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We're busy updating our Work Well during Lockdown guides to reflect the situation we find ourselves in after 200+ days in varying states of pandemic restrictions - the final section of the guide is Chapter 3: Self-employment and COVID - with specific thoughts for those who are freelancing or self-employed.
Uncertainty is a part of self-employment, and whilst COVID has perhaps increased the number of challenges and curveballs thrown at us, in many ways, we have to accept that uncertainty is part of how we work, and build a healthier relationship with it.
Try and focus on the aspects of your work that you do have control over, and recognise the things you do not. Spending energy on what you cannot control will never be fruitful.
Allow yourself the emotional response to uncertainty - coming to terms with how you feel helps to manage stress, rather than fighting it and come to accept that life is full of uncertainty.
Identify what triggers any anxiety around uncertainty - and manage that. It might be media coverage, it might be constant notifications or conversation around COVID, it might be not having a plan in place.
Don't make rash decisions - whilst COVID isn't going away any time soon, consider the longer-term picture, and what changes you can make to steady the ship today, whilst thinking about your direction and business for the future. Many people are understandably considering making a shift away from self-employment, and looking for security and stability. Nothing is forever, and taking time to think about your options and discuss them with your support network is helpful.
Lots of people are turning to self-employment as a result of COVID, perhaps through being made redundant or furloughed, or using this time to reflect on their career and making an active choice to work for themselves.
If you've recently joined the self-employed workforce, establish your foundations for good mental health at work.
Take stock of your financial position and understand what you need to make each month, what you need to put aside for tax and emergency funds, and how long you're able to not work for.
Shift your mindset from employee to employer: you're running a business now, and your staff are your most important asset (that's you!). Take breaks, establish boundaries between work and home, and develop some good healthy working habits.
Build a support network of other people who are also self-employed, so you're able to ask questions and understand how things work. Don't work alone, join communities online who can help.
Consider whether this is a short-term or long-term decision, and plan for the future accordingly. If you're seeing self-employment as a long-term way of working, start to develop a plan for the future, not just the work you're doing today. This includes your skills as well as your finances.
Lots of us are feeling tired - fatigue from months-on-end of the lockdown is making it harder for everyone to keep focus, to keep motivated, to stay on task.
When you're self-employed, it's harder for you to get inspired or stay motivated, if you're the only one who is having to keep the energy levels high.
There are a number of things you can try to keep your motivation on point:
Whilst no-one wants to plan for falling ill, it's unfortunately possible that you may not be able to work due to illness, or caring for someone else who is unwell - and this affects the self-employed more than most.
Be proactive and build a buddy system with a fellow freelancer you trust who can help, should the worst happen and you're not able to do work you've committed to. Whilst you're not going to get the income, the client relationship is maintained and you can worry less about your reputation and breaking a contract, and focus on rest and getting well.
Creating small pods of other freelancers with similar skills where you can team up and share work also allows you to scale when you're busy, but this trust takes time, so start now rather than when you need it.
Setting healthy boundaries when working for yourself can be challenging - and without the benefit of being able to leave the house or work from other spaces, it's really important to ensure you have some good habits in place.
The advice in our earlier chapter stands true, but is even more important when you don't have colleagues who are 'going home' for the evening.
Be careful with working into your rest time like evenings and weekends, and consider turning off your notifications or putting your work away for the night when you're done.
It's obviously not as black and white when a client calls if you're not working, or an urgent email comes through - you need to balance the success of your business with your own health - but bear in mind any precedents you're setting - if you start to reply to that email at 9pm within minutes, what expectation are you setting for the future.
With increased uncertainty around whether businesses are able to trade, you're at risk of more clients defaulting or not able to pay, so only invoicing once a month means you're open to potentially losing a month of work.
Open a discussion with your clients to invoice more frequently, perhaps after 7 days or 14 days of work, depending on how you work, and ensure some upfront deposits for longer-term projects.
Additionally, negotiate shorter payment terms, perhaps 14 days rather than 30, so your cashflow is more steady. Review your contracts to understand your liability in situations where projects are cancelled due to COVID, especially if your project is already underway.
Unfortunately, late payments are a far too common reality of being self-employed - and they're only increasing during the pandemic. Not only do they affect cash flow, they also create additional stress and workload to chase - and it can feel difficult asking another small business for cash, when you know everyone is having a hard time.
It's important to stay both professional and human - ensure your client is communicating clearly to understand what is holding up the payment, and ask for clarity around when it will be paid. COVID is making things harder for all businesses - but if you have delivered the work, you're owed the payment.
There are services that guarantee your invoice payments or provide immediate payment if you're consistently struggling with cashflow.
Consider what additional products and services you're able to offer, especially if your sector is facing significant disruption. Many freelancers have turned to look at passive income streams such as creating content, training, digital services and coaching. Have conversations with your client and discuss how their businesses are changing, and see what new opportunities might exist as they pivot to new types of activities too.
The patterns of the year have been disrupted, and it's hard to take a break - even if you're allowed to travel, the stress of the situation might not be easy to leave behind - but it's essential to make sure you're taking time off and away from work, in order to rest and restore.
Treat your holidays as a target. In a job, you only have 25 days to take. In self-employment, it can help to aim to ensure you're taking those 25 days. Plan them into the calendar ahead - so you don't book work over the periods you've set aside for yourself, and try to space them out across the year. If you're responsive and only taking time off when you don't have work, your health will be a victim of your own success, and you'll soon run out of energy.
If you're struggling to take a break, try buddying up with other freelancers to cover the time when you're not online.
We can never really plan for such global pandemics - but we can have structures in place to soften the impact. Trying to put some of your income aside for an emergency fund can be hard, but essential, to help smooth out the peaks and troughs which self-employment can lead to.
During the pandemic, where possible, keep paying into the emergency fund, treating it like tax - as percentage of your income. If you're having to dip into the emergency fund, take some time to understand how it affects the rest of your finances, and review your situation to ensure you have an accurate view of your money. It's also important to review your emergency fund regularly - as your income and outgoings can change over time.
Money worries are a significant cause of anxiety and stress - so if you're feeling financial pressure or concerned around debt, look for support, and talk through your situation with someone who can give good advice on restructuring your finances.
There are millions of people who are currently without financial support during the pandemic due to gaps in governmental policy or individual situation - but the support on offer is constantly changing under both pressure from community groups and changes in lockdown restrictions.
Keep on top of what changes are being made, and review the support available again - you might find there's something which is now available to you.
It can be overwhelming, and often communication from government is not clear - but MoneySavingExpert are consistently providing great, simple and up to date information on what is available for your situation.
Most importantly - working for yourself doesn't have to mean working by yourself.
Find a support network and join a community of others who are also self-employed. There are many wonderful online groups which offer peer-support and a space to ask questions and seek advice.
Check-in with your support network daily - even if you're doing fine, as it helps others who might be struggling, and invite others who you know would benefit from being part of a group.
If you are finding things hard, try to share what you're going through. Not only does talking help you figure things out, it helps others by showing that asking for help is not a weaknesss or failure.
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