How do you cope when work is suddenly cancelled due to an outbreak like the Coronavirus?
While the employed world is quickly trying to adopt remote working principles, the COVID-19 outbreak is already having an impact on freelancers.
Aside from health concerns, the financial impact of last-minute work cancellations can be severe. Though many freelancers will have an emergency fund of some sort, this may not be sufficient to cover an extended period.
Given the extenuating circumstances, it makes sense for the [UK] government to factor the 5.5 million self-employed into their contingency planning. For anyone interested, there’s a petition to this effect.
IPSE are campaigning for the government to create an ‘Emergency Fund’ to support the self-employed.
Despite this, it’s impossible to know if this will happen, what the support will look like and – crucially – how long any support would take to hit the bank accounts of those who have been worst affected.
If your work is under threat or has already been canceled, what can you do? It’s impossible to give advice for all situations and there will be scenarios where a loss of income is unavoidable, but here are some initial suggestions.
Use tech to work remotely #
If your work involves delivering workshops, events or you work on-site, look at software options for delivering this remotely.
Conferences organisers are faced with difficult decisions, but one option is for these to run remotely. Some web conferences already run in this manner, so it may be worth taking inspiration from tried-and-tested formats.
If you work on-site, your client’s IT department may be able to provide you with a remote set-up or even provide a laptop with the right software.
Whatever the situation, test the software before you need it to make sure you’re up-and-running with as little downtime as possible.
Talk to your clients #
Many companies and clients are busy responding to the prospect of widespread remote work for the first time, and at short notice. They’re bound to be open to ideas, so talk to them about how you can continue to fulfill your contract.
It’s a good opportunity to demonstrate leadership or previous experience of working remotely.
Seek community #
There are plenty of freelance communities to explore, such as Doing It For The Kids and Leapers. If you’re unsure of how you can continue to work – for whatever reason – these groups can offer invaluable support and advice.
Professional indemnity insurance #
If you happen to fall ill, and that causes you to miss a crucial client deadline, you could be in a tricky situation.
For instance, a web designer might miss the launch of a website because they fell ill. In that situation, the client may have scheduled:
- Social media campaigns
- Print advertising
And a whole host of other things to coincide with their launch. They may make a claim against the designer not just for the cost of the work, but also their other expenses and missed sales.
When you factor in legal expenses, this can all add up to quite a lot more than the project’s initial value.
You would hope your clients would be understanding of the situation, but professional indemnity insurance is there for exactly this type of situation. If you don’t have insurance in place, now would be a good time to look into it.
Note that professional indemnity insurance will not cover lost income due to sickness or cancelled work. It’s there to help if a client threatened or made a claim for damages against you.
P.S. For freelance-friendly insurance, check out With Jack, who have kindly sponsored this section of the guide. If you have questions about your situation, they’ve kindly offered to speak to the insurer on your behalf, so please get in touch.
If there are no workarounds #
If there are no possibilities to work remotely and you have income protection or business continuity/interruption insurance, you may want to speak to your insurer to find out if you’re covered. COVID-19 is now listed as a notifiable disease, meaning there’s an increased likelihood that insurance may cover you.
For those who might be waiting on invoices to be settled, another option is to look at selling invoices. This is where a company ‘buys’ your invoice – paying you the total you’re owed, minus a fee – and chases the debt on your behalf.
For other financial advice and cutting back on spending, websites such as MoneySavingExpert could be invaluable, particularly if you’re looking for advice around managing credit, outstanding debts and overdraft facilities.
Planning for the future #
Whatever the circumstances, this situation is forcing employers and freelancers alike to look at vulnerabilities in their businesses. Though it’s of no help for immediate cash flow issues, future contingency planning might involve:
- Adding new services to your business
- Diversifying your income
- Not relying on a single client for most of your income
- Packaging up services in a way that can be delivered remotely
This will not be possible for all freelancers, but thinking about these things might lead to ideas that help to make your business more resilient.
Phase Three Goods have put together a guide with suggestions for services that could be offered and how to set up an online store.
Setting up an emergency fund #
If you haven’t already, another thing to consider is an emergency fund. Recommendations for how much to save range anywhere from two months to a year of savings.
Whatever the amount, it can sound daunting – but the point is to start saving something. Having one, two, three or four weeks of emergency fund is better than none at all, even if it won’t sustain you for a longer interruption.
I inadvertently started saving for a pension and emergency fund by oversaving for tax. Start with a weekly figure you won’t notice (even if it’s as little as £5–15/week) and gradually increase when you’re able to: you can always dip into it if you need to.
Lots of modern banking apps allow you to set-up pots/funds that save a regular amount. If this isn’t available with your bank, you can set-up a separate account for your emergency fund.
Supporting freelancers #
If you’re able to, considering buying from and/or hiring freelancers wherever you can. Given the unpredictable nature of the Coronavirus situation, every purchase and hire helps to mitigate the financial impact that many freelancers are facing.
Our friends at Leapers have put together some great guidance around COVID-19.Check it out