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al risk, and can operate that way (subject to IR35 or other local tax laws)? If so, then you may get most of your work from agencies, who are likely to take a cut, and you’ll still have the costs of running a company.</p><p id="2442">Would you like to use your skills and experience to help other companies solve problems and grow?</p><p id="476e">Are you ready and motivated to build a product from scratch, and to go to market with it?</p><p id="c664">Once you know where you are, it’s important to pause. Don’t get carried away, you need to know that you:</p><ul><li>Have something to offer</li><li>That companies will be willing to pay for</li><li>With sufficient profit (margin) to be sustainable</li><li>And that the revenue you’ll generate will create enough profit for the type of lifestyle you want</li></ul><p id="572d">It’s OK to pause here, or even stop completely if the timing or what you have to offer isn’t right.</p><p id="38a1" type="7">My advice would be to write down all of the above and to check it over with your friends and family. Come back in a week or two and see if it still makes sense.</p><p id="69d7">Spend some additional time thinking about your support network, if you’re going alone, who’s going to prop you up when revenue is taking a hit due to a global pandemic?</p><p id="e9e6">Before you go about forming a business, decide whether you are going to work on your own, or bring in other people. Traditionally, freelancers form independent companies, but may collaborate with each other and network together.</p><h2 id="74c3">You now need to set up your business</h2><p id="bf59">In the UK you can work as a business without a separate entity (sole trader), however for tax purposes and liability, it is almost always worth creating a Limited company. The up-front cost is < 100 GBP and the cost of an online accountant is probably < 100 GBP / month too.</p><p id="bc3f" type="7">You should always try to treat yourself and your business separately, even if you are a 100% stakeholder in the business.</p><ul><li>In the UK, <a href="https://www.gov.uk/topic/company-registration-filing/starting-company">register your company at Companies House</a>, there is very little reason to pay an agent to do this for you</li><li>Create a website, if you can afford it, get a logo — you can use a generator and serve it from <a href="https://github.com/">GitHub pages for free</a>.</li><li>Setup an email and document store — <a href="https://gsuite.google.com/landing/partners/referral/trial.html?utm_source=sign-up&utm_medium=referral&utm_campaign=apps-referral-program&utm_content=90TD7BJ">GSuite provides a great experience for a very low monthly fee</a>. My referral codes are: <code>UAE7QWH7XPQRG3C</code>for basic, and <code>V9VKLERQ3E3TDQG</code> for the business plan.</li><li>Setup a bank account — <a href="https://www.starlingbank.com">Starling</a> offer free accounts without fees</li><li>Get a online accountant — use a SaaS product like Xero or an <a href="https://crunch.co.uk/referrals/?c2c=Openfaas1">accounting company like Crunch, if you’re in the UK</a></li><li>If you’re going to be working with clients remotely and holding calls, you can setup a <a href="http://bit.ly/2Uimpw9">Zoom line for video calls</a></li></ul><h1 id="b6ee">Get your first clients</h1><p id="8882">I thought I’d like to be an entrepreneur and a consultant. I’d had a track record of creating open source projects with high amounts of traction and commercial interest, but hadn’t managed to monetize them. My plan was to put the two together.</p><h2 id="c386">Getting to speak to your first client</h2><p id="dc22">Depending on your background and network, you may be able to get your first conversation in a number of ways:</p><p id="c8a2">Through social media — Twitter or LinkedIn</p><p id="6db2">Advertising — via your website, paid adverts, guest blog posts and newsletters — you can collect email addresses on your website</p><p id="e25d">Word of mouth — past work, from people referring you</p><p id="577b">Friends and family — if you have something of value to offer, you should feel able to offer it to your closest network, and if there’s a fit, they could be your first custo

