September 8, 2020
You took the big leap and did something scary—you started your freelance business. But the freedom that the self-employed life gives you can be a double-edged sword: now you can do whatever you want, but what do you actually need to do to get started? Here are some tips to give your business a boost right from the beginning.
When you finally make the jump into freelancing, the possibilities are endless. But in order for your dreams to take off, you need to determine a few very important things.
The clearer your mission, the more effective you’ll be in targeting the people who really want to hire you, managing your business spending, and building your brand.
When you start your business, you’ll need to determine what legal structure is right for you: LLC, S-corp or sole proprietorship. Check with your local laws to see what is required for your venture in your state, and/or speak with a lawyer or accountant. Some states may require business licenses depending on your industry.
This can be one of the hardest things to do, as many freelancers are afraid to scare off potential clients with prices that are “too high.” Do some research into your field to compare your rates with what others are offering, while also taking into account your level of experience and your living costs (including health insurance and retirement). We all tend to undervalue our skill sets and have a bit of imposter syndrome at the beginning, but rates demonstrate how valuable your services are and keep you from driving yourself into ground with a workload that isn’t sustainable.
While many freelancers balk at start-up costs as they begin to add up, this is not one you should skip out on. A good bookkeeping system will eliminate a mountain of headaches come tax time, as it will help you keep track of your business income and expenditures in a way that’s much easier to parse. Some systems even have built-in mileage tracking and invoicing platforms, allowing you to consolidate much of your administrative workflow into one easy-to-manage location.
Financial organization is key for freelancers, and the more you keep tax season in the back of your mind throughout the year, the happier you’ll be when it rolls around. Keep your bookkeeping system up to date instead of waiting months to categorize expenditures and pay those estimated quarterly taxes. If you don’t, you might end up owing a substantial chunk of change come April 15th.
Similarly, the first year is going to be full of financial irregularities, and having professional insight to assist with tax filing and other financial decisions could save you from a costly mistake down the road.
Having a freelancing business is great, but it means next to nothing if you don’t know how to market yourself and your services. Determine what communication avenues your industry employs most and pour your efforts into networking online and in person. Make a good website, research industry conferences, newsletters, and publications, and build up your brand via social media.
People will tell you that the self-employed life will be “feast or famine” and they’ll be right. No matter your niche, you will have great months and you will have slow ones, so it’s best to be prepared for when the well runs a little dry. Low-risk investments can serve as good protection should you run into a tough spot, and having a good saving plan in prosperous times will give you a little bit of cushion should you need cash immediately.
By nature, freelancing can be a bit isolating, which is why we recommend (with emphasis!) connecting with other freelancers in your field. Share your industry knowledge, commiserate about the tough stuff, and build each other up as you all progress in your ventures. Collaboration over competition—it’s better for your business and your mental health.