part Time Job
There’s nothing wrong with taking a part-time job to supplement your freelance income, whether it’s short term until you have enough clients to ditch the job or a way to meet people while earning a bit of extra cash. It can be quite lonely as a freelancer (although, some like this aspect of the job), and if you’re a sociable person, a part-time job can help to keep you social outside of your freelance working hours.
If you are going to take a part-time job, you can use these finances to purchase equipment, web hosting for your website and anything related to the business, while your freelance earnings can be used for the everyday tasks such as paying the bills and keeping a roof over your head.
Credit cards are extremely useful in the early days of your freelance career, particularly if you are starting from scratch in regards to buying equipment and tools that are going to be essential to you completing your work to a high standard and finding clients. These include purchasing web domains and hosting, laptops/computers and accessories, and office furniture for the home. It’s a good idea to use credit cards in this instance as you can pay for the items over a few months, and a lot of these expenditures can be written off when it comes to doing your taxes.
If you already have credit cards,but you feel you are going to need more credit to start your freelance business, seek out financial advice so that you can choose the best options for you, without you being rejected and having to look for alternatives.
Borrowing money from family members or friends is always a tricky issue because you can often feel guilty, especially if for some reason you are struggling to pay it back. Crowdfunding is a great alternative to borrowing money as you don’t need to pay the money back, and your friends, family and anyone else who wishes to donate money to your cause will do so knowing exactly where the money is going, as you would have set that out from the start of your campaign.
More and more freelancers and small businesses are taking to crowdfunding to raise money for their projects.If you don’t have access to a lot of money, starting a crowdfunding campaign could see you raising a nice amount of cash that can go towards funding your marketing campaign, designing a website or purchasing the equipment you need to give yourself the best chance of being a successful freelancer for years to come.
Freelancers can apply for business loans, even though you are a ‘sole trader’ or ‘sole proprietor’ of the business. It can be difficult to get a business loan as a freelancer as there are a large number of lenders who don’t like to lend to self-employed people. They reason that, because there aren’t other members of staff working with you, there is no support in place should you become ill or suffer an injury that prevents you from earning money, meaning that the lender won’t receive their repayments.
There are ways to go about receiving business loans without going to the big banks and financial institutions that are more likely to turn down freelancers. Online lenders (also known as alternative lenders) could be a good option as they are more willing to see past your circumstances and give self-employed people the opportunity to get a business loan and pay it back without worrying about what ‘could’ happen. Always do your research before taking out any loan with an alternative lender, and make sure they are legitimate before signing any contracts.
There is a wide range of business grants available to freelancers, but like loans, they can be difficult to obtain, just for different reasons. For grants, the difficulty is in the number of applicants who will be competing for the same money. However, you can set yourself apart from the competition when you fill out the application form, by stating what you need the money for.
Lenders will often look kindly towards freelancers who have done their homework and have a solid business plan in place, as they don’t want to give their money out to people who will simply throw the money away or not use it to grow their freelance business further. Search the web for available business grants and always read the terms and conditions before you apply, and check to see if you are eligible, too. You don’t want to waste your time applying for grants you have zero chance of winning.
Sell Unwanted Items
With so many financial options available to freelancers, it’s easy to forget the most obvious way to earn extra money for your new career: Selling unwanted items from home. There are several online forums and websites which provide opportunities for people who want to sell items. If you really want to commit fully to being self-employed, it might be a good idea to search your home for any unwanted items and sell them online.
Whether it’s gym equipment that isn’t getting the use it deserves, an old laptop that needs an upgrade, or smartphones that have been replaced but never sold on, these items will make for a nice starting fund for your freelance career, and could pay for some new tools and equipment that will help you get the start you need.