12 October 2007

Another award! Kind of

I'm afraid I can't take any credit for this, but the Strathclyde Pension Fund Office website - which I wrote the content for earlier in the year - has just won the Website Design Award (Public Sector) in the Professional Pensions Scheme of the Year Awards 2007.

It's great news because the team there are lovely, they work very hard, and they really care about their clients. Well done to them all!

10 October 2007

One year. What have I learnt?

I got an email today out of the blue asking for advice now that I'm a seasoned businessman. Stop laughing at the back. I am, honestly. I've been going a year.

This was my reply:

1. It's not what you know, it's who you know. Keep every contact you make and - as long as you have the time and it doesn't get in the way of earning - do them the odd favour now and then. You'll never know when you need to call in those favours. Dad taught me that.

2. A friend who'd started a business a while ago told me one thing when I started - "it always takes more money than you think it will". I dismissed him out of hand. What money could I need? I had my laptop, a big pad of paper and some felt pens. Then I hit a quiet period. If you can - or as soon as you can - build up a "war chest" of about 3 months' money, because when the work dries up (whether it's for seasonal reasons - you'll be busy at financial year end and quiet in summer in some sectors) you'll be stuck without it. So yes - it does always take more money than you'd think.

3. Never stop looking for work. When I started I got two really nice, big chunks of work. They paid the bills and let me have fun, and it was interesting work. There was travel and glamour and I got caught up in and sat back, thinking I had it made. And I stopped doing what I'd done to get that work in the first place - calling people, applying for work, trawling websites. After that things dried up and I had no work for a while - and got into money troubles.

4. Money moves at an odd pace. You have to get used to cashflow. I spent the whole of September working - only one day off all month - and I've not seen a penny of the money yet. I've not even invoiced for it. Remember it's never as simple as do job - get paid. It's find job, negotiate, do job, issue invoice with 30 day terms, wait, chase, eventually get money, so the bank balance is anything up to 60 days behind the workload, and certain people you want to give even longer terms to because they're nice people and they're as busy as you. You're either rushed off your feet and poor or quiet and rich - and when you're quiet and rich you have to hold on to that money because you won't know how long it's supposed to last for.

5. If you work for friends don't be afraid to charge them what you charge everyone else.

6. Your last employer may well be your first client. Be nice when you leave and keep in touch with them.

7. You never stop learning - so keep a log. I hadn't done this and my girlfriend got sick of me telling her about mistakes I was making over and over again - so she suggested I write a project diary. I have a blog hosted on my home PC now where I write - and rant - about projects I've done. When I undercharge, things I do wrong, things to note... keep it personal, for yourself alone, and keep it up to date.

8. Listen to people. Everyone has ideas and opinions and you don't have to use them but you'd be surprised where good ideas can come from - and who might know someone who might know someone else who needs you.

9. Don't pay for something if you can get it for free with a little work. There are services to get government contract alerts sent to you and they cost a fortune - but if you actively look you can get the same info for free. If someone has an old desk, printer, keyboard, whatever you need - take them. Be smart and professional for your clients by all means - but everything else just needs to work.

10. Get a good accountant - someone recommended by a friend - and pay them to do your tax return. They'll save you more than you'll pay them.

11. Put at least 30% of everything you earn into an ISA or other high interest savings account. Never spend it. Never be tempted to use it to bail yourself out of a quiet period. This is your income tax. You pay it in one big chunk at the end of the year, not as you earn, and it's easy to forget this. If you save more than you need, put that to the next year's bill. When you stop working for yourself, take the excess, buy yourself a Mars Bar or something. Don't touch it before that.

12. Approach your local business support organisation (www.businesslink.gov.uk should be your first port of call) and do whatever courses they offer. I did book-keeping, marketing, and legal and admin day-long courses for £30 a pop and it was the best money I ever spent. For the business, I mean - going to Florence was the best money I *ever* spent. Or my MG. Or that meal in Paris. Or something.

13. Be anal about keeping records. Receipts, invoices you issue, invoices you receive. The more accounting you can do yourself, the cheaper it will be for an accountant to do your tax return. Learn the basics of double-entry book-keeping at the very least.

14. Be prepared to sacrifice your social life some months - and to sit at home, alone, bored for others. Build your portfolio with charity and club work when you're quiet.

15. Any attempt to do cash-in-hand work for a friend *will* get more complicated than it needs to because you'll need to pay tax on it - and avoiding paying that tax will lead to massive worries about being found out, which really *is* a bad thing. It is possible, but make sure it's worthwhile, and certainly don't go public (like on a blog or something) and say that it happened. Of course, this point is purely hypothetical.

16. Stop thinking of other agencies and freelancers as competition and think of them as friends and colleagues. If you're too busy to do work, recommend someone good (remember your reputation can be tarnished by a bad recommendation) and make sure they know you were involved. They might return the favour, give you work themselves, or otherwise owe you.

17. Enjoy it. And enjoy the benefits. Eat a decent lunch. Listen to the radio when you work. Work in your pants. When you've got 3 months' money as a safety net and you know your income tax is covered, treat yourself a little. Put what you can through the business (a good accountant will tell you what you can and can't get away with). Every now and then sit back and smile. I celebrated (quietly) my 6 months - and I'm having a party for my first year.

18. Things will go wrong. It'll be hard. You'll want to jack it all in at least once a month. You need to remember why you started working for yourself and keep going. It is incredibly rewarding but also depressing at times. Remember that whatever happens now you've made a big, positive change in your life - you're more employable as a failed freelancer than as someone who's never tried. You've given yourself infinite flexibility. If I wanted to leave the country tomorrow and start a new life somewhere I could, very easily, and that's an incredibly liberating feeling. I really do feel that I'm capable of anything now.


19. Don't spend your VAT. I just remembered this one. I did it once, got my VAT bill, and watched everything from my next invoice just dissapear into the VAT man's pockets. Always assume (if you're a low expenditure company like me) that everything you collect in terms of VAT is just "sitting in your account" (like Father Ted used to say) before going on to the VAT man. Anything you do get back is then a bonus. Put it in your ISA with your other tax money.

20. Get a pension and - if you can afford it - income protection insurance. If I break all my fingers in a freak piano accident I can't earn, and then I'm in trouble. That's why I avoid pianos.