A few more considerations…

Who is your customer or client?

Have a think about who you’re selling to. Is it men, women or both? How old? What do they earn? Where are they based? What are their interests? Where do they go on holiday (if they do). Do they have kids, a partner? What books do they read and where do they tend to shop? You’re building up a profile so that you know who you’re speaking to when you launch your website and on social media. If you don’t know who your customer or client is, you can’t reach them.

Or are you selling to businesses, rather than individuals? If so, what sector are they in and what size of business are they? Where are they based? What would they be looking for when deciding on who to go with for your product/service?

Savings plan

You’re at the start of self-employment so right now, you’ll do well to focus on just getting your business off the ground. But once established, it’s important to protect yourself. If you’re earning enough, it’s great to squirrel away some savings so that if there’s then a period of illness or no work, you’ll have some funds to access that will hopefully see you through it.

Frankie Tortora, founder of Doing it for the Kids and freelance graphic designer, recommended Plum to me. It’s an app that helps you to save a bit each month. This might be worth a shot, if you find it hard to remember these things. I love the idea of it but found I didn’t need it, as I’m quite happy to manage two bank accounts. One is a current account, where I pay myself a salary each month and all bills comes out of. And the other is a business account. Here, I receive all business income (like my book advance, course fees or any ad-hoc journalism commissions) and pay business costs. 

I also transfer my tax money into a savings account. It can be a little heartbreaking having to set aside tax when you’re starting out in business, but it’s necessary. You may already know that as a self-employed person, you have a tax-free personal allowance of £12,500. That means you can earn that amount without having to pay a penny of tax. But anything you earn on top of that, you have to set aside 20% of it for tax (up to £50,000. Then from £51,000 – £150,000 you pay 40% tax. And over £150,000 you pay 45% tax).

What I do as a little extra savings pot is set aside 20% of every freelance job that comes in. That means that when I come to do my tax return, I always have money left over ‘in the pot’, as I haven’t accounted for the tax-free £12,500. It’s like a little bonus before I have to hand over the tax that I do owe. Holly (the coach from earlier) reckons three month’s salary is what all freelancers should aim to have in savings. But she also recommends a ‘fuck it’ fund – put any extra cash in this ‘pot’ so spend frivolously when you need a little pick-me-up. I love this idea.

Limited company

If you register as a limited company – this has tax benefits, and liability benefits but requires a second lot of accounts each year – your accounting will look a little different. When starting out, I’d recommend simply registering as a sole trader and then seeking advice from an accountant once you’re up and running, to determine whether it’s a good idea to become a limited company. There’s some information on the differences between sole trader and limited company here. I now have a limited company, as well as operating as a sole trader.

Freelance insurance

I don’t have it myself but I’m hearing more conversations about insurance. For things like covering you if you’re sick, maternity pay, it can be a good idea. Leah Larwood wrote a blog post about April UK who offer insurance for self-employed workers. Here’s her piece, in case you’re interested.


The UK Government are trying to encourage self-employed workers to put money into a pensions fund, in the same way that employed people do. I wrote about this for Forbes. It’s clearly a good idea to think that far ahead but my overriding feeling is that while trying to establish a freelance career or new business (perhaps alongside raising young kids), it doesn’t need to be the priority. Wait until the cash is flowing in and then start worrying about your pension.