7 Steps on How to Start a Freelance Business
Here is a little secret: at some point, every entrepreneur gets cold feet before they learn how to start a freelancing business. Starting any freelancing business is all about taking a leap into the unknown. All freelancers know that the same characteristics that make freelancing attractive can also make the idea a bit daunting.
However, if you are interested on how to start a freelance business, you are drawn to being your own boss, spending time pursuing your passions, and working hard for no one but yourself. When freelance entrepreneurs are ready to work hard, there is a strong chance they will succeed. There is nothing more rewarding than putting the hours in and then watching your own unique freelance business take off. The flexibility a freelance business of any kind offers to individuals is unparalleled, but it can be challenging to get started. Here, we provide a quick rundown of the critical steps, goals, and processes of which freelancers should be acutely aware. We hope this list will help busy new freelancers stay organized, motivated, and focused on their goals.
Douglas Wade, Attorney
1) Set Your Goals and Understand Your Motivation
Freelancing is a journey, and when setting out on any type of journey, it is essential to define one’s objectives. Now, everyone comes to freelancing from a different background, and therefore every entrepreneur will have slightly different goals for this part of their life and career. Asking oneself essential questions is a great way to set goals and be honest about the challenges that running a freelance company can present. You might ask yourself:
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What is my reason for becoming a freelancer?
Some workers want more freedom; others have always wanted to start their own business and know that this is one step in the process. It is essential to be honest about your expectations. Does the idea of setting your own hours appeal to you, or is this more about having more time to spend with loved ones? Does the idea of being one’s own boss excite you because you can focus on a specific niche?
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What do I wish to get out of this career change?
Some entrepreneurs see starting a freelance business as a small side-hustle, while others want to build it into a full-time gig as quickly as they can. Still, others want to start small but are open to becoming full-time freelancers down the road. Again, be honest with yourself about your goals.
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How much time and effort can I give to this new business?
Starting any type of new venture is usually more time-consuming than we think it will be, and freelancing is no exception. However, the beauty of a freelancing business is that usually, individuals can accept as much work as they would like. In addition, having the ability to pass on specific work with limited or no penalties makes this career choice very flexible. However, it is essential to maintain a sense of purpose from the start. So, ask yourself: do you want this to be a full-time, 40 hours per week job or something that you only work on twice a week? Drawing up an ideal schedule can be helpful, even if you do not stick to it religiously.
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Where do I see my freelancing journey going?
Some entrepreneurs begin as freelancers but have their sights set on owning their own companies, complete with employees, a business structure, and perhaps even an office. Other individuals are content to freelance on the side or sign on as full-time freelance workers as their career. All of these options come with pros and cons, so be clear about what you are expecting. However, also be open to the fact that your expectations and goals may change as you get more of a sense of the job.
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What are my goals, and when do I want to reach them?
Give careful thought to set specific objectives that you can easily mark on the calendar. For example, you might have a three or six-month check-in during which you measure profits, hours spent, and business growth in terms of new clients. However you decide to do this, plan carefully and use short-term and long-term goals. Make records of your freelance business’s results, too, so that you can go back and compare data over the weeks, months, and years.
2) Find Your Particular Forte
Sometimes, would-be freelancers are not sure how to define their niches. When an individual knows what they would like to freelance in, that does not mean that they have chosen their particular focus. These days mainly, each market can be divided up into a remarkable number of different categories. This is generally a good thing for freelancers because they are able to find a particular focus that lends itself to their talents. However, not all niches are profitable, and this is something individuals must be aware of.
Let’s use the example of a freelancer who wants to get into the writing game. One of the first things to consider is the impact of geographical location on the market. Someone with lower overall living costs might seek to charge less per hour or per writing gig than you will. However, if you are looking for work on the same platform—say, Upwork—like those who can afford to charge less, you might struggle, especially if the other freelancers share your qualifications. Some freelancers in this situation actually give up because their lack of profits grows more and more frustrating.
This is where the idea of finding one’s specific “niche” comes into play. If we stay with the concept of the freelance writing market, there are a plethora of different focus areas, with more and more seeming to surface each day. From blogging to ghost-writing, from white papers to legal content, it simply depends on what an individual wants to write. One can write copy for a publisher, help aspiring authors with their masterpieces, or write copy for the websites of various small businesses.
In any case, we suggest pinpointing two or three specific niches. You will find that valuable clients in top markets will pay top dollar for talented writers, which is true in most freelance markets. If you can find a niche that pays well and speaks to your passions, you will be in great shape as a new freelancer.
3) Structure and Register Your Freelance Business
As a freelancer, it is your duty to officially register your business. Also, you should want to complete this step because it will make you an “official” freelancer and undoubtedly be seen as more legitimate. Three choices exist in terms of business structure.
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Corporation
Usually, freelancers avoid this structure because of the unnecessary benefits that are awarded and higher costs, and more complicated arrangements. However, in some cases, a freelance corporation is feasible.
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Limited Liability Company.
While LLCs are popular with many business owners, they can prove a challenge for freelancers. This is because, generally, they are more costly to start and a bit more complex to establish and run. However, a significant advantage here is that LLCs are structured so that the individual is not liable for the business; therefore, there is some financial freedom there and a better tax arrangement.
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Sole Proprietorship.
While sole proprietorships are relatively easy to start as well as affordable, individuals are liable for the finances of the business, unlike the conditions present in an LLC. However, combining low accountancy fees with an easy startup makes this structure a popular and viable choice.
