People on fixed term contracts or tasks, often through an employment agency may find benefits with having umbrella services. Umbrella Companies act as employers to people working on fixed term contract projects or activities. The term “Umbrella Company” comes from the fact that the company employs many different kinds of independent contractors brought together as a legal entity under the “umbrella” of one company. This legal entity then provides employment services for contractors by making sure that all legal tax and accounting requirements are met.
Benefits of umbrella companies
• A relatively easy way of managing contract work – the umbrella company works quickly to set up the services
• Umbrella companies benefit contractors on short term contracts or low hourly rates
• The umbrella company does the invoicing and administration, follows up payment and manages the contractor’s payroll. That is PAYE and National Insurance are calculated and deducted off the gross before payment is made, so reducing worries about tax payments
• Umbrella companies benefit those that are only temporarily undertaking contract work, or for those who are just starting and seeing how work as a contractor suits them.
• The one thing left for the contractor to do with his or her admin is to see that the umbrella company gets time sheets and expense receipts forwarded to them.
• It is worth freelancers and contractors looking into the benefits for them of umbrella services.

Some people might be attracted to the idea of freelancing and are sure that they have marketable skills but it seems so scary just to give up your job and set up on your own. After all, when you are an employee it is someone else’s responsibility to get the work, attract the clients and pay you whether the company is busy or not. If you set up on the side, then it gives you a chance to try out your enterprise before you launch yourself away from your job.

It is also true that some work contracts will prohibit you from undertaking work in the same field as your employer (perhaps in a geographical area or with specific focus) whilst you are working for that company. If your freelance work is a duplicate of your paid work, then you take major risks. Also, where there is little or no overlap of project or tasks it can be tempting to do some of your freelance work during lunch breaks or tea breaks – but this can also be dodgy if your employer gets wind of your other interests.

However, stating to freelance on the side has lots of advantages: firstly, you will be able to build up a work portfolio and a list of clients – as it may well be that your employer will not let you use work undertaken for him/her to be displayed as being yours. Make sure you check. So you can build up enough thickness in your project file to begin to look further afield for clients. It is also good to have extra money and perhaps part-time freelancing suits you (though you will need to complete a tax return for the additional earnings or take even more risks).

Starting off freelancing is not something you take on lightly or without planning. Firstly, you’ll need to have real confidence in your marketable skills and be aware of how your skills rate with the best in the market. Work out what you will need as a minimum to set up on your own – and start to purchase them so you can offer a range of work to your clients right from the first day. Get use to spending less and save as much as you can. Research your possible clients and others in the market you could adapt your work for. Try to approach them informally and feel out the territory. Put your portfolio together with a range of possibilities and costs. Make sure it’s as good if not better than you competitors in the freelance market. Then give up work and only look forward – otherwise you will not put the effort into the work you need to build up your business.

At the outset you will take on any work at all that will give you a profit – you can’t afford to be picky when establishing yourself and if the work isn’t actually what you do, then it doesn’t matter if it is making you money. When you have a range of clients and bigger projects then you are in a position to choose.

Some freelancers fail because they somehow think it is all going to be easier than working. Forget it. You should start off with a working day just the same as if you were going to work. Most successful freelancers work harder for themselves than they did for an employer – start earlier and finish later and also work weekends where necessary. If you don’t like working hard, don’t freelance.

Freelancers do not; on the whole have the rigidly controlled day that employees at work have. This can be a benefit or a problem. Many people become freelancers because they are self motivated and hardworking and want the flexibility to organise their own work life perhaps around their family life or range of freelancing projects. They like the uncertainty, the sense of personal control (though it can sometimes feel more hectic) and the achievement of directing their own life and mainly choosing their own work. These are the kind of people who are successful freelancing. However, others think that the flexible freelancing lifestyle means more that they will find things more relaxing, less pressurised –and they are right. You can stay in bed all day and do nothing – and no-one will bother you. On the other hand you’ll not make it freelancing. If a person cannot self motivate and self-manage then they are doomed. The son of a friend of mine decided to freelance from home, but instead of making client calls he would sit and watch horse racing on his laptop. He could not steel himself to do work he found stressful. Wrong!

To manage the freelancing lifestyle successfully networking is paramount: keep in touch with people you trained with, people you worked with, attend conferences in your area, use the internet, social networking sites, clients, friends of clients – listen to people, see how other people find work. Create your own support network.

It is also essential that you keep your administration up to date – and seek help from administrative services such as accountants or secretarial services if you are not able to do this yourself – even use a call answering service to organise you diary.

If freelancing was really so easy how come we’re all not just working for ourselves?  Well, of course, no one ever said working for yourself would be easy. There are advantages over being employed by someone else, but there are also many problems that will need motivation and energy to overcome. Her are 5 major problems:

1) When is the right time to start?

If you have a good idea and little experience should you just bash on and hope that hard work will sort everything out? Or do you wait longer honing your skills and undertaking training perhaps, in order to increase your chances of success? There is no one answer to this, but if you haven’t done enough research to do a business plan for your first year, then you aren’t really ready for the launch.  You need to look at your competition (and if you haven’t any, is this because there is not market?) and work out your costs and how you are going to live until anything sells! You may need plenty of time to make your stock or put together your portfolios, or your idea might just be ready NOW. It’s up to you to make the call.

2) Marketing

Its often not the product or service that is the problem long term, it’s the sales and marketing, and not everybody is good at both ends of the business. Do some research and keep your nose to the grindstone when it comes to undertaking your marketing calls.

3) Getting paid

The problems of all small businesses are getting paid and many accounts departments just seem to be set up to delay payments to you as long as possible. Freelancers need to be able to have plans for getting money in, from an initial agreement of payment terms when you undertake to do the work to a schedule for reminding finance departments when payments are late.

4) Keeping customers

Some Freelancers learn the secret of getting repeat work some don’t. Learn what is important to customers and deliver to their needs not your ego.

5) Keeping deadlines

So you took on lots of work because you were frightened to turn work down and now you have problems in getting it done on time (see 4). The trick is not to promise deadlines you can’t meet and even add a few days cushion if you can. It’s always better to deliver earlier than later.