These are certainly turbulent times and seeing the headlines lighting up with news of the British Pound sinking to all-time lows is another concern for those of us freelancers based in the UK.
The global markets and political choices are leaving a lot of us feeling unsettled and worried about the coming months.
The tough reality is that most of us are seeing the value of our earnings, savings and pensions dropping before our eyes.
We were already navigating a cost-of-living crisis, and bracing ourselves ahead of a tough winter – which impacts freelancers especially because we mostly work from home and pay more in energy bills as a result. Now, with the British Pound threatening to go into free fall, we need to think about just how tough this period could be.
As freelancers, many of us have less security than those in traditional jobs. We are often more vulnerable to economic shakes. But letting fear and anxiety take over the steering wheel is not a great solution during challenging times.
It’s important to remember that while we don’t have control over external events, we do have control over how we respond to the situations we find ourselves in – so this is where we should put our focus.
So let’s stop, take a breath and think about what we can do now to best insulate ourselves against further economic shockwaves.
Of course, I’m certainly no financial adviser and there are much better-qualified people to give advice than me, so please do wider research and seek relevant support and help too.
Table of contents:
- The fall of the British Pound and UK freelancers
- Stop and assess your current financial situation
- Be strategic with your pricing
- Expand to other markets
- Diversify income
- Stay focussed and don’t panic
- Related articles
The fall of the British Pound and what it means for UK freelancers
Stop and assess your current financial situation
Of course, it’s understandable to feel worried and stressed at these events, which are outside of your control. Once you’ve done that, it’s time to stop, slow down and approach the situation with a cool head.
It might be worth spending some time analysing your current business situation – your bank accounts and your cash flow. Look at your upcoming projects and plans – do you have plenty of work, or are things looking a little thin?
Estimate your earnings for the next few months
How much money are you expecting to earn in the next couple of months? Would that amount be enough to cover your current expenses, and for how long? We know we can expect prices, and our expenses, to go up now, but this is likely to give you a rough idea of where you are at, especially if the client work gets a bit slow.
Assess your monthly expenses
Take a look at your expenses too, and see whether there are things you could potentially cut or scale back, or switch to a cheaper option. It helps if you set some criteria here, for example, cancel or find a cheaper alternative to any tools or subscriptions that you are not using for client work.
Are there some expenses that you could potentially share with another freelancer to make it cheaper for both of you? You might also be able to work at a friend’s house and agree to share the bills. Or sign up for a co-working membership to lower your energy usage.
Be strategic with your pricing
A drop in the value of the British Pound and the rise of inflation means that generally, things are getting more expensive.
Your project fees are buying less than they were a few months ago, and this seems to be a trend that is expected to continue for at least the medium term.
So you need to be thinking seriously about raising your prices – and then stop thinking and actually do it.
Raising prices is never easy, but you need to do it. Everyone else is – from supermarkets to energy suppliers – so to stay afloat and avoid devaluing your work, you will need to as well.
Regardless of economic downturns, your pricing should allow you to earn a reasonable income and account for the ups and downs like these (and like the pandemic).
Your clients are affected too
It is worth being careful with your pricing though. Some clients will also be suffering or under added pressure, so now may not be the time to rock the boat if you have a good thing going on.
If you’re happy with what you are earning, and it’s giving you security at this time, then just be careful about rocking the boat too much.
Package up your services
A good way to increase your prices without your clients feeling it is to offer your services as packages.
This way clients see that they are getting more value from you, and they can recognise it as a good deal – because getting multiple services from you is saving them time and money that they may otherwise have had to spend on hiring an additional freelancer.
Packaging up allows you to simplify your offering and save time on project work.
Expand to other markets
If you’ve been keeping your work only within the borders of the UK so far, now might well be a good time to start tapping into other markets for two reasons:
Why expanding now is a good move
First, you will be paid in a different currency – US companies, for example, are going to pay you in US dollars.
The USD is strong and the world’s reserve currency – which basically means it’s a pretty safe bet for investors.
If the pound continues to fall (as many economists expect) the US dollar will buy you more stuff in the UK.
Importantly, your services will also be cheaper than they previously were for US-based businesses. They will be getting a hefty discount on your previous pricing.
Also, clients in some other markets are not experiencing currency crashes and external challenges in the same way. So their demand for services is likely to remain more stable, while it might be affected more in the UK.
The UK and Europe are dealing with the energy crisis of the war, while the US is less affected by this because they have more energy independence. The UK is, of course, also still dealing with the consequences and adjustments of Brexit.
Do be careful to look at how you declare your taxes if you are starting to work internationally.
Where to start?
It’s easier than ever to work internationally as a freelancer.
If you’ve never worked with a client outside the UK before, a good place to start is to create a profile on some freelance websites that have job boards – take a look at our list, which includes Work For Impact, Good Gigs, and similar.
Facebook and LinkedIn groups are also good places to connect with potential clients and freelancers from other countries and to start building your network internationally.
Diversify income
When the pandemic started two years ago, many of us faced our biggest freelancing fear – seeing all of our client work disappearing overnight. A useful lesson from this was to avoid putting all your eggs into one basket.
Even as freelancers, we can diversify our incomes somewhat, and make freelancing less risky in the process – that really comes in handy during economic instability like this.
If you don’t have different sources of income at the moment, don’t worry, it doesn’t mean you’re too late.
For example, if you find your levels of client work dropping, you might want to create templates or products that you can sell, which are an affordable alternative to actually hiring you. These might suit clients with a lower budget while giving you a form of passive income.
This can even be a good opportunity to scale up and help more people while doing the same or probably less work.
We have a complete guide to a passive income for freelancers on the blog to help you get started.
Stay focussed and don’t panic
Finally, it’s really important that you keep your focus and don’t allow stress or worry to creep in. That will only paralyse you and waste a lot of brain energy. It’s hard but try to focus on the things we discussed above and on taking positive actions.
It’s important to find support and talk about worries and concerns that you may have, remember you’re not in this on your own! We have more content coming up to help with navigating the challenges we are facing.
Related articles:
Profit First System for Freelancers
The Hidden Costs of Freelancing You Need to Cover With Your Pricing
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Photo by Elena Mozhvilo
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