Not too long ago, starting a freelance business felt like a gamble. Some viewed the choice as a distant second after landing a “real job.” I remember a client telling me she didn’t think she’d survive as a freelancer. She needed a steady paycheck and benefits. Otherwise, she didn’t know how she’d pay her bills. What a difference a few years can make!
In 2020, many newly remote workers realized something. The work they were doing from home for a single employer could just as easily be done for multiple clients. With a bit of research they discovered that as freelancers they could make more money while enjoying more free time and flexibility. According to Statista, the number of people doing freelance work in the U.S. increased from 53 million in 2014 to 58 million in 2020. If that doesn’t seem like a huge jump, keep in mind that at least 12% of the workforce in this country started taking freelance assignments during the pandemic. Even more encouraging, by 2027 more than half of the U.S. workforce will participate in the so-called “gig economy” if it continues to grow at its current rate. If you hope to join their ranks, how to start a freelance business.
Examine Your Economics
Nowadays, you may be better off beginning with a side hustle. This allows you to test the waters without risking everything. Still whether you make freelancing your sole means of support or not, you need to examine what your minimum financial needs are and how you will meet them. That means examining both your personal expenses and the costs of running your business.Your initial investment in your freelance endeavor can be low –– in fact I recommend that you don’t spend too much at first. Still, you need to have an idea of your bare bones expenses. You can also use online resources like the Boundless Freelance Target Income Calculator which will help you determine how much you need to make.
An important step in how to start a freelance business is determining who you are and what you will sell. Do some research into your field and see where the demand is. Look into growth and most importantly brainstorm ideas of the work you’d enjoy doing.
Your name is part of your brand ––– what does it represent? You need to view yourself as a company and like any business take a hard look at how you are viewed online. Google yourself. Start winnowing your social media profiles so they better reflect the successful professional you are and less the terror of Cabo. Besides improving your social, you can also create portfolios on professional platforms like Stack Overflow, Dribble, or Behance. All of this lets potential clients see the quality of your work. You can also use platforms like Twitter to answer questions and brand yourself as an industry expert.
Get a Website
You don’t have to do this from day one but the sooner you do the better. A professionally designed website with your own domain name can reassure new clients that you are the real deal. If you’re creating content avoid hosted sites like Medium or Blogspot so you can directly earn advertising revenue. On your site, post a blog or two about your specialty. This will help you land higher on search results. You can also offer a freebie like an e-book or guide when a potential client puts in their contact information. This type of sales funnel creates vital leads that will help build your business.
Will you charge per project or by the hour? Both have advantages. If your work involves a fair amount of admin, an hourly rate may be appropriate. However, if the time you spend is predictable you may want to charge per project. The advantage to this method is that as you become more skilled you’ll need less time to finish a job –– which means you basically get a raise without asking for one. Plus, top talent that charges per project often earns the equivalent of more than $100 per hour but it’s much harder to ask for that up front. For this, the Freelance Hourly Rate Calculator can be a big help here.
This is of course the most important part of your task. How do you get clients? Well sites like UpWork and Craigslist are a good resource. Just make sure to fully vet potential clients and don’t do too much work without getting paid. Still, the best way to get clients is through your personal and professional network. Keep in mind that this is how the majority of freelancers get their best-paying and longest-lasting assignments. So as you begin the development process, get in touch with people you’ve worked for and friends who know how talented you are. You may need to do some work for little to no money to build your portfolio. Don’t make this a habit. Let everyone you do this for know that you’ll be promoting the project on your socials and website. Networking is hard for some people but getting your name out there and meeting people who will hire you is extremely necessary.
All Important Accounting
In many ways the U.S. taxation system favors wage earners. Independent contractors have more challenging reporting requirements. Some states like California are even making it harder to be an independent contractor. So, your first task as a freelancer is to make sure you have multiple clients, set your own schedule, and pay for your own equipment. Realize that as a self-employed person you will be covering both the employee and the employer portion of the Medicaid and Social Security tax and filing quarterly tax returns. Of course it also means being able to deduct everything from your home office expense to your equipment and even a vehicle.. As your business grows, you may want to move beyond being a sole proprietor and look at forming another tax entity.
Setting up and running a successful freelance business can be a lot of work. However, most who do report far more satisfaction and less stress than they experienced as employees.
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