Dealing with risk - Freelance series (2/3)

August 24, 2019

This is the second blog post of a series of three about freelancing. I'm celebrating one year of Adapt Freelancer and some of the lessons I've learnt. You can read the other posts here:

One of the biggest things on the mind of anyone who’s looking to jump from full-time work to freelancing is risk.

When you have a job you pretty much know that no matter how good or bad things are going you can turn up to work tomorrow, work eight hours then collect your salary at the end of the month.

When you’re freelance this guarantee is gone. It’s up to you to find work and if you don’t work you don’t earn. Many people are understandably put off by this risk and chose to stay in a stable job.

However, risk cannot always be seen as negative. For example, if you have a Full House in a Poker hand betting more money, although “risky”, is probably the correct decision. If you have money saved up, it’s more likely you’ll get better returns in the long term by investing in the market rather than leaving it in cash.

If you have a skill there is a market for and you’re at a point in your life where you can take on some instability, a calculated risk to go into freelancing may be a good decision.

Freelancers are worth more to a company

When you’re being hired as a freelancer you bring much more value to the company then you do as a day-to-day employee both in terms of the flexibility of your engagement and the skillset you bring.

Imagine a company has a new project that needs to be delivered or business problem that has to be solved and they don’t have the internal capability or skills to do it.

If they hire an employee they need to create a job advert, wait for the candidates to apply, spend days interviewing candidates, wait for the candidate to serve their notice period. Once they’re hired they need to provide a pension, offer holiday and train them. It’s a lot of time and risk. If it’s a short term project it may be totally nonsensical.

Compare that to the experience of working with a freelancer who’s already specialised in a particular field. The company can contact a candidate to deliver a project and if it works out they could be started tomorrow. They have the exact skills that are required. When the projects over they can part ways with no assumption of future projects to be moved to.

To account this benefit that you bring you should be charging much more for your time than an employee. A good way to start is to take your current salary and benefits (pension, bonuses, etc.) and divide it by 220 (working days in a year minus 30 days holiday) to get your effective daily salary at your current job.

As a freelancer, you should be looking to charge between two to five times this amount

As a freelancer, you should be looking to charge between two to five times this amount for your work with clients. If you’re taking on long engagements for a single client in a non-differentiated field you will likely trend towards the lower end but should be able to find work more easily. If you work in a specialised field providing unique insight you will probably be nearer the higher end but will have to spend extra time to prove your position in the market.

Note I much prefer working to fixed prices rather than day rates but it’s easier to explain this concept quickly this way.

Unbillable hours

A reality of working freelance is that you will not be able to spend all of your time working on projects. To attract and support the project work you do you want to do there will be a variety of unbillable tasks that you will have to perform. This includes marketing, bookkeeping, improving your website, writing project proposals, sending emails and researching business opportunities.

Embrace that this is a reality of working as a freelancer and ensure that your charging enough to cover both the days you are earning and the days you aren’t. Use these days to spruce up your business and ensure it’s running as efficiently as possible.

Hedge your bets

If you are still worried about making the jump. A good option may be to work evenings and weekends (if you can) to test the water and see if there is a market for your skill whilst you stay in your full-time job. This may quickly get intensive as you’ll still need to be doing the unbillable work highlighted above on top of the freelance work and your 9-5. But it allows you a safe way to slowly ease yourself in and learn some of the lessons you will need to survive as a freelancer.

In the UK you can earn your first £1000 as a freelancer tax-free and without declaring it to HMRC. You could find a job board or subcontract for someone else and work the occasional evenings and weekends to utilise this without any of the administrative pains.


To summarise if you have a skill or talent that you utilise at your company that can be applied to other companies and you’re good at what you’re doing, freelancing could be an option that’s available to you. If the challenge excites you think about your life circumstances and if you can make it work why not give it a go on the side for a bit?

In the next and final post in this series, I’ll discuss why it’s important to respect yourself as a freelancer and learn to turn down bad opportunities.