Freelance is a trade off: autonomy, satisfaction, variety and freedom in return for an equally compelling list of downsides. Immense insecurity and little opportunity to switch off from work are just two of the problems faced by freelance workers in all walks of industry.

Famines and feasts

Money worries. Financial risk and instability are part and parcel of working for yourself. But choosing to freelance is a calculated decision so you will have worked out that your contract rates of pay will normally make up for periods when business is slow.

But what if you're busy working and simply not getting paid? This is a problem that you should learn to prevent rather than solve. When you first begin or agree to a new contract, ask straight up about the company's pay procedures. Who signs off contracts? Should you complete timesheets? What expenses, if any, are reimbursed? When will you receive your cheque? If you're still sceptical about getting paid, it's worth asking for half of your fee up front. You'll be surprised how many clients are willing to oblige.

Chasing up payment for a project you've already done is frustrating. You can't turn to the person who brought you in on the project. It won't be their job to worry about finances and you don't want to appear such a pest that they won't relish the hassle of hiring you again.

Instead, you must make direct contact with the company's accounts payable team. Talk to them early and often. Long before you'd expect to see your cheque in the post, call them up to find out their standard payment terms for contractors. If it's 60 or 90 days, you might be able to change this to 30 or 45 days by simply having spoken to the right person at the end of the phone. Don't wait for a problem to arise. And if you do have a problem, don't be shy about saying so. Accounts people are used to being pursued by suppliers and contractors. You've fulfilled your service to their company and you're entitled to their attention. So do what you can to get it.

Highs and lows

An infuriating client . The work is fine. It's the person you work for that's driving you crazy. This is a personality clash like orange and pink.

Remember who's boss and learn to say no. Part of your decision to go freelance will have included less stress and the choice to work with who you like. But how do you spot a potentially troublesome client before a project's begun? Some of the telltale signs are a client who negotiates overly hard on your fee, demands an extensive written proposal or asks you to do a lot of preliminary work for no charge. If you sense any niggling doubt, go with it. If you're already committed to the contract from hell, finish the job, do it well, and then fire your client.

Ups and downs

No time to market yourself. When you're busy juggling jobs for and meetings with a number of clients, there's often no time to do that essential freelance task of marketing yourself to potential new ones.

If this is your problem, it needn't be. You're probably thinking about marketing as if you still worked for a large corporation. Break out of the old mindset. Promoting yourself as a freelancer is not about responding to newspaper ads or dropping flyers through people's doors. But it's about almost everything else, including the quality of your work, the reliability you demonstrate, the look of your website, the articles you write, the networks you join, the conferences you attend and the conversations you have with the people sitting next to you.

Peaks and troughs

All work and no play. Even if you do find time to update your website or revamp your business cards, freelance life can make Jack a very dull boy. If you are your own business then there's a natural reluctance to close the business for even one second of the day for fear of missing an opportunity. Time to fix some boundaries. Set a daily quitting time, designate an hour for the gym and arrange a date to play squash. Schedule days off, and not necessarily at the weekends. You dictate your own timetable so treat yourself to a weekday away from your computer. The shops will be less crowded and you can enjoy a stroll in a relatively empty park. And the joy of being off work in the middle of the week, while everyone else is at their desks, will give you an added sense of appreciation and empowerment.

Swings and roundabouts

Feeling lonely. Having longed to escape all those corporate annoyances like time wasting meetings, political promotions, back stabbing gossip and obligatory socials, there are moments when every freelancer feels out on a limb. And if you do most of your work from home, you can go quite stir crazy.

Even the most hardened of loners crave personal interaction. But as a freelance worker, other people won't come to you – you have to go to them. So call an old colleague. Call a new one too. Then call a friend who has nothing whatever to do with your work. Read magazines outside of your field. Surf websites on new topics of interest. Check out the latest film releases.

In short, stimulate yourself by whatever means are needed to keep your intellectual curiosity on its toes, while achieving a healthy balance between your professional life and the personal and social lives that keep you sane. It's important to love what you do, but remember to work to live and not live to work.

Ever deprived yourself of a holiday because business has seen a quiet year and you don't feel entitled to sitting back and relaxing? Or your bank balance is suffering from its latest Inland Revenue payment and you can't justify the extravagance? Or else you're expecting some big, juicy project to come your way any day now? Or you're convinced that a new client referral is just around the corner and you'd hate to be away when the phone rings…?

Never mind tax dodging

. Holiday evasion is one of the greatest crimes committed by contractors today (and one of the biggest ironies of all that freelance freedom). If it's something of which you're guilty, think again. You need time off as much as, if not more than, your permanent, full-time counterparts. Time to switch off, rest and recharge your batteries ready for the next stint of work and, often more exhausting, chasing work. So make sure you have your guilt-free day in the sun.

