The so-called freelance market is continuing to boom in the modern economy, thanks primarily to a combination of rapid technological advancement and a lack of permanent employment opportunities. This is also a global trend, with an estimated 34% of the U.S. labor force now freelancing and 1.4 million British citizens working independently. Another interesting point of note is the level of value that freelancers add to the economy, with independent workers in the UK contributing an estimated £21 billion annually.
How to Reduce Costs as a Freelancer and Independent Business Owners
With this in mind, it is clear that freelancers and sole traders represent one of the main engines for global economic growth. This is reflected in the attitude of government agencies around the world, which have recognised the importance of independent workers and looked to empower them through tax breaks and financial incentives. While this may have made it easier than ever to work independently as a freelancer or small business owner, however, you must still adopt a proactive approach and look to reduce operating costs when first establishing yourself.
Consider the following steps towards achieving this:
1. Understand Your Market and External Factors
One of the key advantages of freelancing is that it offers you access to a global pool of potential clients. This makes it far easier to source work at any given time, while working in the international marketplace also enables you to broaden your skill-set and build a viable résumé. Working for international clients also poses certain problems and risks, however, especially with regards to language barriers, effective communication and fluctuating currency exchange rates. It is therefore crucial that you develop an in-depth understanding of each individual market that you work in, as this will enable you to negate any potential linguistic issues and establish a suitable rate of payment. With regards to exchange rates, it is also worth bearing in mind that most comparison sites use mid-market rates as a point of reference. These often vary considerably from the corporeal rates offered by banks, however, so communicate directly with them when seeking information.
2. Protect Yourself Through Different Types of Insurance
Another crucial lesson to heed as a freelancer is the importance of independence, as you alone are responsible for sourcing work, setting a viable rate of remuneration and insuring your key assets. The latter point is particularly important, as there are various types of insurance that can help you to minimise financial risk and reduce long-term costs. In addition to taking out coverage on the hardware that you use and any office space that you inhabit, you should also ensure that you access travel insurance policies that protect you when you head abroad to meet international clients or overseas manufacturers. It is estimated that the cost of paying for an air ambulance from the U.S. to the UK can cost in excess of £30,000, for example, whereas a viable travel insurance policy can negate this with the help of regular, monthly repayments. You may also want to consider investing in specialist policies that protect your income stream in the event of long-term illness, although you will need to work for a considerable period of time before applying for this.
3. Create a Strong and Visible Online Presence
Marketing can present a problem for freelancers, as while it is a key component of growth it also requires considerable time and resources to conceive and build a professional website. There are a number of contemporary options that enable you to minimise costs, however, while also maximising your reach within the global online space. The advent of free-to-access social media marketing tools provides a relevant case in point, as this can be combined with a traditional or mobile website to create a stronger and more visible online presence. According to website builder 1&1, Starbucks’ popular Facebook page has earned a staggering 29.5 million likes, creating a daily communication channel between the brand and their consumers in the process. Alongside an optimised website and the cost-effective creation of high quality content, this can help to promote your services globally without forcing you to spend outside of your means.