6 Things to Consider before going Freelance

Working as a freelancer in the oil and gas industry can be exciting and lucrative. However, it is not without its challenges. If you’re looking to leave full-time employment behind, you first need to consider a few things:

1. Weigh up the Pros and Cons

The allure of freelancing is not overstated. You’ll have more control over where you want to work, how long you’ll be away from home and the kind of project you’ll be signing on.

Profitable rates are arguably the top reason why offshore workers venture into freelancing. For instance, some experienced freelance hydrographic surveyors can command as much as £500 a day, while other senior disciplines can charge in excess of £1,000 per day (depending on qualifications and experience).

However, this career track does have its downsides, with the foremost being the potential loss of job security enjoyed by those in permanent employment. Once your time on a project is up, you’ll be sent home and, under normal circumstances, you won’t earn again until your next freelance project is secured. Once transitioning away from a staff position to that of a freelancer, you’ll also no longer have access to employee benefits (overtime pay, sick pay, etc.).

As a freelancer, you’re essentially running your own business, so you need to have the right attitude to keep it going, especially when faced by challenges (e.g. generating leads, negotiations, etc).

If you want to get a more in depth understanding of what to expect as an offshore contractor, head over to our guide on the pros and cons of this career path.

2. Have Enough Savings

Work for contractors can be precarious, especially when you’re starting out. Some clients also take a long time to settle invoices. It’s generally advisable to have enough savings before you leave your full-time job’s stability.

Start with calculating how much you need each month, including your rent/mortgage, food and all your bills. Once you have this figure, make it a point to have six months’ worth of expenses to act as your financial buffer once you transition to freelancing. Remember: even experienced offshore workers may take a few months to land their first freelance project.

3. Understand The Legalities

Offshore contractors can either register as a sole trader or start a limited company. Another option is working with an umbrella company, which is a third-party supplier that run the employment of contractors and serve as intermediary between end-client and freelancers. One of their main roles is to help out with organising payment, collecting your earnings from the end-client, then paying you after expenses, tax and national insurance are all deducted.

You also need to be aware of the changes to IR35 legislation, which will take effect in April 2020 for clients/employers in the private sector. This new rule will apply to freelancers who are “disguised employees” (e.g. working for one client instead of multiple clients) and maybe taxed as such.

If possible, work with an accountant, so you’ll know that your transition done in the best possible way. For the financial aspects of being an offshore contractor, check out our guide on bookkeeping for freelancers, including legal requirements, taxes and best practices.

4. Time It Right

Carefully time your transition to freelancing, as you wouldn’t want to leave your full-time job at a time when demand for offshore work is low. Consider the following:

• The weather on offshore areas — The weather can often dictate when work on a rig, vessel, etc can be done or not. For instance, November and December are traditionally quieter times in the northern hemisphere for offshore work, due to weather conditions (e.g. rough seas, cold, storms, etc). It will be challenging to find work in the Northern Regions this time of the year.
   
• Supply and demand — If a client is looking for a contractor with decades of experience, their choices may be limited. Those who do qualify can then command much higher rates. Alternatively, if there’s an abundance of contractors with decades of experience, then rates will go down. Figure out the supply and demand in your field, so you’ll know how to position yourself and at what rate.
   
• Market news — Back in 2014-2015, offshore work declined due to falling oil prices. Contractors lost their projects, with the wind energy industry benefiting from the skills exodus from the oil and gas sector. This resulted in skilled oil and gas personnel who commanded higher rates join projects with lower rates. Stay updated with market news, so you’ll know how the industry is faring. The good news, however, is that offshore work is projected to grow until 2025.

5. Check Your Skill Set

Freelancing is not for beginners, as plenty of clients prefer someone who can hit the ground running with minimal supervision. It’s therefore, vital that you have the necessary experience that clients will find attractive.

Contractor skills, in general, fall under these four types:

• High-end contractors — Those who constantly update their knowledge, making them extremely attractive to clients in fields where the latest skills are needed
• Category contractor — Those who niche down and focus on honing the skill that they do best
• Standard contractor — Those who cover for permanent employees or fill short-term roles
• Low-end contractor — Those who don’t update their skills and take on any tasks that permanent employees don’t want to do (note that you may be at risk of IR35 if you fall under this category)

Check your skill level, know where your strengths lie and be honest with where you currently stand, so you’ll know if you stand a realistic chance of excelling in the freelance world.

6. Know How to Secure Work

Building a pipeline of work is arguably the biggest challenge of freelancers. During the lean months, you need to keep hustling to make sure you’ll have enough work to cover your expenses for the rest of the year. Start with the following:

• Where you want to work — There are plenty of locations around the world with offshore opportunities. As a freelancer, you can now pick where you want to work and find opportunities available in those countries.
   
• Prepare your CV — With average CV skimming time of just 7.4 seconds, you really need to catch a client’s attention quickly. Tailor your CV to fit the job, include relevant skills/experience/certifications and provide details on your work accomplishments. Also include equipment, software, technology and/or vehicles that you can operate. Lastly, make sure you format it so that it’s easy on the eyes.
   
• Go online — Check out LinkedIn, classified/job websites and specialist recruitment agency websites for available projects that suit your niche. You can also go directly to sites of established companies for vacancies. Here, at UTM, we have pages upon pages of available offshore work for freelancers that you can go check out.
   
• Network — Who you know is vital to your business. Keep on building your network and get in touch with past contacts. They might recommend you to clients looking for contractors with your services.
   
• Work with an umbrella company or recruitment agency — Working with these two companies can take a lot of burden off your shoulders, as it’s much more convenient. Umbrella companies, for instance, will take all the administrative and accounting tasks off your plate. Make sure, however, that these are genuine companies by asking your peers or reading forums about their reputation, checking their payment processing system (e.g. contracts, how quickly will you get your money), and if they are upfront with how much they will take from your pay.
   
• Explore marketing channels — It pays to know how to get your name out there. Know which marketing channels work for your niche, whether that includes digital advertising, print advertising, attending conferences or search engine optimisation for your website.

Taking The Plunge

Starting and maintaining your own business as a freelancer is tough. You need to have the right motivation, attitude and know-how to stay profitable. However, once you get the foundations in place, it will become far easier to get the ball rolling and find lucrative projects and contracts that will open doors and advance your career.