When choosing a business structure, it is helpful to consider your future freelance objectives. For example, if you think you will pursue a freelance career for a while and want to be independent, becoming a sole proprietor will allow you to run your own small business in an affordable and streamlined way. However, if you like the idea of not having personal liability wrapped up in the industry, you might elect to form an LLC. Also, do not forget that a company’s structure can change over time. In a few years, you might decide to expand or even shrink your business, so at that point, it would make sense to restructure. If individuals find they have more questions about freelance business structure, it makes sense to contact a licensed business lawyer.
4) Choose a Company Name and Logo Design
It is time to get creative. Don’t worry if you are not a natural artist or designer because this step depends more on efficiency and solid decision-making than artistic talent. First, choosing a name for your freelance business is very important and will be needed when you register your business and commit to a specific structure. Many freelance entrepreneurs use their names as a business title—and if you are committed to running a sole proprietorship, you must use your name for the business. However, there is also the option of using a DBA name if there is a different fictitious name you would like to try that you think will be good for business.
Next, design a logo. A neat, clean and eye-catching logo is something that every professional business should have because it helps to differentiate your freelance company from others. Also, a simple logo inspired brand recognition. We are not saying that you need to fine-tune the perfect logo for weeks on end: you just need to find a simple symbol, shape, or graphic that will inspire trust and exhibits professionalism. Online, there are many logo makers to choose from that are affordable and automated unless you happen to be friends with a graphic designer.
We also recommend using a professional email signature that includes your logo and perhaps a photo, a brief description of your freelance business, and contact information. Of course, your logo will also figure into your social media accounts and handles and your website, but we’ll get to that shortly.
5) Price Your Projects, but Stay Flexible
One of the most important aspects of starting your own freelance business is establishing a comprehensive pricing strategy. There are a few different rates and methods that freelancers use. Some workers like to use an hourly rate. This involves checking on the going rate in your industry and using that as a guide. Other freelancers find that a flat fee works for them. This type of system is based on a charged set amount that does not change based on the amount of work or time. Still, others use project quotes to charge different rates for unique projects.
Many freelancers across different sectors use a combination of all three of these pricing strategies, basing their choices on the type of job, the amount of work and hours needed, and the actions of their competitors. We recommend conducting some online research to check on the state of the market before you dive in. Websites such as Payscale, or Glassdoor, can be helpful in providing pay rates and scales, and it may also be beneficial to network with other freelancers via social media. For example, do not be nervous to ask an established freelancer a question on Twitter because most people enjoy helping out up-and-comers who are new to the game. The worst thing that can happen is that someone does not respond based on simply being too busy.
One fundamental rule to remember is that in pricing, flexibility is critical. Individuals do not usually like to hear this. Still, many freelancers begin with jobs that are a bit below their target paycheck because they are seeking experience and want to build a portfolio. Taking a few gigs that are below your price point may be hard to swallow, but the positive reviews and public feedback they might create are a great bonus and essential to the success of your new business.
6) Obtain a Domain, Website, Social Media Handles, and Sites
An email campaign is a great way to get your name and new brand out there, but freelance business owners also rely on their websites. Once you have your business name locked down and your business is registered, make sure to reserve a domain with the same name. Then, set your sights on creating a modern, simple website that will allow prospective clients to see who you are and what services you offer, at the same time showcasing some of your past work (if you do not have many clips yet, that is all right—you will build them up!). Building a website can be done in two ways: you can use a builder such as Weebly or Squarespace, or you can have someone make the site for you. These days, drag-and-drop programs are simple, fun to work with, and accessible to even the least tech-savvy individuals.
The importance of your website cannot be overemphasized, especially if you do not have a brick-and-mortar office yet, or do not plan on having one. Accessing websites is increasingly the number one way that people find out about new businesses and contact them directly, including through social media. Show clients your individuality, your talents, and your interest, all while giving the public a sense of how your services will help them. From Facebook to Instagram to LinkedIn, these platforms enable us to advertise freely and effectively. Putting yourself and your business out there has become the name of the game, so work on gaining those followers.
7) Build a Base of Clients and Keep Adding New Customers
This is an exciting time. You are just getting started as a freelancer, yet you have already accomplished much. You have found or created a specific niche, drawn up a logo, configured your socials effectively, and even set a fair and profitable pricing system. But how can you build your list of clients?
There are a variety of ways to grow your business, and what works for one company does not always work for the next. In any case, the goal stays the same: to find one freelance gig and enter the market, and then repeat that step until you are the one turning down offers. Clients can be contacted these days directly via social media or email, and networking on your industry’s popular platforms can be beneficial. If we return to the example of the freelance writer, it is crucial for the individual to not only spend time on Upwork (a reputable site for writing work) but other lesser-known sites that are also devoted to freelance writing.
Also, think about your current acquaintances: do you know people who regularly use freelance work for their own businesses? Do you have colleagues in the same market that might help by recommending your services? Often, one job can lead to the next if you do a good job and the client is satisfied. Individuals who are just starting out can also look into paid membership platforms if they think it is worth including something new in the current budget.
Once you have found a gig or two and have some experience, you can network with current clients while focusing on your target market. Often at this point, your target market begins to change as you understand who is seeking your services. Figuring out where the demand is will guide your advertising and marketing efforts. For example, if both of your current clients use Twitter exclusively, you might try advertising there to find additional, similar clients. Or, if one current client tells you that your email campaign hooked them, you might focus on that. The point here is that when new freelancers have the correct tools and knowledge at their disposal, they can try various approaches to finding clients and land the ones that work. Lastly, remembering to be flexible, approaching each job with professionalism and a sense of understanding, and always being ready to learn are essential aspects of being a top-notch freelancer.
Go Freelance!
We hope this has been a helpful guide on starting a freelancing business. If you have questions about starting a freelance business, please contact the skilled business lawyers and corporate attorneys at Nakase Wade. During a free consultation, we can answer all of your questions about your first foray into the freelance world. Good luck!