Options

mers</p><p id="3d8e">These sales can be broken down further into inbound sales where a client contacts you, probably via email. Or outbound, where you contact someone over email or phone them up. The outbound sales can be the hardest to start with, and if you can’t deal with rejection, this could be a major problem for you.</p><p id="9112">Make sure that you can explain what you do and what you offer in 30 seconds, to someone who is outside of your industry. Sometimes I say that: “I help companies move their software to the cloud”</p><h2 id="8d1a">Focus on the client</h2><p id="f63b">One of the most important lessons I learned from <a href="https://www.amazon.com/Irresistible-Consultants-Guide-Winning-Clients/dp/1683501640">The Irresistible Consultant’s Guide to Winning Clients</a> was “Right side-up thinking”. The core notion is that you check your ego, skills, CV and experience at the door.</p><p id="bfa6">Focus on the client. What is that they need most? Where are they struggling? What problems are they contending with? From there, you decide if you can help them, and offer your services.</p><blockquote id="38b4"><p>When I launched my business a year ago today, I expected to be inundated with requests for commercial support, sponsorships and services for <a href="https://www.openfaas.com/">OpenFaaS</a>, the open source project I’m best known for. Whilst there was some of that, 70–80% of my work has been helping companies fix other problems like their branding, go-to-market and product strategy.</p></blockquote><p id="02f3">I didn’t know that I was practising <i>“Right side-up thinking”</i> at the time, but I now practice it consciously. Whether you’re going independent, or working for a company, this mindset shift can be immensely powerful.</p><h2 id="a089">Solutions for pain</h2><p id="4082">Another key lesson I learned was that companies like to buy solutions which are simple to understand and which solve an immediate problem that they have. This is why selling a series of developer content on <a href="https://kubernetes.io/">Kubernetes</a> was easy for a company with a brand that was losing followers month-on-month, when I couldn’t sell <a href="https://www.openfaas.com/">OpenFaaS </a>support to a large telecom company in the UK who were heavily reliant on the project in production. Why was that? I believe because OpenFaaS had already solved their immediate pain.</p><p id="7195" type="7">To buy your solution, companies need to feel a sense of urgency and to be acutely aware of the pain that a problem is causing them.</p><h2 id="357f">Getting paid</h2><p id="93e5">In order to receive money from your client, you will need to raise an invoice in your accounting software. Once you’ve done that, they may take an additional 30 days to pay you. Welcome to cashflow.</p><p id="ea77" type="7">If you’re starting out, try to keep your costs as low as possible to counter this effect. You are also going to start finding out that clients don’t always pay or pay on time. That is part of the risk of running a business.</p><h1 id="873a">Wrapping up</h1><p id="eca7">Something I didn’t mention here is that you need to have a hard skin and be comfortable with risk, ambiguity and trying new things.</p><p id="a461" type="7">In my first three months I sold nothing. Think about that for a moment.</p><p id="3271">In the following month, I sold 1000 GBP of services, which on reflection were not priced as well as they could have been. That helped me learn how more about how the consulting game works, that deals can take months to sign, and to pace myself. Over the past 12 months I’ve been fortunate enough to enjoy working with a dozen clients and on a variety of projects.</p><p id="34b3">I hope you’ve found this essay useful and have learned something, if you are considering going freelance, or if it’s something that you’ve already begun.</p><p id="5063">Feel free to connect with me at <a href="https://www.alexellis.io">https://www.alexellis.io</a> or subscribe to my <a href="https://github.com/sponsors/alexellis/">Premium Newsletter via GitHub</a> to follow my journey and to learn about Open Source, independent business and Cloud Native Technologies.</p></article></body>

What you need to know before you go freelance

I’ve been doing freelance work for the past five years as a way of topping up and to pay taxes on passive revenue, but 12 months ago I decided to go all-in. I don’t know all the answers, but I’ve learned a lot and this may be useful to you if you’ve ever considering going freelance or working for yourself.

Disclaimer: this does not constitute financial or legal advice but opinion, and I give no warranty or liability for anything you chose to do as a result.

In this post we’ll cover three topics:

Should you go freelance and what does that mean?
Decide what type of business you want to run.
Get your first clients.

Should you go freelance and what does that mean?

Over the world there are many terms for working for yourself. Here are just a few: contracting, “1099”, self-employed, entrepreneur, freelancer and consultant.

I would lump these into three categories:

Contracting / 1099

You’re employed by a company through another vehicle (your own company, or as a sole-trader), you may have a manager, you may be controlled and told what to do and when, but you have no employment rights. These agreements are usually between a person and a company.

In the UK this type of arrangement is now under threat from the government’s IR35 legislation, which aims to crack down on “disguised employment”.

Consulting / freelancer

A consultant or freelancer works with other companies and clients to provide a service to their business. You may bring other contractors and employees in on a project to complete work, but the agreement is not between a person and a company, but business to business.

Entrepreneur

An entrepreneur is a broad term, but in this context it’s about exploiting a situation or opportunity for commercial gain. You could be an entrepreneur and a consultant, but I would tend to look at this category as a creator, someone who may be doing R&D on their own products. Think of the folks you would find on indiehackers.com. You may have big plans and seeking out external funding, or you may be bootstrapping a micro-SaaS product like a website uptime monitor.

As a consultant or entrepreneur you should consider setting up a limited company that creates a new entity for tax and legal purposes. This can provide some shielding coupled with a business insurance policy. If you bring on employees in the future, or sub-contract, they will work on behalf of your company and not for you directly. This presents a better image to your clients.

All of these categories are archetypes, this is my model and you may have other definitions or thoughts about each. That’s OK, but the core principle is that they are all “freelance” in varying degrees. As we move from the contractor through to the entrepreneur we gain control and take on more risk.

Decide which type of business you want to run

Not everyone will tell you this, but you need to decide what type of business you want to run.

Consider your appetite for risk, and how much income you want to bring in and over what period. If you’re wanting to maximise your income in the short-term then contracting may be the right choice. If you’re comfortable to defer your gains, then you must decide your minimum income level to operate and be content, and realise that the payoff is going to be delayed somewhat into the future, but may be greater.

Do you want to sell 40 hours of your time per week to earn a higher hourly rate than a full time employee, and you’re happy to take on that additional risk, and can operate that way (subject to IR35 or other local tax laws)? If so, then you may get most of your work from agencies, who are likely to take a cut, and you’ll still have the costs of running a company.

Would you like to use your skills and experience to help other companies solve problems and grow?

