Meet FreeAgent, the British company giving financial power back to freelancers and small businesses
The life of a freelancer is a hard one. Finding work is only half of your troubles – and usually the simplest part. The real struggle is the never-ending slog of managing your accounts and the annual scramble to file your tax returns in time. Rather than just basking in the glory of being your own boss, freelance work also means you have to manage that ever-growing mountain of paper.
When Ed Molyneux, FreeAgent’s CEO and co-founder, went freelance 13 years ago, he just knew there had to be a better way. Now the FreeAgent accountancy software is helping freelancers and small businesses deal with day-to-day admin.
I caught up with Molyneux to find out just how he and his co-founders Olly Headey and Roan Lavery managed to take the pain out of the arduous accounting that comes along with freelance work.
1. Where did your big idea come from?
Ed Molyneux – co-founder and CEO
I left the RAF in 2003, where I had served as a pilot, and moved into IT consultancy work. While freelancing, I met fellow freelancers Olly Headey and Roan Lavery and we all agreed that, although we enjoyed working for ourselves, the experience of sorting out our accounts was incredibly stressful.
At the time, the only accounting software available for freelancers was big, complex desktop packages designed for larger companies, containing a plethora of confusing features that a solo business would never need. The alternative was wrestling with a complicated spreadsheet in addition to paying a lot of money to an accountant to do your books.
All three of us were frustrated with the fact that there was no accounting system available, designed specifically with freelancers in mind – and that was the spark we needed to build FreeAgent.
2. What is the problem that FreeAgent aims to solve?
FreeAgent is designed to take the pain out of accounting, helping freelancers and micro-business owners take care of their day-to-day business admin. That means managing expenses, running a fully RTI-compliant payroll and tracking all of your time, through to creating and sending professional-looking estimates and invoices to your clients. We also help micro-business owners keep track of their cashflow, see how much tax they owe and when it’s due, and file VAT, RTI and Self Assessment returns directly to HMRC.
Our mission is to make people feel in control of their day-to-day business accounts, relax about tax and work more effectively with their accountants.
3. What’s the biggest challenge you’ve managed to overcome so far?
The early days, I think. We’ve always known our target audience, understood the problems they faced and tried to develop a solution to those problems, but actually developing the system and getting it live on time was very nail-biting.
We were working hard on creating a useful product we thought people would like – but there was no certainty that enough of them would want to pay for it to make the business sustainable. It meant the credit cards took a bit of a battering as we drove forward and hoped that FreeAgent would be as successful as we thought it could be.
4. Where do you see yourselves being in five years’ time?
With the UK government’s plans to digitise tax expected to come into effect by 2020, there is likely to be a dramatic uptake in the number of freelance and micro-businesses using cloud software to manage their accounts. We plan to be at the forefront of this movement, providing as many people as possible with the best method of managing their day-to-day business finances.
Relative to the ambition we have for the product and the company, we’re only just getting started! There are still so many aspects of managing a business on your own, not just dealing with the finances, that are far more daunting than they should be. We won’t be finished until we’ve solved as many of those as software is capable of solving.
5. What’s the one thing you wish you had known before starting FreeAgent?
How much of a challenge it is to grow a business while maintaining your company culture!
In the very early years, we had a handful of staff all working out of one room in Edinburgh, whereas now we have more than 100 employees – including some who work remotely across the UK and overseas. It would have been easy to let the business become a more corporate-feeling entity as we grew our team and our influence, so we’ve had to work incredibly hard to keep the same startup philosophy that we originally built FreeAgent with.
Aside from that, I don’t think there’s much more I would like to have known. In many ways, the success we currently have has been built from our mistakes just as much as our correct decisions – so I don’t know whether FreeAgent would be the same company if I’d known in advance how to deal with some of the challenges that we’ve faced.