Table of Contents
- What Is The Difference Between A Freelancer And An Employee?
- Which Fields Of Activity Are Suitable For Freelancers?
- Who Can Become A Freelancer “Self-Employed”?
- What Is The Difference Between Freelancers And Self-Employed?
- Advantages and Disadvantages Of Becoming A Freelancer
- What Is There To Consider As A Freelancer?
- How To Become A Successful Freelancer In 7 Steps
- What Helps To Become A Successful Freelancer?
Successful Freelancers choose their jobs, work whenever and wherever they want and travel around the world. If you want to become a freelancer, simply choose an expert area and start with ten orders in a motivated day. Unfortunately, the path to independence is quite a different one. There are hurdles and stumbling blocks and above all a lot of work (HARD WORK).
Working as a freelancer or self-employed person has a lot to do with self-motivation. Many tasks need to be coordinated, prepared and made easy.
How do you become a successful freelancer? Let’s Say you are one. How do you become a good freelancer? Don’t say.
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What Is The Difference Between A Freelancer And An Employee?
Employees in a company report to their boss. They are bound by instructions, work on-site and usually for a monthly wage without reference to performance. The employer pays social security contributions for each employee, who in turn receives a pension after his working life. A lot is regulated automatically for employees, for example, the contribution to health insurance.
Freelancers are not regularly paid by just one employer. The self-employed work for various clients on a fee basis. They look for their customers themselves, always renegotiate the salary, take care of their bookkeeping and taxes and meet deadlines. People who become freelancers are their own boss – with all the advantages and disadvantages.
Which Fields Of Activity Are Suitable For Freelancers?
In many areas, there are self-employed people who have built up expertise. The professions where the freelancer is not continuously present in the company are best suited for this. After all, one advantage of working independently is being able to work anywhere. The following fields of activity are therefore particularly suitable for freelancers:
A List Of Jobs For Freelancers:
- IT industry/programming
- Design / photography / video production
- Marketing / social media
- Text creation / translation / journalism
- Coaching / advice / course instructor / lecturer
- Artistic activities
- check a 110+ freelancers job list
Anyone who has already gained experience in one of these areas or has the expertise to do so has a good chance of becoming a successful freelancer. Companies are increasingly registering the benefits that freelancers bring them. However, the choice of profession is far from sufficient. If you want to become a freelancer in the long term, you also need a lot of perseverance.
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Who Can Become A Freelancer “Self-Employed”?
Anyone can become a freelancer. Self-employment is either the main job or takes place on the side. Those who receive unemployment benefit have a limit of 15 hours per week with ALG I, and there is no limit with ALG II. In both cases, income from self-employment affects the amount of unemployment benefit.
In the case of employees, it is usually stated in the employment contract whether the employee informs the boss when taking up a second job. A ban on competition is also regulated here if there is one. This means that the employee is prohibited from working for the competition of his main employer.
What Is The Difference Between Freelancers And Self-Employed?
Freelancers, or self-employed, are all people who work independently and without a (permanent) employer. Freelancers are a special group of self-employed workers that is set by law.
“Independent scientific, artistic, literary, teaching or educational work, the independent professional activity of doctors, dentists, veterinarians, lawyers, notaries, patent attorneys, surveyors, engineers, architects, commercial chemists, accountants, tax consultants, consultant economists, and business economists, sworn accountants, Tax representatives, neuropathy, dentists, physiotherapists, journalists, image reporters, interpreters, translators, pilots, and similar professions. “
All freelancers are therefore Self-Employed, but not every freelancer counts as a Self-Employee. The advantage of working as a freelancer is that they do not pay trade tax and there is no obligation to register in the commercial register. The tax office decides whether an activity is freelance under this law. Otherwise, the self-employed person is a trader.
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Advantages and Disadvantages Of Becoming A Freelancer
The romantic idea of self-determined work makes many dream of being a successful freelancer. There are some advantages to not being bound by instructions and doing the work yourself.
