Freelancing in Germany

by Expath Global Mobility

Nick Oestreich is the Head of Business Development at Uplink and is sharing with us some useful tips and tricks for freelancers in Germany.

Uplink is an exclusive network of 4,000+ IT freelancers from the DACH region that offers fair and transparent job postings and a vibrant online community, connecting companies with experienced IT professionals.

We’ve talked to Nick about what it means to be a freelancer in Germany and how Uplink makes your life easier, especially when you’re just about to start out as a freelancer.

Please note: This article captures only parts of the original interview, which you can watch here.

Top Tips for Beginners

  • Have a financial backup.
    For those at the beginning of your freelance career, especially if you’re considering doing this full-time, it is important to have solid savings — so something around €10,000 is recommended, especially in the first two to three months when you’re still finding out how to talk to the clients, what are your real strengths and how you can win them over.

  • Plan ahead.
    80% of the freelancers get their first project before going into freelancing full-time. Either they were partially freelancing on the side of their main job or they were looking for the first projects before canceling their ongoing work contract — the idea is to start slowly and test the waters before committing fully to making a living entirely out of your freelance projects.

  • Know your worth.
    Those just starting their freelance career should be aware of their hourly rate and not fall into the trap of selling themselves below the market — that’s common at the beginning as you don’t know exactly how to calculate your hourly rate. As a hint, offering an hourly rate of €40-50 is, in most cases, not enough since you won’t get all that money straight into your pocket. As a freelancer, you also spend a lot of time on things that you can’t bill a client for, but you’re still bringing value to your business during that time: setting up all the structures, taking care of the administrative stuff, creating invoices, priming prospects, doing application calls with potential clients. Besides that, you’ll also want to take holidays, you might be sick or you might have time to overcome where you don’t have an actual project and all that time isn’t paid. So you should consider what are the average hourly rates in your industry, and based on that, and after adding all of your extra expenses, determine the correct rate that you should be charging.

  • Think long-term.
    When starting out as a freelancer, don’t forget that you’ll need to pay all of your taxes and insurances yourself — health insurance, liability insurance and any other insurance you might have, income tax, as well as save for your retirement (no matter what investment strategy you choose). You won’t be paying anymore into the public funds so you should consider what plans you want to follow early on in this journey.

  • Build your workflows.
    When it comes to the technical setup, freelancers should think about all of the tools they might need from the beginning and plan their daily workflow ahead. This means considering not only the tools you need to do your job but also how you’ll be doing the billing, how you’ll issue invoices, etc. For example, opening up a business bank account will help keep your business payments separate from the private ones and will save you a lot of extra trouble when you do your yearly tax statements. Luckily, nowadays there are plenty of online platforms that help you manage your freelance business so it won’t be hard to have everything under control from the very beginning.

How to Find Your First Projects

There are several ways in which you can find a project when you’re just at the beginning of your freelance career. Here are the most tried and tested ones we know of:

  1. Through your own network.
    Ask people around you, or maybe other freelancers who already work for clients/companies you’d like to work for. This is a great way to start, as it gives you an extra guarantee that it will be a nice project environment since you already know someone who can recommend or works with that client.

  2. Working with managed service providers.
    These are big recruiting companies like Hays or Robert Half, for example. The benefits are that they often have frame contracts with their clients, meaning that they have large corporate clients with long-term projects. And, especially at the beginning, you might not want to jump between many, short-term projects but rather focus on something long-term for a year or more, that gives you experience that you can add to your portfolio.

  3. Using social media.
    We strongly recommend connecting with all of your former colleagues, managers, mentors, etc. via LinkedIn as here you can readily see when someone has a gap to fill and you can often talk directly to the hiring manager or their HR. This is also where companies usually find the best freelancers, as they too prefer to hire via their own network.

  4. Signing up on freelancer platforms.
    There is a variety of platforms out there such as, freelancermap, upwork, and they all have slightly different focuses. Their advantage is that you can easily filter projects according to your interests, industry, skills, and, sometimes, your hourly rate. The disadvantage is that on these platforms, companies can post a project without a set hourly rate or defined timeline and these details only come out during the interview process, which means you might invest your time in tendering more clients than needed before getting a well-paid project with a realistic timeframe. To compensate for that though, is the benefit of working directly with the client, which means eliminating the middleman (i.e. the recruiter) which would impact your potential earnings by 20% to 30%.

How Uplink Is Different

Uplink is a mix between a platform and a managed service provider, in that companies can tender their projects after an initial discussion with the Uplink team. So all the projects posted here are covered by a preliminary requirements analysis and have a set budget. This means that a freelancer knows exactly if a given project covers their expected hourly rate.

Uplink is also very transparent regarding their service fees — they are charging freelancers only 10% of their hourly rate for up to one year. This is important to note, as the goal here is to connect freelancers with companies and create value at the beginning of the relationship, unlike with the traditional service providers where freelancers working on a long-term project are still paying fees to the recruiter many years after they started working with a client.

Lastly, Uplink prides itself on being a true community of freelancers, both online, where all the questions about work and daily life are answered by freelancers themselves in dedicated thematic channels, and in-person where freelancers meet one another and new partners at on-site meetups and events organized by Uplink.

Next Article

Want to Join The Network?