Are you ready and motivated to build a product from scratch, and to go to market with it?

Once you know where you are, it’s important to pause. Don’t get carried away, you need to know that you:

Have something to offer
That companies will be willing to pay for
With sufficient profit (margin) to be sustainable
And that the revenue you’ll generate will create enough profit for the type of lifestyle you want

It’s OK to pause here, or even stop completely if the timing or what you have to offer isn’t right.

My advice would be to write down all of the above and to check it over with your friends and family. Come back in a week or two and see if it still makes sense.

Spend some additional time thinking about your support network, if you’re going alone, who’s going to prop you up when revenue is taking a hit due to a global pandemic?

Before you go about forming a business, decide whether you are going to work on your own, or bring in other people. Traditionally, freelancers form independent companies, but may collaborate with each other and network together.

You now need to set up your business

In the UK you can work as a business without a separate entity (sole trader), however for tax purposes and liability, it is almost always worth creating a Limited company. The up-front cost is < 100 GBP and the cost of an online accountant is probably < 100 GBP / month too.

You should always try to treat yourself and your business separately, even if you are a 100% stakeholder in the business.

In the UK, register your company at Companies House, there is very little reason to pay an agent to do this for you
Create a website, if you can afford it, get a logo — you can use a generator and serve it from GitHub pages for free.
Setup an email and document store — GSuite provides a great experience for a very low monthly fee. My referral codes are: UAE7QWH7XPQRG3Cfor basic, and V9VKLERQ3E3TDQG for the business plan.
Setup a bank account — Starling offer free accounts without fees
Get a online accountant — use a SaaS product like Xero or an accounting company like Crunch, if you’re in the UK
If you’re going to be working with clients remotely and holding calls, you can setup a Zoom line for video calls

Get your first clients

I thought I’d like to be an entrepreneur and a consultant. I’d had a track record of creating open source projects with high amounts of traction and commercial interest, but hadn’t managed to monetize them. My plan was to put the two together.

Getting to speak to your first client

Depending on your background and network, you may be able to get your first conversation in a number of ways:

Through social media — Twitter or LinkedIn

Advertising — via your website, paid adverts, guest blog posts and newsletters — you can collect email addresses on your website

Word of mouth — past work, from people referring you

Friends and family — if you have something of value to offer, you should feel able to offer it to your closest network, and if there’s a fit, they could be your first customers

These sales can be broken down further into inbound sales where a client contacts you, probably via email. Or outbound, where you contact someone over email or phone them up. The outbound sales can be the hardest to start with, and if you can’t deal with rejection, this could be a major problem for you.

Make sure that you can explain what you do and what you offer in 30 seconds, to someone who is outside of your industry. Sometimes I say that: “I help companies move their software to the cloud”

Focus on the client

One of the most important lessons I learned from The Irresistible Consultant’s Guide to Winning Clients was “Right side-up thinking”. The core notion is that you check your ego, skills, CV and experience at the door.

Focus on the client. What is that they need most? Where are they struggling? What problems are they contending with? From there, you decide if you can help them, and offer your services.

When I launched my business a year ago today, I expected to be inundated with requests for commercial support, sponsorships and services for OpenFaaS, the open source project I’m best known for. Whilst there was some of that, 70–80% of my work has been helping companies fix other problems like their branding, go-to-market and product strategy.

I didn’t know that I was practising “Right side-up thinking” at the time, but I now practice it consciously. Whether you’re going independent, or working for a company, this mindset shift can be immensely powerful.

Solutions for pain

Another key lesson I learned was that companies like to buy solutions which are simple to understand and which solve an immediate problem that they have. This is why selling a series of developer content on Kubernetes was easy for a company with a brand that was losing followers month-on-month, when I couldn’t sell OpenFaaS support to a large telecom company in the UK who were heavily reliant on the project in production. Why was that? I believe because OpenFaaS had already solved their immediate pain.

To buy your solution, companies need to feel a sense of urgency and to be acutely aware of the pain that a problem is causing them.

Getting paid

In order to receive money from your client, you will need to raise an invoice in your accounting software. Once you’ve done that, they may take an additional 30 days to pay you. Welcome to cashflow.

If you’re starting out, try to keep your costs as low as possible to counter this effect. You are also going to start finding out that clients don’t always pay or pay on time. That is part of the risk of running a business.

Wrapping up

Something I didn’t mention here is that you need to have a hard skin and be comfortable with risk, ambiguity and trying new things.

In my first three months I sold nothing. Think about that for a moment.

In the following month, I sold 1000 GBP of services, which on reflection were not priced as well as they could have been. That helped me learn how more about how the consulting game works, that deals can take months to sign, and to pace myself. Over the past 12 months I’ve been fortunate enough to enjoy working with a dozen clients and on a variety of projects.

I hope you’ve found this essay useful and have learned something, if you are considering going freelance, or if it’s something that you’ve already begun.

Feel free to connect with me at https://www.alexellis.io or subscribe to my Premium Newsletter via GitHub to follow my journey and to learn about Open Source, independent business and Cloud Native Technologies.