When you freelance, you are effectively running your own small business. Like any business you are going to need money to get started. Some likely expenses are:
1) Office equipment, stationery, software and supplies
2) Hiring an accountant and lawyer
3) Building and developing a brand, a website, business cards and other marketing materials
4) Reserve funds when you start your freelancing business
5) Fallback funds in case you are ill or other circumstances prevent you from working.
There is no magic sum of money and certainly if you are still working part-time or full-time then the amount you need will be less. Here are some guidelines:
• Setup expenses
List expenses for your workspace, equipment and promotional materials, as well as at least 10% on top for incidentals you might not have thought of.
• Cost of living for at least three months
Ensure that you have funds to cover your cost of living for at least three months. While situations will vary, we have found that this guideline should provide a good buffer.
Even the most talented of freelancers can occasionally find it hard to build a business due to outside circumstances. Err to the side of caution when calculating these costs – it’s better to be safe than sorry.
Even when business is good you should aim to maintain savings to cover your cost of living expenses for three months. These savings need to be kept for times when you get ill, have no work, an emergency arises or some other situation requires it. Remember that as a freelancer it is your responsibility alone to cover holidays, sick leave and personal time and you should factor that into any financial equation.
1) Office equipment, stationery, software and supplies
2) Hiring an accountant and lawyer
3) Building and developing a brand, a website, business cards and other marketing materials
4) Reserve funds when you start your freelancing business
5) Fallback funds in case you are ill or other circumstances prevent you from working.
There is no magic sum of money and certainly if you are still working part-time or full-time then the amount you need will be less. Here are some guidelines:
• Setup expenses
List expenses for your workspace, equipment and promotional materials, as well as at least 10% on top for incidentals you might not have thought of.
• Cost of living for at least three months
Ensure that you have funds to cover your cost of living for at least three months. While situations will vary, we have found that this guideline should provide a good buffer.
Even the most talented of freelancers can occasionally find it hard to build a business due to outside circumstances. Err to the side of caution when calculating these costs – it’s better to be safe than sorry.
Even when business is good you should aim to maintain savings to cover your cost of living expenses for three months. These savings need to be kept for times when you get ill, have no work, an emergency arises or some other situation requires it. Remember that as a freelancer it is your responsibility alone to cover holidays, sick leave and personal time and you should factor that into any financial equation.