Employees who dare to become successful freelancers have often been dissatisfied with their jobs. This is due to the work itself, the colleagues, the corporate philosophy or the time that is missing due to a permanent position in private life. Former employees already have the necessary skills and focus on business management. In addition to the job in addition to freelances, the own cash register improves. If you start your own business right away, you often already have an idea that you would like to implement.
In addition to the many pluses that make people become freelancers, there are also long-term disadvantages behind the work. Being self-employed includes all aspects of working life, from management to accounting to self-motivation.
1- Advantages Of Being A Freelancer:
- Make independent decisions
- Just be accountable to yourself
- Pick the orders and customers
- Define your hourly wages
- To work from home
- Or work anywhere in the world
- Divide the working time as desired
- Work-life balance
2- Disadvantage Of Being A Freelancer
- Uncertainty about income
- Paying health insurance, nursing care insurance
- Paying income tax, business tax, sales tax
- No paid vacation or continued payment of wages in the event of illness
- No automatic pension
- Customer acquisition and order procurement
- Constantly high-quality work performance
What Is There To Consider As A Freelancer?
Freelancing is a complete company in one person. Every department in which many people work in large companies falls into their own hands. On the one hand, it’s about day-to-day business: Obtaining and processing orders. For this to work smoothly, the office work behind it is necessary: accounting and organization.
1- Registration At The Trade Or Tax Office:
Freelancers only register with the tax office and ask for a questionnaire on tax registration. All other freelancers will need a business license. The small business regulation is an exception to this. That means that last year they didn’t earn more than 22,000 dollars (from 2020) and still register with the tax office. The registration brings the tax number that belongs to the invoice to the customer.
2- Put Taxes Back
If you want to become a successful freelancer, it is best to quickly get used to your own money. He pays income tax on the income that every self-employed person makes. There is a basic allowance for income tax, which however changes every year.
The situation is different from the sales tax. Freelancers only pay these if they earned more than 22,000 Dollars (from 2020) in the previous year and their sales do not exceed 50,000 Dollars in the current year. Otherwise, they fall under the small business regulation, where they do not show sales tax on invoices. If the turnover exceeds 50,000 Dollars, the sales tax will be charged.
Trade tax for natural persons and partnerships (which includes most freelancers) only accrues when the income is more than 24,500 Dollars per year.
3- Pay Social Security:
Health insurance is compulsory in Germany. If the employer pays half of the contribution for employees, freelancers pay it in full. They may remain in their statutory health insurance, but often they only take out private insurance. Long-term care insurance is automatically included in a statutory health insurance company and must be booked in a private one. Optionally, the self-employed take out pension insurance and occupational disability insurance.
4- Calculate Hourly Pay Rates
All freelancers will pay their salary and all other expenses from sales. An hourly rate that is too low leads to frustration and money problems. Freelancers who try to outperform their competitors with low wages often end up below the minimum wage.
5- Avoid Bogus Self-Employment
Freelancers are classified as normal employees if they mainly work for a client. The following applies here: Anyone who purchases 5/6 or more of their turnover from a company and is even there by the instructions in terms of time and place, no longer works independently. The tax office usually checks individual cases.
6- Form Reserves
Freelancers independently save money for a sluggish order, vacation or illness and especially for retirement. They also calculate the usual amount of vacation and illness in their hourly rate.
7- Let The Employer Know You Are A Freelancer
As a part-time job, the self-employed often must inform the employer about it, as stipulated in the employment contract. A general ban on part-time work is not permitted. However, the employer has the right to request an adequate benefit from the employee that does not restrict the part-time job. A competition ban for the employee is possible. The boss prohibits a part-time job at a competitor.
How To Become A Successful Freelancer In 7 Steps
How can I work as a freelancer now? A well-thought-out business plan and a strong concept will help. It is important to think through the following points step by step:
1- Name Your Products/Services
The offer of a freelancer is his capital. Its products or services form its livelihood. The self-employed person makes it clear to his potential customers what he offers and why they need exactly that from him.
