Freelancing is something that I’d like to jump into in the very near future. From freelancing (writing and consulting) to Project Management to Textile Design, I believe that I can be successful in any of these three areas.
It’s easy to say that I want to work for myself, but it’s a little more difficult to see figures on paper. As a freelancer, I would be responsible for all of the little extra costs, that are currently covered by my employers. That’s why it’s important to factor these costs in the financial section of your business plan.
Financial Advice for Freelancers
Working for yourself puts responsibility squarely on your shoulders. The best financial advice for freelancers in the Caribbean and globally, is to create a plan. If you are an employee looking to move to self-employment, you have to be clear about what expenses will be your responsibility.
1. Health, Dental, Vision Insurance
I called a local insurance company a little while ago to see what the monthly health insurance costs would be. The most reasonable plan started at almost BDS $400.00 (USD $200.00) and it was loaded with deductibles. If my current insurance company gives me the option to transfer to another plan, I will take it. This is an expense that I would definitely factor in, because you just never know.
2. Income Taxes and Social Security
These are going to come straight out of my pocket and because I’m not sure of the deductions and how to calculate them, I plan on contacting the local government departments. Depending on how much you make, you may be exempt from income taxes. However social security contributions will enable you to receive a pension when you retire.
3. Pension
I have a pension plan with my current company, but I will continue to contribute to it as an individual (if possible). The company matches up to 1% of what I contribute and I contribute 2%. If I can, I plan on supplementing that additional 1% if I can afford it. Planning my pension and retirement are two things that I cannot forego.
4. Payroll
I’ll be working for myself, but I plan to pay myself a salary. It sounds strange, but technically I will be working, so I should be paid. If you are going to hire people to work for you, they have to paid as well. Payroll can be tricky, but you need to keep records and plan properly so that you cover your human resources expenses.
If you’re not familiar with the administrative basics, you might have to hire a virtual assistant to do some tasks for you. You can get your assistant to create your invoices, receipts, statements and other general admin stuff. If you can not afford this, there are hundreds of free Microsoft Excel and Word templates available for download.
My plan is to learn as much as I can, so that I can do most things on my own to help keep my costs down in the beginning. As with everything else, time management is very important. I would like to work from home, so I know that I have to be disciplined and still implement traditional work concepts such as break time, lunch hour and standard work hours.