Web Designer Going Freelance

MathewMayes

Hello,

After long deliberation I finally handed my notice in last week at the company I have been with for 2 years as a web designer. My salary has stayed the same (£18k) the whole time with no sign of progression despite me working unpaid overtime. I've been doing websites and design work for family/friends in the evenings to help me cover my bills and have had to turn some work away due to not having the time in the evenings. Recently a contract opportunity has arisen with a former colleague to earn £150 per day, with work guaranteed for the next 6 months. By quitting my full-time job to freelance, I will no longer have to turn work away and can also earn a lot more. So despite the tough economic times, it feels like the right decision as there is no progression in my current workplace.

I'm registering as a sole trader and looking in to the possibility of getting a business bank account, purely to keep my personal finances separate. My first question is: Will I have any trouble getting access to a business account, considering I've been in my £2k overdraft since my student days (6 years ago) and have pretty much maxed a £4k credit card? Should I even bother?

I'm going to need to go to a lot of meetings to demonstrate websites to clients around the UK and possibly abroad, but I only have a desktop PC. So my second question is: Are there any microfinance grants/loans I could be eligible for to help me purchase a laptop to get started? I'm going to need a very speedy laptop that will last me and can afford about £200 towards it myself, but are there any small grants/loans of £200-1000 available to young (I'm 26) tech startups for this purpose?

Thanks in advance for your help.

Mathew

chalkie99

Wow! You had a steady job with regular income and even with extra work you are in an overdraft and maxed on a credit card. That seems like a pretty reckless decision to give up the regular wage. :eek:

I don't see that you need a particularly expensive laptop for web design. We get by perfectly well with a £400 model running heavy duty graphics and RIP software powering various cutters and wide format printers with very large files.

Maybe pick up a secondhand machine for a while until you have money coming in. I think chasing a grant for the sake of a couple of hundred pounds is a poor use of your time and likely to be unsuccessful.

Even for a grant you are going to have to show a realistic business plan and show you have some of your own money to make the enterprise work.

phill99

Providing you are not in default with any loan or cc repayments and don't exceed you agreed over draught, a business account shouldn't be an issue providing you don't want an OD on that as well.

For a basic business bank Account without branch facilities and that is always free, you may want to look at Santander Business Banking.

Remember to put money aside for tax!

You'll be lucky to find a grant for a new laptop. £400 is hardly massive investment.

IrishGypsy

I'd recommend getting a second hand laptop as well, you can likely get a more than sufficient one for that price. If your skills are as good as you believe them to be (to go S/E), you can make the limitations of what laptop you get work for you (whether that's working with Notepad++ for coding, or using a more memory efficient version of photoshop etc).

When starting out doing iPhone app development I could either save up for an uber-expensive Mac Mini/laptop or improvise. I instead spent £200 on a 'hackintosh' netbook from a mate. It was a very crampt coding environment, but it worked and I used the first months revenue to buy a mac mini (just before they went up in price).

ONLY make an investment if you know you can make the money back for sure. Otherwise it's a risk you might not be able to afford to take.

I too may be going S/E after years of FT work (through no real choice of my own ), but thankfully I've been running the business in the evenings with all the equipment I need purchased through re-investment of revenue.

Bets of luck. :beer:

JimmyJar

I wish you well with your venture. Agree though giving up paid work,,,,,

best of luck

tradecarbon

Hey Matthew,

Being in the same field as you, I would suggest that you put the bank account on hold until your business is up and running. Wait until you have funds to pay for a laptop.

It can be exciting times starting out on your own and the urge to run out and get new equipment is almost overwhelming. Resist the temptation!

For added information, I have a couple of clients where I go to their offices where I have a laptop, telephone and dual screens.

Working for yourself is great, I wish you all the best.

heart_free

Where are you based? In many areas of south wales there are lots of business developments grants that can be claims for 50% of any capital expenditure - you have to have a business plan etc, but thats not much of a problem.

Also in South Wales the chamber of commerce has a Microzone for small business - its £56.00 but gives you access to advice and resources of the chamber plus free business banking for 3 years. Don't forget your insurance!

I'm running my digital marketing business alongside a full-time job and its very hard to do both. One day I'll be in your position and ready to go it alone completely!

Mistral001

You do not need a business account unless your bank insists and they are unlikely to do that unless you have a lot of flow in and out of your account to do with your business.

My accountant told me when I started that having capital is the most important thing in business. Forget about the people who brag about becoming millionaires with only £10 in the bank when they started. They make good TV but are very unusual.

To be more positive, I would seek to pay off any overdraft as quickly as possible and have some money in the bank before spending a lot on anything. Concentrate on service and charge enough right from the start. It is almost impossible to put up your prices and you could get into a spiral of reducing prices rather than improving service and being better than your competition. Once you start competing on price alone then it is amazing how steep that slippery slope becomes.

BigAunty

For a business loan, see the princes trust website. The business link website also has a section on finance. Grants for businesses are as rare as hens teeth.

http://www.princes-trust.org.uk/need_help/enterprise_programme.aspx

pyuicd

I don't think you are necessarily making a bad choice quitting the regular job. It all of course depends on your attitude to risk, but with £150 per day for the next 6 months you are going to be doing a lot better than your old job to start with. It will be an invaluable experience at the very least. What level are you at in terms of web design and programming?

InsideInsurance

Are you intending to be doing direct to end client work or simply contracting with another design agency?

Whilst £150/day is evidently a big step up from what you were on, if you were unhappy on £18,000 then I would certainly argue that the old method of working contractors rates which would have put you on £180/day may have been a better target.

Remember to put aside money for tax but also consider the fact you have no security, no insurance, no holiday pay, no sick pay etc and so certainly consider getting something in place so if your hit by a bus tomorrow you dont go from earning circa £36k to basic state benefits