If you’re thinking of becoming a freelancer, good for you! Today, it is easier than ever before and the market is also well on track to hire temporary expertise. To help you along the way, we have summarized a couple of concrete tips and advice. A guide on how you can proceed and take that thought into action. Everything from starting your business to how to charge for your work. We direct you through the essential steps of becoming your new independent you.
The labor market of the future is heading more and more towards a gig economy, mobile teams, and now more than ever working remotely. Being a freelancer offers a lot of benefits if it suits you as a person and your life situation. There are, as in everything, both advantages, and challenges of being on your own. It can offer you a great work-life balance, but you also depend on yourself and you only. As a freelancer, you need to get clients and assignments. Networking is becoming increasingly important as you need to make new contacts.
You need to market and sell yourself.
But also before that, think your offer through. And how your offer is best packaged for you to be perceived as an attractive choice. Another article here touches on this topic in more detail: Branding yourself.
The business stuff.
Ok, you got it. But how do you start your own business from the beginning? First of all, you need to decide what type of business you are going to form. But do not get stuck here, it can be changed later. The most important thing is that you get started. The most common company forms are;
- Sole trader (enskild firma, F-skatt)
- Limited Company (Aktiebolag, AB)
- Trading Partnership (Handelsbolag)
And the variant most widely used today by freelancers is as Sole trader. But having a Limited Company is actually becoming more common, especially for those who decide that freelancing is their more long-term choice.
Undoubtedly the best site to get help from with this first step, and a lot more, in starting your business is verksamt.se, run buy The Swedish Tax Agency, Bolagsverket, and Tillväxtverket. You can read more about the different types of companies here: https://www.verksamt.se/en/web/international/starting/registration-and-tax
And then it’s time for registration
At verksamt.se you can also easily register your company. With your e-identification, you can go through the necessary steps on their website.
Do not forget that the company should also have some kind of name. But, how that process is best handled, you have to figure out for yourself. Good to know, however, is that many obvious names are already included. And then also its web domain. But, by just adding a simpler prefix, such as Stockholm, or Sweden, it can still work.
If you don’t have a company up yet or if you are indecisive about starting your own business you can always go through companies that handle your invoicing. Services such as coolcompany.com or frilansfinans.se. They take care of the invoicing, administration and taxes for you and pay your salary. For that they charge you a smaller percentage cut of your fee.
For freelancers, hourly or fixed fees are the most common pricing models. But calculating a correct and fair price is not always easy. To figure out how much you can charge, it is smart to benchmark the market and find out what other freelancers get paid for similar services. You can find some overall statistics at scb.se. Another way is to ask people in their network who have knowledge about this.
Your fee may depend, among other things, on whether it is a full-time assignment, or a shorter part-time gig. But of course the price is also affected by what task is actually to be performed. Don´t forget that your fee should cover a lot. Your salary, social security contributions, pension, vacation, and also variable costs such as software, materials, and maybe travel expenses. Depending on what you are going to do, you may also need to invest in hardware, such as a computer or other expensive equipment.
Be clear and make sure to agree with the client on not only what the expected deliveries are, but also the fee, working hours and other important details. It is always difficult to change or agree on this afterwards. It will most likely help you in a future relationship with your client.
There are many ways to calculate your fee. And some are better than others. Be sure to get help here if you are unsure. You can find some direction on how to set your fee if you use the 2,4% method. A fairly simple way to at least check if your more sophisticated calculation is correct.
You then start by determining a reasonable monthly salary for the intended work effort and delivery, but also your experience and skills. Then take 2.4% of the intended monthly salary and you have your hourly fee ex VAT. Ex 35 000 SEK x 0,024 = SEK 875.
- Social fees and pension
- 8h working days Mon-Fri
- 5 weeks paid vacation
- 70% billing rate (VAB, illness, public holiday, etc.)
- Costs (insurance, software, rent, etc.)
- A profit margin of 30 %
Maybe you have the knowledge yourself to solve the task with your accounting. It is important that it is correct. Especially when it comes to taxes. If you do not have time or lack of knowledge, our tip is to hire a consultant.
In fact, there are also very good online services that solve most things when it comes to accounting, such as wint.se or dooer.com.
The Accounting Act (bokföringslagen) states that all business transactions for companies in Sweden must be collected and compiled in income and balance sheets, and in some cases also an annual report. You really need to keep your finances in order. Especially to be able to report VAT and deductible preliminary tax in your declaration and also declare correct income information in your tax return.
If the shit hits the fan
Unfortunately, sometimes things happen that should not happen. Such as an economic downturn, a customer going bankrupt, a mistake being made or something else boring. And then it’s smart to have been foresighted. It may feel sad, but it’s worth it. Ask any other business owner. You need to secure your situation and income if you’ll be out of work or if something negative happens to your business.
- Don’t start without business insurance.
- Plan for pension insurance or private pension savings that compensate for missing occupational pension.
- Join an unemployment fund (A-kassa).
Manage and keep track of time
There are lots of smart awesome tools that make life easier for an entrepreneur and freelancer. Especially with a focus on time reporting, communication and planning. Some handy links for you:
Simple time tracking and reporting tool: https://toggl.com
Simple project planning tool: trello.se
Product design platform: https://www.invisionapp.com/
Communication tool: http://www.slack.com
Tools to build your design system: https://blog.bitsrc.io/7-tools-for-building-your-design-system-in-2020-452d9c9b3b8e
Agent or not?
A big part of being a freelancer is being free. But some things may not be so fun or very time consuming. Here, a collaboration with an agent can be smart. But really no requirement.
An agent can help you get in touch with interesting gigs and clients who otherwise can be difficult to get in contact with on your own. An agent can also help you negotiate fees and possibly also handle some of your administration.
There are several serious agent firms in Sweden and Stockholm. TRIB is one of them. At trib.se you can show interest in being part of our network, but also continuously receive information about all sorts of active assignments. You can also easily get in touch with us as an agent.
Finally. Hope the above information has been rewarding for you, in your process of possibly becoming a freelancer. Remember, you are not alone. There is always someone else who can help in the growing crowd of freelance workers. However, TRIB is also on hand if you think about it, big or small.
For more inspiring content, please read some of our freelance stories here.