This is how you start as a freelancer.
Interested in creating a career as an independent entrepreneur, yet pondering on the details? We conducted a linear guide based on frequently asked questions.
Why freelance?
Experts who have switched from employment to freelance tend to highlight the following as the contributing factors:
- Freedom of choice (projects, tools, customers, working hours, location)
- Higher compensation for work performed (1.5–2 times the amount compared to traditional paid work)
- Low threshold for business expansion (e.g. product innovations)
- Tax benefits
- Strong demand for technological competence
- Getting started has been made easy
- Low risk and cost of failure
Where to get gigs? Do I need a network? Do I need salesmanship?
In principle, acquiring a freelance project is not very different from applying for traditional paid work. As a rule, projects can be acquired either by selling your services yourself or by outsourcing the sales to an agency or consulting firm.
If you decide to sell by yourself, you should start building your own network with the people responsible for the client companies’ projects, products or teams. You should also familiarise yourself with modern sales and practise systematic sales work.
An agency handles sales, agreements and the construction of a network on your behalf. For example, at Finitec, we first verify your interests and conditions, on the basis of which we proactively offer you projects that meet your criteria.
Consulting firms operate partly on the same principle as agencies, although consulting firms have a financial incentive to primarily offer the company’s own experts for projects.
It is therefore worth evaluating different options, the time spent on these and reflecting on them with regard to what matters most to you at work and outside of work.
Is it hard to find an assignment or project?
The workload for the acquisition of an assignment mainly consists of establishing and maintaining customer relations. The more you are aware of both the customers’ business & development project priorities and current status, the more likely it is that you will be able to provide your expertise to customers in a timely manner.
For example, at Finitec, we maintain an ongoing dialogue with our customers to ensure that projects progress on schedule and provide the necessary expertise for every step along the way.
If you choose to work with Finitec, in order to acquire a project, it is up to you to create a CV, select an interesting project from the opportunities offered, and have a more detailed discussion about the project with the customer.
How long are the assignments?
The duration of assignments varies depending on the nature of the work and the project. For example, in software development or large-scale transformation projects, assignments are usually longer than 18 months. Contracts for these are typically made in 6–12 month periods.
Although the majority of our assignments are for large projects, sometimes our customers also need short-term consulting. This can include audits, specifications, or even design sprints.
I want to focus on the job, not the paperwork. How much time does it take as an entrepreneur?
In the start-up phase, it is advisable to set aside a few days for the actual registration of the company, the selection of an accountant, the acquisition of YEL insurance and the selection of banking and invoicing services.
If you operate as an independent expert, the activities related to the maintenance of the company focus mainly on the delivery of accounting data (receipts and invoices) to the accountant, as well as invoicing and payment of invoices. Typically, this takes about 1–2 hours on a monthly basis.
Naturally, it is not enough to simply run a business; it is also necessary to sell. You can either handle sales yourself or outsource it to Finitec. Read more about it here.
How do I price myself? What affects the price?
Pricing is primarily influenced by the prevailing market situation, i.e. the demand and supply of your expertise. In addition, the price also depends on, for example, the duration of the project, allocation and responsibilities.
Finitec has accumulated quite a lot of data on pricing. We offer our insights and support you in finding the right price point and communicating the value of your work.
How should you describe your competence?
You should first consider what your current strengths are and in what direction you would like to develop yourself and your competence. Listing your previous projects helps in defining these points. Reflect what made each project interesting or repulsive. Evaluation criteria may include, for example, technologies, the nature of problems to be solved, industry, methods, your role, the rest of the team.
Based on this, you will probably have some idea of your strengths and what you would like to do next. Now it’s a good idea to create a project CV from the project list you created. The CV doesn’t have to be massive: it’s enough to have a project-specific description of the following:
- Name of the project and customer (anonymised if necessary)
- Purpose of the project
- Your role
- Technologies and/or methods
- Project's duration, i.e. 02/2022 - 08/2022
Now it is easier to advertise your key competence and also identify the appropriate price range by mirroring the market. In areas that correspond to your skills, remuneration is naturally higher, and when taking on completely new expertise in projects, flexibility in the price is often needed.
Finitec’s service includes free support and a second opinion on your competence description, pricing and the creation of a CV to facilitate the acquisition of a project. You can talk directly with our Talent Agents about this.
What expenses are included in running a business?
Setting up a limited company costs EUR 275 and a business name EUR 60. Subsequently, ongoing expenses include insurance premiums, accounting fees, and equipment and subscription fees.
Setting up a limited company is cheaper when done electronically on the Business Information System’s website. When made online the fee is EUR 275 and filing the notification on paper is EUR 380. The start-up notification of a business name in the Trade Register costs EUR 60 online. Filing the notification on paper costs EUR 115.
The price of YEL insurance is on average 25% of your specified income per year. However, you can decice the ammount, with minimum price of approximately EUR 2,053 per year. However, if you become an entrepreneur for the first time, you will receive a 22% reduction in YEL contributions for the first four years.
For other insurances, you can budget approximately EUR 0–1,000 per year depending on your preferences. The writer, for example, pays a total of EUR 320 for accident, liability, legal and cyber insurance with default indemnity amounts.
Transitioning from paid employment to freelance without loss of income?
It is perfectly possible to switch from paid employment to freelance work without monthly income being interrupted. Steps for transitioning:
- The first thing you should do is to regularly follow our open positions page. When you find an assignment that fits your profile, contact the Talent Agent mentioned in the notification and explain your situation.
- We will assess the situation and if the details and schedules of the assignment prove suitable, we will introduce you to the customer and the process will proceed with interviews. At this point, you are not yet committed to anything, and you do not necessarily need to have a company or business name established.