Do your sums

. Making sure you can afford to take a break is step one toward feeling better about it, and you don't need your accountant to do the maths for you. Simply subtract from 52 weeks the amount of holiday you want to take this year and divide your remaining number of income-generating weeks by the gross annual figure you want to earn. Remember to include holiday expenses and final tax deductions in your calculations.

Make yourself a promise

. You don't have a mandatory 25 days' paid annual leave that head of HR will remind you to take by January lest it go to waste. The only way your break is going to happen is if you make it happen. So book the time in your diary, book your friends or family, get them to book the time in their diaries and stick to the plan.

Remember who's boss

. Many clients assume that freelancers are available at the click of their fingers, bank holidays and all. It's up to you to change this attitude. The next time you negotiate a contract, let the client know when you'll be taking time off and, if need be, arrange for an associate or subcontractor to cover for you in your absence. You're self-employed, remember.

Book your seat

. Lots of freelancers get this far in planning a holiday and then bail out. Something always comes up work wise, whether it's a definite job, a project in the pipeline or simply a meeting that they feel they shouldn't miss. But something always will come up if you let it. There is never a convenient time to just vanish. So, having made the commitment in your mind, put your money where your mouth is. Take out the credit cards, lay down the deposits and book the actual holiday - the hotel, the flights, the car, whatever. Now there's no backing out.

Countdown to H-day

. You've finally given yourself a real deadline to get things done. And that includes your work. But don't panic. Draw up a timetable between now and your trip, remembering not to try to fit a month's work into the very last week. Apart from packing beachwear, your final week should spare time for attending to any last minute cries from clients.

Cut off comms

. You didn't think you'd be allowed to slip your mobile phone or laptop into your luggage, did you? If you're on call, you're not on holiday. Let your clients know that you'll be entirely offline and out of contact for the duration, and make arrangements for colleagues to handle emergencies. Give yourself a break. No one else will. And, besides, you deserve it.

Tempting fate and fortune

Venture capitalists, or VCs, receive thousands of business plans a month, so they only have time and inclination to consider the most convincing proposals. Make sure yours gets to the top of the pile.

Get to the point

Keep things short. A business plan should be no longer than 20 pages. And grab attention straight away. VCs will pretty much scan the plans on their desk, so cut to the chase quickly, giving all the main facts right at the start.

Your executive summary should tell six chief points in as little space as possible: your venture plan, your proposed market's size and growth, your strategy to resist competition, your team, your unique selling points and – the reason you're here – your required funding.

You've got to convince VCs that you are the right people in the right market at the right time. The rest of your business plan will then back up these assertions.

A sense of direction

Whatever you do, don't ask for a preliminary meeting to chat about ideas. VCs expect you to have a firm picture of where you are taking your company and what you need. Make sure you have done every last piece of your homework.

A decent business proposal

To begin the main body of your plan, give a clear outline of what your company intends to do: the short, medium and long term direction. Long term plans should be ambitious. Venture capitalists like to see large potential markets. So consider expansion, be it into other countries or into other products and services. And show commitment to the company. Leaving your job and putting your own money into the project are significant gestures. VCs like to see 100 per cent dedication and they can spot business planners who are merely out to make a quick buck.

Keep the money rolling in

Explain exactly how the company intends to generate revenue. It may sound obvious, but ensure that your model is not based on weak streams such as banner ads on your site. And don't rely on just one avenue. Consider as many different revenue-generating models as possible. If you have any guaranteed revenue streams already in place, then mention them. Keep this section basic. Forecasts and assumptions can wait until your financial projections.

Suss out the competition

Examine both existing and potential competition, bearing in mind real barriers to market entry. Show detailed research and statistics to indicate expected levels of demand. And explain your route to market including a marketing strategy. If VCs decide to invest in your project, they will do their own research of the competition, so give a full and candid disclosure from the outset.

Pick your teammates

Include brief CVs for your proposed management personnel. Also state which further team members are needed, although saying this, your main board positions should all be filled. VCs will not be impressed if you have to go shopping for crucial executives. They may decide to put one of their own nominated directors on the board but they won't want to half fill it for you. Also, if you're an essentially young team, try to get some older contingent on the board as non-executive directors, one or two people with wide business and IPO experience.

Make connections

Where possible, link up with other companies that can add value to your business. Large blue chip companies will look good in your plan, although alliances can range from mutual click-throughs on another company's website to free advertising in exchange for equity.

