Taking the plunge into freelance life brings with it a lot of questions, so with a little help from NHBF director Tina Beaumont-Goddard and members of the FHA we aim to answer some of the frequently asked questions about a freelance barbering career.
How much money in the bank should I have before taking the plunge into self-employed life?
NHBF: The exact figure will, of course, vary from person to person and your personal circumstances. Don’t forget that you won’t be entitled to Statutory Sick Pay or paid annual leave. You need to think through your finances very carefully before taking the plunge and becoming self-employed.
Can you afford to take sick leave without sick pay? Do you have dependants? What would happen if you had to take long-term sick leave? Could you pay your rent or your mortgage? Ideally you should have a cash buffer – savings that would cover your outgoings for up to six months.
How and where can I order stock from when I’m freelance? Is there a minimum order?
Sheila Abrahams, FHA founder: FHA members have great choice when it comes to ordering stock and equipment. They have opportunity to set up Wella Direct Accounts and enjoy special privileges as well as discounted purchases. Members also enjoy 20% discount when shopping at Salon Supplies and 10% discount when shopping at Coolblades. None of these have minimum order charges.
Where can I get support for filing my tax and setting up a business account?
NHBF: One of the best sources of advice and support as you begin your self-employed journey is the NHBF (nhbf.co.uk/join). As a Member you can call our friendly and knowledgeable membership team for everyday business advice plus you’ll have free access to our legal helpline for help with trickier issues. You can also use our free legally watertight chair renting agreements and download detailed guides and fact sheets to help with every aspect of running your self-employed business.
What do I do if I’m ill and have to take time off work?
FHA member, Maria Di Martino: Unfortunately I’ve found that when freelancers fall ill and have to take time off, we do not usually get paid … You can look into getting specific self employment insurance which would cover you and pay out if you become seriously ill. You need to take the good with the bad … being a freelancer gives you so many perks, but you are rarely supported if you are ill. If you want to take Maternity leave you can claim Maternity Allowance as a self employed person – as long as you have met certain criteria.
What if I miss being part of a company? Are there any forums or social groups you recommend for freelancers?
FHA member, Jane A’Lee: There are numerous social groups online with my favourite being the Freelance Hairdressing Association (FHA) – I joined when I first ventured out as a freelancer and the FHA has grown immensely since then! I wanted to be part of an association that was recognised. The FHA has offered me so much more than I ever expected – training, friendships and all the support I needed as a freelancer.
How much annual leave should I take?
NHBF: Being a self-employed chair renter means you are your own boss and so can take as much annual leave as you like. However, it’s very important to remember that as a self-employed person you will not be entitled to paid annual leave. This means you will need to work out for yourself how much annual leave you can afford to take and how you will cover the costs of your business and your personal outgoings such as rent/mortgage and other household bills during the time you are on holiday without an income.
How do I know when is the right time to go freelance? Should I have a minimum number of clients?
FHA member, Maria Di Martino: There is never a right time. It is down to the individual. Personally, I don’t think you need to have a minimum number of clients. You can gradually increase client numbers when you are up and running. You are in control of your own work load so it is up to you how little or how much you work. You can advertise for more clients or word of mouth. It’s far more easier to advertise now than 10/15 years ago. Facebook and Instagram are great at showing off your work.
What options do I have when it comes to pensions?
NHBF: Employers now automatically enrol their employees in pension schemes, but as a self-employed person you won’t qualify for this benefit. Also – remember that the state retirement age has risen so you will have to wait longer for your State Pension.
As a self-employed person, you should think seriously about organising your own pension. There are several options:
- Personal pension: you can choose which pension provider to have and make regular contributions into your pension pot.
- Stakeholder pension: this is a type of personal pension with low and flexible minimum contributions. The charges associated with stakeholder pensions are capped.
- Self-Invested Personal Pension (SIPP): this is a government-approved personal pension which allows you to make your own investment decisions.
Consider which is best for you – they will vary in the investment choices available; the amount they cost; and how much flexibility you will have in withdrawing the funds.
Another alternative is to save with the National Employment Savings Trust (NEST). NEST is a government scheme set up to help people save for their retirement. Self-employed people can join NEST. Find out more.
What’s the most common mistake people often make when they go freelance?
Sheila Abrahams, FHA founder: Generally they don’t charge enough for their services. They also don’t appreciate how lonely it can be out there on your own plus they can find it difficult to appreciate the true value of the service they’re providing. It’s a mistake to do it on your own without the backing of the FHA. Belonging to the FHA gives you confidence and you have the full backing of the organisation and its members to support you.