You’ve decided to start freelancing whilst you study, you’ve got a plan, you’ve done your PESTLE and SWOT analyses and you think you can make a real go of it. You’ve got the means to make your product or provide your service, but you’re not quite sure how to get yourself out there. Many people get their first customers through word-of-mouth: working for family and friends, being recommended by a lecturer or someone who has faith in your abilities. Working on a local scale can work really well for some businesses, but not so much for others.
If your product or service is not necessarily suited to the local audience, or perhaps you are ready to expand your circle, online freelancing platforms are a good way to get started. If you talk to professional freelancers, they either love or hate platforms such as Upwork or PeoplePerHour and it’s easy to see both sides. Such platforms are great for quickly building up your portfolio and finding one-off jobs with a quick turnaround, although they do have their downsides. The commission rate is often heavy, competition is high, buyers can provide vague descriptions and underestimate the value of your time.
The typical procedure is to search for a job that you want to work on, create a proposal outlining what you can do and why they should hire you. Once you have completed the work, they then pay you. Some platforms have the added benefit of holding the fee in escrow so that the buyer cannot refuse payment once the job is complete. After that, you pay your fees and withdraw the money.
Choosing a platform
If you already have experience, it’s often best to find a platform specifically catering to your type of work. Although it may seem like there is more competition, all professionals on the site will be expected to provide high-quality work, meaning that you can charge higher rates.
On the other hand, a generic platform gives you access to clients from a wider range of backgrounds and may provide more frequent work. Here are just a few of the popular ones:
You’ve probably already heard of Fiverr – the premise of which is that freelancers list which jobs they are willing to do for $5 (£3.72). Extras can be added on after that, but the base price made it highly accessible for customers who can’t necessarily afford sign-up fees. You can list the job you are willing to do and don’t have to write any wordy bids selling yourself.
Unfortunately, this customer-focused attitude really cheats the freelancers. Although the base price is $5, Fiverr takes 20% commission. Following the ‘gig’ there is a 2-week waiting period before you are allowed to withdraw your money, where a further Paypal fee of 2.90% + $0.30 is deducted. So, that $5 gig is actually only making you $3.58 (£2.75). When you think about it, £2.75 is not a lot of money. In fact, you could make that much in barely 20 minutes of minimum wage work. The platform works if you are giving a service that is already completed – for example, providing a copy of a PDF – but for anything else, Fiverr is probably not worth your time.
Rather than listing jobs you are willing to do, Upwork is all about finding work that buyers want to complete. These get updated at a pretty rapid pace, but quality of the job description varies considerably. Some buyers are very detailed and provide you enough information to make a comprehensive bid, whereas others are vague and often lead to more work than initially presumed. It is up to you to create a proposal outlining exactly what they should expect for their money and how long it will take you to deliver.
As Upwork is an American website with users from all over the world, it is competitive. Often, buyers do not understand the amount of work required for their jobs and can even offer as little as $1 an hour. As there are workers from countries with lower cost of living and no minimum wage they still manage to get their job done, but we advise to set yourself a personal ‘minimum wage’. Don’t take on any work that will earn you less than £7.83 an hour. Like Fiverr, Upwork takes 20% commission and there is a further transfer fee of $0.99, and whatever currency conversion fee your bank charges. As such, £7.83 an hour becomes around £10 an hour ($13).
PeoplePerHour (PPH) is a little different to the previous two platforms in that it acts as a two-way marketplace. Like Fiverr, you can list the jobs you are willing to do (hourlies), but you can also apply for jobs that buyers post. They have a range of different job areas and you can ask the lister questions on the posting to help you deduce whether it is suitable for you. For example, “what is your word count?”
As a British site, work is not limited to remote listings, and there is less competition from overseas. Whereas Upwork jobs often have 50+ applications, it is rare for a PPH job to receive more than 20-30. There is an added bonus of the system working in Pound Sterling, too.
PPH will not let you charge less than £6 an hour for your work, which sets the base price for a job at £8 inclusive of their commission. PPH take 20% commission; however, as they are a British company, you can transfer directly to your bank account, thus waving any additional fees. The only way you might get caught out is if you forget to include VAT. For example, if you take a job for £10, 20% will be taken for commission. Of the remaining £8, you pay 20% VAT, leaving you with £6.40.
Although in its early days, UCLan Spark of Talent (SPOT) is set to make the first steps into freelancing a lot easier. You can list different portfolio for different skillsets, you can list whether you are free for work and potential employers can browse portfolio relevant to the job they have. They’ll get in touch and it’s up to you whether you are interested or not. Companies can also post job listings which you can browse yourself.
Unlike generic platforms, SPOT is a free service for UCLan students to list their portfolio and does not take commission. If you agree with a company that you will earn £15 an hour, then it means £15 an hour – not 80% of £15 an hour.
Sign me up!
If you want help setting up as a freelancer, come and speak to a mentor. They can make sure you’ve got everything set up with HMRC and that the way you sell yourself is going to be successful.