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Being your own boss is so romanticized on social media, it is insane. Do I love working for myself as a freelance writer and editor? Absolutely! Is freelancing for everyone? Absolutely not! There are so many reasons why working as an employee is better than working for yourself. But on the flip side, being your own boss comes with many advantages.
You should do what is best for you and not what people tell you to do. I learned the hard way what to do and what not to do as a business owner. So, to make your life easier, if you’re considering becoming a freelancer, here are some things you should know before taking the leap.
No matter how much you trust the client or if they are someone close to you, have them sign a contract. You never know people’s intentions and if they are going to do what they say they are going to do. A contract protects you as the freelancer, so your client knows exactly what you’re going to do and the payment arrangement. If they don’t pay, then the signed contract will become very important when going after them for the money.
2. The Payment Arrangement
That leads me to the payment arrangement. The contract should state the exact terms of what they have to pay and when. I strongly advise that you take a deposit or part of the payment upfront before doing any work. You can also have them pay part of the bill after the first hour or two of work is done before finishing, but this is riskier. I learned the hard way from a client not paying me. I never got that money. So please protect yourself and your time.
3. Terms and Conditions
Your terms and conditions for all clients should be on your website and included in every contract. Your client should read the terms and conditions before signing the contract. Terms and conditions include things like the standard payment terms, copyright agreement, the place a dispute will be settled, late payment fees, and more. Even if you have to pay someone like a lawyer to help you write up these terms and conditions, it’s worth it.
4. Business Insurance
Insurance is super important for a business owner. It doesn’t matter which country or state you live in; there will always be people who try to sue. Protect yourself against potential lawsuits and get business insurance. You can get insurance for all different aspects of your business. I would start looking at insurance companies like Centraal Beheer if you live in the Netherlands. They are a well-known insurance company.
5. Charging The Value Added Tax
You may not know this because tax is already included in the final price of everything you buy in Europe, but a value-added tax (VAT) is added to the price of most items and services. Of course, this depends on where you live. In the Netherlands, the VAT is 21% on most services. Who you have to charge and how much can become quite complicated depending on what goods and services you offer and where your client/customer is located. But if you don’t add it to the bill, you’ll have to pay it yourself.
6. Quarterly VAT Declaration
Speaking of VAT, as a business owner in the Netherlands (and in many other places), you have to file your VAT quarterly. Then you’ll have to pay the government the VAT that your clients/customers paid you. If you don’t do this, you can be fined or more.
7. Hire An Accountant
You may be thinking that hiring an accountant is expensive, and it is. But it is absolutely worth it if you’re not well versed in the tax system and laws. Your accountant can help you allocate payments correctly, inform you when to charge VAT, tell you what can be charged on your business card, file quarterly and yearly income taxes, and much much more.
If you use a software like E-Boekhouden, your accountant will have direct access to your books, so it’s super easy for them to correct things. You’ll also be able to follow along when they file your taxes. Do not underestimate how much money your accountant can save you just by having them help you with bookkeeping and more.
8. Keeping Track Of Everything
Even if you hire an accountant, you can save money by entering all the transactions yourself. You need to keep track of all your payments, invoices, taxes, and more. Personally, I use a software called E-Boekhouden. E-Boekhouden is quite popular in the Netherlands. It is in Dutch but is very easy to use once you learn some basic Dutch. I try to enter all my transactions and such weekly. The better you stay on top of things, the easier it’ll be.
9. Being Your Own Boss
One of the hardest parts of being your own boss is taking control. Do not let your clients walk all over you. Clear expectations and delivery timelines should be set. Your clients should not be messaging you every day for updates. Sometimes you need to have a conversation with your clients about managing their expectations.
In addition, if you go on vacation, you will most likely miss out on potential clients who contact you. But don’t worry about this. Relaxing in your time off is much more important than chasing every potential client. There will always be someone else who will want to hire you/buy from you.
10. Take Everything Into Account With Your Fee
I know you may want to charge less than you should because more people will hire you/buy from you, but don’t do this. You have way more expenses like insurance and software to pay. You’re not an employee anymore. All that stuff that your company pays for right now, you’re going to be paying yourself when you work for yourself. Take all of that into account.
Working For Yourself Is Great Despite All Of This
I am not trying to discourage you from working for yourself. I just wanted to give you some insight into what you can expect. People don’t talk about all the day-to-day things of working for themselves. These things are important and crucial to owning a business. You want to be the most successful and efficient business owner you can be.
The goal is to work less and make as much as possible in that time that you work. You don’t need to be the cheapest to make money; you need to be the smartest. Working for yourself should give you more freedom and flexibility to spend time on what and with who you love.
Some Useful Resources
If you want to know more about freelancing in the Netherlands and how to start, check out this YouTube video, podcast episode, article, and blog posts. In all of them, I explain more in-depth about freelancing and working for yourself.
What questions do you have about working for yourself?
The featured photo was taken by Anna Salminen from Amatsooni Photography.
Follow me on my Instagram, Tiktok, and Facebook for more about my life as a freelancer living in the Netherlands.