2022 review of the year

2022 was another good year business-wise. My turnover continued to increase, I worked with a number of new clients, and I’m was fully booked 4-8 weeks in advance for most of the year. I also attended BarCamp Manchester in person for the first time in 2 years, where I ran an ‘ask me anything’ session about freelancing.

Things I did for the first time

Enforced late payment termination of service: I make it clear to clients on my How I work page and in my Terms of Business Agreement that persistent late payment will result in termination of service. Unfortunately this year I had a client who repeatedly paid late, and eventually I had to bring the relationship to an end.

Mentoring as a paid service: This year I launched my PHP Developer Mentoring service, in which I work with developers to discuss technical problems (including working through solutions together) and help them improve their skills with tools such as version control. So far it’s worked well, I’ve received positive feedback, and it’s something I really enjoy doing. I still have a couple of slots available if anyone else would like to use this service.

Tracking new business enquiries: My mechanism for dealing with new enquiries was to leave emails in my inbox until I had agreed work or enough time had passed for me to assume the work wasn’t going ahead. This worked on a day to day basis, but I didn’t have a structured history of who had contacted me and why the work hadn’t gone ahead, which made it difficult to identify potential problem areas. This year I created a simple spreadsheet which takes takes incoming enquiries from Pending to either Agreed and Completed, or Abandoned. I now have a much better idea of why I’m not winning work – often I don’t hear back after sending over my rates and terms – and I can identify people who regularly contact me but never go ahead with work.

Things I’ve changed

More fixed fee work: I used to charge for everything based on an hourly rate, as this fairly reflected the amount of time involved. However, this didn’t always reflect the value of my time – especially for tasks which I could complete quickly. For example, if it takes me 30 minutes to fix a problem which is stopping a website from processing orders, the value of that work is substantially more than £25. As such, I’ve moved towards charging fixed fees for small, well-defined, one-off projects, and these fees are set to reflect the value to the client. I also charge a fixed monthly fee for mentoring, as again I think the value is much higher than my hourly rate. I still charge by the hour for ongoing work, such as clients who want to book a block of my time each month.

Terms of Business Agreement: I’ve added clauses to make it clear that I work on a non-exclusive basis (i.e. for multiple clients simultaneously) and that I sometimes work for clients who consider themselves to be competitors. Although I’ve always been open about this, I felt that it needed to be in my contract so that everyone is aware and has signed off on it. I’ve also updated the wording to make it clear that signatories are entering into a contract on behalf of the relevant party, and that they have the authority to do so.

Things to improve for 2023

Form a limited company: I haven’t had chance to do this yet as I need to set aside some time to go through all the requirements and make sure that everything is in place before I incorporate. I also haven’t decided whether I will run everything via the company or just new clients who I sign up after a cut-off date.

Launch subscription sites: I have a number of ideas for useful websites which could be offered on a paid subscription basis, to help diversify my income. Most of these are sites I would want to use myself as well, so I have an additional incentive to get them up and running. I hope to launch the first one in early 2023.

Adopt new accounts package: From the tax year starting April 2024 (though recently pushed back to 2026), I will have to comply with Making Tax Digital, a UK government initiative to send self-employment earnings data to HMRC throughout the year, instead of just filing a single self-assessment form. Unfortunately this means changing to accounting software which supports MTD, as I can’t make my existing software (which I developed myself) work as there are too many hoops to jump through to get approval. I need to spend some time researching the options out there – though I’d welcome recommendations from other freelancers.