Going Freelance… So you want to go independent but do you know what it takes to be successful?
Starting out in freelance training
This document is not meant to be a complete how to guide for those wishing to start a consultancy business. It’s purpose is to ask some of the questions and show some information that many other sources fail to do.
Introduction to going Freelance
Many trainers, developers, coaches and facilitators occasionally get the urge to jump ship and do their own thing. So what is the difference between those that ‘make it’ and those that don’t? Lets first look at why you want to leave a place of safety, because it is. Salaried roles provide a predictable structure and a predictable income. But often with politics that we believe we can do without. We want the freedom to make our own choices.
The reality of going freelance
When starting out while on paper you may be your own boss – it is your clients and the tax man that pull the strings. While we like to think that we are own boss (and to some extent we do make decisions), it is often our clients that make demands on us that dictate what we do and how we do it. It is a brave and rare freelancer that ‘manages the client’. The risk of losing the potential income for many is too great – especially in the early days.
Setting a daily rate for freelance work
How much do you want to earn? Well while this might be “how long is a piece of string?” we must have a plan of some kind. In order that you have time for marketing, preparation and filling in all the finance paperwork that you have to you probably only have 100 working days available to you. And as your business expenses, tax etc are additional you will want to aim for: Salary/100 *20% So if you wish to earn £40,000 40000/100 + 8000/100= 400 + 80 = £480 per day
Where will you get your work from?
When first starting out you will probably get 80% of your work from one client (or associate group). This is fine for a time – however statistics from companies house and the banks suggest that most business fail in their first 2 years of business because of their client base or cash flow.
You should aim for no more than 30% of your turnover from one client or associate group. Difficult in the short term – but essential in the long term. I have recently been contacted by a very able trainer looking for associate work – why? Because the associate group he was with work was drying up. We all know there are cycles in the training world – and it is about having a wide client base to help us to weather these storms.
What makes great freelancer?
Well in my experience there are 2 main types of successful freelancer:
1. The jobbing trainer
2. The ‘expert’ Both can succeed.
The Jobbing trainer –
This works well if the day rates expected are low. The understanding here is that most of the marketing is done for you therefore you will be expected to deliver more. Day rates are typically 20-40% lower when working in this mode – but hey a level of security
The ‘Expert’ –
Over the years I have see a lot of consultants and trainers.The very best, (those that stay around) often have one or two models that they apply relentlessly to their clients needs. They understand these models and can adapt them to suite.
Where many freelancers fall down
There are three main areas where individuals embarking on a solo career come unstuck:
Sales & Marketing –
it takes time and if this is not your thing or you find it very difficult. Build a strategy of alliances that will undertake this for you. Please do not place an advert on a forum and expect the work to come flooding in because you are good. It just does not work that way. Be very careful of everyone trying to get you to spend with their type of advertising – they want your money – they are not usually interested in your success. If they say they are offer to pay on results and see how they react.
Yes you must do this – budgeting, VAT etc and it always takes longer than you expect! Do not just hire an accountant and expect it all to be done for you. Keep immaculate records.
When working on your own there is often a feeling of ‘desperation’ when the work dose not come flying in. The temptation is to go for anything and everything. This may include basic consultancy, facilitation, training and research & evaluation projects. A ‘Jobbing trainer’ of the dangerous kind. No USP (Unique Selling Proposition), the danger here is that the person gets to be known as being a ‘project fodder’ and unfortunately rarely gets invited to do the type of work that they enjoy or are really god at – as the reputation they have built is too generalist. These things often lead to freelancers only being in the market for 2-3 years and then going back into the corporate world.
CPD – Keeping up to date
One of the challenges of being freelance is the challenge of keeping up to date. When in a corporate role you bight not think twice of attending a course costing £1000 upwards – but when you are paying the fees yourself this is a different matter. Attending accreditation courses can add to your portfolio and in time add to your income generating ability – but you have to select the right ones. If your are going to invest in yourself how long are you expecting it to take to get a return on your investment?
Look out for innovative ways of developing yourself. These include institute regional meetings, sales pitches by suppliers etc. You can even barter with your existing clients to attend programmes they are running in house, in exchange for a discounted delivery rate.
CPD training offered by providers – if the offer of training in association with a flow of work appears too good to be true it probably is. Remember it is a commercial world out there.
Keep an eye out for products and tools that you can use that not only meet an immediate need but can act as a catalyst for follow-on work. Examples include Investors in People. For many freelancers this started as a needs analysis exercise and led in time to a long term relationship. Unfortunately the cost of becoming accredited has increased making the is a significant barrier to entry, especially when considered in the context of there being a lot of IiP advisers out there and the market now declining. What will be the new IiP? What other diagnostic tools solve an immediate need and can lead to follow on work?
The Business Improvement Review (BIR) is such a tool. It provides a holistic and strategic overview of an organisation along with the ability to identify a prioritised action plan. This provides the freelancer with the opportunity to:
1. Provide coaching & mentoring throughout the implementation phase
2. Identify second order needs
3. Carryout a further review 12 months on and the cycle can start again!
Other tactical tools that can solve a particular problem include the SDI (Strength Deployment Inventory) and the Creatrix Inventory. The SDI is great for developing relationship skills & for teams – it also provides a common language within an organisation. The Creatrix can be used with individuals to look at their propensity for innovation, creativity & risk as well as at team & organisational culture level. Start at one and slowly migrate to the others over time. Both of these instruments are adaptable, have good ‘face validity’ and can be used in a multiple of situations and environments.
When selecting an instrument to be accredited in ensure that if you are a generalist that the tool can flex with you. Also check that the supplier will help and support you in its use.
Is this really for you?
If you are they type of person who is a real extrovert (MBTI) and gets your energy from others, then think carefully about this – how will you get your energy? Networking etc? It is easy to sit at your desk typing, surfing etc BUT not generating income.
- Clients & that tax man are the real boss of your company
- Only 100 working days
- Have not more than 30% of your turnover from one client
- Jobbing Trainers work more days at a lower day rate
- High performing consultants have one basic model that they ‘do to death’ but are very good at it.
- CPD is important
RapidBI – Rapid Business Improvement through effective diagnostics.
Originally published © 2006
Powerpoint slides – Making the Break (used in the CIPD branch session)
Types of consultant
- Outsourced worker
- Gissa job
- Single model solution finder
- 100 day rule
- Spread your clients
- ‘Discounts’ for quantities
Create a clear story