2- Plan Measures To Win Customers
Customers do not come to the best offer on their own. If you want to become a freelancer, you should consider a strategy of how and on which channels you can reach your potential clients. This process is never complete and accompanies independent lives every day. Many freelance and job portals on which the self-employed advertise their profile are also suitable for this.
3- Estimate The Amount Of Time And Set The Hourly Pay Rate
From experience, the self-employed estimate their workload for their offers well. The time spent changes with more experience and remains adjustable. However, it is important to assess whether an order can be created and when it is the next one. The hourly rate depends on this. In the best-case scenario, a few orders per month bring in enough money, just like many small orders. Hourly wages include all costs that a freelancer faces privately and professionally. Instead of an hourly wage, there is also the concept of daily or weekly rates, flat-rate remuneration for an entire job or amounts per word for copywriters and journalists.
4- Registration Of A Trade Or At The Tax Office
successful Freelancers and small business owners register directly with the tax office. For the other freelancers, a visit to the trade office is due. Freelancers are asked to checkout by both of them, which is why they save reserves to pay income, sales and trade tax.
5- Find The Right Projects For You
From home, in a co-working space with other freelancers or anywhere in the world – the choice of location is, at least for a certain period, fixed. Anyone new to the industry tries out where and how they can work best. Digital nomads travel from place to place, others set up their office in their hometown according to their wishes, the third sit with pajamas in the home office.
6- Manage Orders, Negotiate Fees And Work
The work that freelancers want to do begins. Orders, deadlines and other orders fill an everyday life. Negotiating the payment is an important part that comes up again and again. Successful freelancers do not back down here and insist on what they need to live.
7- Makeup Reserves And Crisis Management Plans
Life as a successful freelancer is not very secure. For this reason, it is important to create a sufficient nest egg and to be prepared for unexpected life situations. From the small laptop crash to the big catastrophe like a care case in the family, everything has to endure as well as possible.
What Helps To Become A Successful Freelancer?
Discipline, courage, and perseverance. And the talent in the field of activity. Many little digital helpers support freelancers in their everyday work. The advantage of a digital office is that it is on the laptop and automatically comes with you wherever you go.
- The own website is the point of contact for customers and interested parties. Here the self-employed are the only ones to have full influence on the content. Social media presences are just as important and are used for communication, but the possibilities are limited. A website offers space for references, work samples, and an individual CV.
- In cloud storage, all current projects are safe. Even if your laptop gives up the ghost, the desperate freelancer gets his data quickly and easily. Various providers provide a set amount of storage free of charge.
- Many of those who want to become freelancers see this as an opportunity to travel. You have the option of having your letter mail digitized. Some companies offer this service and the letters end up in the inbox as an email.
- Synchronized online calendars remind self-employed people of their appointments on every device. If the calendar on the laptop, cell phone, and other devices is the same, all appointments are kept in mind.
- Online communication sounds simple but is extremely important when communicating with customers. In addition to emails, it makes sense to discuss details on the phone or even in a video chat.
- A work cell phone separates private life from freelance. The advantage is that the work cell phone is also out when quality time with friends and family is coming up.
- In a business account, freelancers have a better overview of income and expenses than in a mix with the private account. Personal bookings often go out of your account. It is advisable to transfer your wages to your private account. A third account to save for tax also makes sense.
- An electronic time recording helps the time management to survey for individual projects. A time recording system like clockodo uses the self-employed when they adjust their hourly rates or plan jobs.
- Digital invoice applications include all of our customers and projects and send out finished invoices directly as e-mails. This means that freelancers never forget an order and all invoices go to the recipient.
- Online project management tools offer a precise overview of all tasks. Many programs represent a digital pin board and the tasks act like sticky notes. With well-thought-out project management, freelancers will be able to clear their heads for their actual work.
Becoming a successful freelancer involves a lot of self-organization. Even a certain calm, if something goes wrong or there is a slump in orders, does not harm. Those who keep an overview, take all necessary precautions, save taxes and do their work continuously have good chances. Many digital programs also help you not to forget anything and take the paperless office with you wherever you go. With a well-thought-out business plan and the right measures, working as a freelancer is an interesting alternative to full-time or permanent employment.