- If the interview goes well and the customer wants to start cooperation with you, it is time to roll up your sleeves and start creating a limited company or business name. You can sign the contract after you have received your business ID.
- Take care of other tasks that are part of the beginning of entrepreneurship, such as submitting your resignation notice; taking out YEL insurance; opening a bank account for your company; making equipment and subscription purchases. If you are outsourcing accounting, now is a good time to get to know and choose an accounting firm.
- We will instruct you on practical matters related to the beginning of an assignment, such as the recording of hours.
- Relax and give yourself a pat on the back. Becoming an entrepreneur is a lot of work, but once you get past the start-up phase, you can enjoy the benefits of entrepreneurship for the rest of your career. Few people return from entrepreneurship to paid employment.
Just a few more important points to finish up:
- A new entrepreneur can apply for a start-up grant. If you wish to do so, it's a good idea to reserve a month between the signing of the contract and the start date of the assignment. This is to make sure there's enough time for processing the application. A favourable start-up grant decision must be obtained before you become an entrepreneur, so in this case before the start of your assignment.
- Be open about your plans to your current employer in good time. This way, burning bridges and unexpected turns can be avoided during the application process.
- The price of YEL insurance is the same regardless of the insurance company. However, there are differences in the content and prices of other insurances. Same applies for accounting firms.
- At Finitec, we’re here for you! We are happy to help with all questions related to entrepreneurship and freelancing!
How do I know there will be gigs in the future as well?
It is not in the interests of either party to run idle between projects, and it is the agency’s task to ensure the continuity of the work of the people it represents and the development of their careers. Therefore, we always strive to offer a new assignment before the previous one ends.
We will identify the end date of the assignment no later than one month before the end of the project. Once the end date is known, we will confirm with you what you want to do next and under what conditions. After that, we will proactively offer you further projects in accordance with your conditions.
What if I don't get a new assignment after the current one?
In principle, our experts do not have to sit idly by between assignments. When you are looking for a new gig in good time before the end of the current one, we are almost guaranteed to be able to offer new opportunities to continue from the current work. However, there is always the possibility of having to wait for a while between gigs. For this purpose, an entrepreneur should accumulate a so-called buffer fund, which, if necessary, can be used to pay wages or, for example, holiday pay.
In the event of the business drying up, the entrepreneur is protected by paying fair YEL insurance and joining an entrepreneurial fund. A member of an employee fund has the opportunity to receive uninterrupted unemployment benefit if they move to an entrepreneurial fund within three months of starting their business.
If the business ends, an entrepreneur is on the same line as other applicants when it comes to income support offered by Kela.
When should I quit my current job?
It is advisable to resign from the current job only after the contract has been signed. In general, the start date of the assignment can be arranged with the customer in such a way that it takes into account your notice period. Of course, if you are able to resign from your job before the assignment is confirmed, you can gain a competitive advantage over other applicants with a quick start.
Does the company form matter?
Yes, the company form influences the start-up activities and the life of the entrepreneur in many different ways. The company form has a major impact on the company’s taxation and the entrepreneur’s liability. For Tech freelancers, the reasonable alternatives are either a business name or a limited company.
A business name is easy to set up and manage as the accounting remains simple. However, the main disadvantage is that the risks in your business are also your personal risks. Therefore, in the worst case scenario, your personal property will also be subject to garnishment.
Establishing a limited company is slightly more complicated, it is more regulated and you probably want an accountant to help run it. However, this is usually worth the effort and the money, as it is a much safer option in terms of financial risks than a business name. A limited company offers also some tax benefits.
Isn’t the CV already dead? Why a project CV?
For example, a LinkedIn or GitHub profile is equally suitable for acquiring projects. However, we have found that a project CV is an excellent tool for clarifying your understanding of your competence, thus ensuring more relevant assignments with less effort.
Prerequisites for starting a business?
You can start a business in Finland regardless of your nationality. All you need is a right of residence in Finland.
Am I entitled to unemployment benefits as an entrepreneur?
You are only obliged to take out a self-employed person’s pension insurance YEL, which is offered at the same price regardless of the insurance company. The purpose of YEL is to secure your pension and it also has an impact on your social security. The price of the insurance is determined according to your YEL income.
The name and content of an entrepreneur’s voluntary insurances vary widely depending on the insurance company. Useful insurances for Tech freelancers can include accident insurance, liability insurance and legal expenses insurance, as well as cyber insurance.
- Accident insurance covers the insured person’s accidents at work and during leisure as well as occupational diseases.
- Legal expenses insurance covers the costs of using a lawyer in civil, criminal or application matters. The insurance may, for example, cover legal costs related to contractual disputes.
- (Cyber)liability insurance indemnifies, for example, the net property damage suffered by another person as a result of a data security breach in the policyholder’s own or an outsourced service provider’s data network.
- Cyber insurance will compensate you for any damages caused by data hacking, data theft and personal data breach.
Payment of salary as an entrepreneur?
As an entrepreneur, you pay your own salary. Paying salaries as a business name entrepreneur is a straightforward process, while the owner of a limited company has a little more to think about, but also some room for leeway. This is especially the case if you wish to pay the salary in the most tax-efficient way.
A good accounting firm will advise you on the best strategy, allowing you to focus on what is essential.
Paying salary as an entrepreneur has been made easy with palkkaus.fi service.
Fringe benefits?
An entrepreneur is entitled to fringe benefits and they are tax deductible. These benefits include, but are not limited to, lunch, mobile phone and car benefit.