Know your worth

If similar companies have recently floated or been bought out by trade buyers, include figures to show the potential valuation of your business.

It's okay to gamble

Be frank with VCs from the start. Pinpoint all possible risks, pitfalls and weaknesses. As long as you demonstrate ways to combat or minimise them, you will be given credit for your realism and determination. All ventures have risks and VCs are in the business of taking them. They will not only appreciate your honesty but, if you say that there are no risks, they'll think you're being naive.

Show your workings out

Present a financial forecast as a projected profit and loss and cash flow account. Give anything between a three and five-year period that's sufficient to show a profit, with justification for each assumption made in notes to the accounts. Use evidence, such as independent market research, where possible. If no profit is forecast for longer than five years, you are unlikely to receive finance.

Time it right

Be realistic with timing. Don't ask VCs to sign a cheque at your first meeting. Although interested VCs move quickly, the legals will take at least a month. And if you do get an offer of investment, don't spend too much time wrangling over the equity. By all means be greedy but don't waste time. Some companies can increase in value 30 per cent month on month so it is not worth standing still for the sake of 1 or 2 %.

Tailor the talk

Contractors are good at interviews. They interview more often than their permanent, full-time counterparts and they learn to market and sell themselves very effectively. If you're interviewing contractors or freelancers for a project, you need to be equally savvy. In particular, you should tailor certain questions for the contract nature of work and, indeed, the contract personality.

Saying this, there are lots of questions that will be the same whether you're interviewing freelancers or candidates hoping to fill permanent roles. The key with freelancers is to adopt a combination of both conventional and contractor-specific interview techniques.

Have a plan

As with any interview, you must plan well. Have your questions formally prepared and word them to be open ended so that candidates are forced to elaborate without being coached. You have a short amount of time to get to know a complete stranger who could be critical to a very big project, so you want to hear what they have to say – and lots of it. Let them speak for the vast majority of the interview. You, meanwhile, should be poised for some serious note taking.

Project history

Think project experience rather than work experience. The companies for which contractors have worked are relevant, but the specific project experience they bring to the table is more important.

What form did their previous briefs take and what were the timeframes?

Freelancers, by nature, should be adaptable workers, but it doesn't hurt to make sure. Can they work to incomplete creative briefs or do they need more direction? Can they pick things up quickly and work to tight deadlines? Or do they need time to absorb information and settle in?

What did they enjoy about particular projects?

Get to know their tastes. Their likes and dislikes may reveal their suitability and potential enthusiasm (or apathy) for your project.

What was their specific role on each project?

How many people did they supervise? Can they explain the position they filled and its context within the project as a whole? Are they team players and do they play their parts responsibly? Or are they loners best left to their own devices?

How did each project impact the company for which they were working?

A huge giveaway if this renders them speechless. And a significant insight into candidates' interest in, motivation for and appreciation of the impact that a project has on a company. Do these consultants actually care about the overall effect of their work? Or do they just show up each day without thinking about the bigger picture?

What did they do when there was a hitch on a project?

How do these candidates respond to problems? Do they rise to a challenge or are they easily defeated? Perhaps they are bluffers who sweep discrepancies under the carpet in the hope that no one will notice before they are gone. After all, they could be walking away from the job with no repercussions to face but a nice fat cheque.

Personal training

The best consultants never stop learning. Experienced contractors should be used to arranging and financing their own professional development, skills training and work experience, as these lead to better projects and higher fees.

What training have these candidates undertaken?

Are they truly committed to increasing their skills and knowledge? If applicable, ask for certificates to verify claims to training courses.

Do they belong to any professional associations?

A way of separating the professionals from the newcomers to contracting is to determine how effectively they network in their industries. Experienced CreateWork members usually take advantage of the benefits, leads and resources offered by many professional associations.

Money matters

Arguably the most unpleasant part of any interview is the issue of money. Contractors' pay schedules are unique. Non-payroll employees have different expectations altogether, so you should establish what these are so that you are both clear.

What are their rates and how do they invoice? Do they charge on an hourly, daily or per project basis? Are you billed weekly, biweekly or monthly?

Contractors' rates and billing terms may or may not be negotiable, so remember to cover this important ground.

References

Candidates' project experience is critical to your decision so, if you're serious, start checking their references. If contractors have worked on a number of briefs for the same company, ask for the names of a few project managers.

While managers offer an important perspective, coworkers can provide equally valuable insights into candidates' work ethics and skills. Try to track down some of these insights.

At the end of the day, hiring contractors is often a case of trial and error. But, with a thoughtfully planned and thorough interview, you can at least minimise the trials and, more importantly, the errors on short term projects that you can't afford to get wrong.