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How to start a freelance business the right way

freelance business

The typical 9-5 office job lacks the glamour it once had. It once provided the income, prestige, and fulfillment that once defined the American Dream – not anymore. These days, stagnant salaries, 12-hour work days, and piles of soul-crushing work are becoming the norm.

Is that all there is?

No. There are people who still enjoy their careers in 2018, but many have chosen to build theirs from the ground up. The freelancing revolution is in full swing – by 2020, 43% of all workers in America will be self-employed.

Want to join them? Below, we’ll talk about everything you’ll need to address before you can make your favourite coffee shop your new office.

Find an overlap between your skills and what the market needs

Writing, graphic design, web development – these are just a few areas in which you can specialise as a freelancer. To succeed, though, it is vital to research your target market’s needs.

If hundreds of writers in a specific region are churning out the same content, it will be tough for you to make ends meet.

On the other hand, finding someone who writes quality ad copy can be difficult. Specialise in this niche, and you will be able to earn much more per project than lower skilled writers.

Whether it is writing technical documents for oil & gas companies, coding SaaS apps, or creating covers for e-book authors, a lucrative income can be found at the intersection of your skill set and the needs of the market.

Name your price

The temptation to undercut the competition can be overwhelming – don’t do it. First, most established freelancers are too well-connected to worry about having future work opportunities ‘stolen’ from them. Second, underpricing oneself can create a poverty trap that can be tough to escape from.

To figure out a fair rate for your skill set, research the websites of colleagues who do similar work. If their fees aren’t displayed, contact them as a ‘customer’. This may feel awkward but remember – successful freelancers get dozens of e-mail messages every day.

You will be far from the first person who ghosted them after sending over their rate card. If this bothers you, be transparent about your intentions – many freelancers are happy to help out their brethren.

Create a high-quality website

It is not enough to be on social media. A website gives self-employed professionals a platform to sell themselves to clients around the world. On it, you can break down the services you offer, showcase your work in a portfolio, display testimonials, and more.

Don’t think you have the technical prowess to set up a website? It has never been easier for everyday people to get their own web portal up and running thanks to WordPress.

Web hosts like Bluehost and HostGator offer a streamlined installation process that usually takes less than five minutes – you don’t need to be a nerd to set up a website these days.

Can’t afford to set up your own domain? Establish a web presence for free on WordPress.com or Blogger. While we recommend having your own space, this is a quick way to get on the web for no cost.

Once you are ready to show your site off to the world, optimise your site’s SEO, buy some Google Ads,  get on social media, and print business cards – these steps and others will make it easier for clients to find your home on the web.

Learn about taxes

taxes

As an employee, taxes are something you never have to think about. Every two weeks, the payroll department automatically deducts local and federal taxes, as well as entitlements. When you work for yourself, though, this responsibility falls squarely on your shoulders.

A newly-minted freelancer’s first tax season can be a painful one; not because of the amount they owe, but because they forgot to budget for it in the first place.

Make an appointment with an accountant before sending out a single invoice. They will educate you on the records you’ll need to keep, quarterly filing dates (if applicable in your area), tax breaks, and so on.

At minimum, calculate your effective tax rate and deduct this amount from your daily gross earnings. At month’s end, transfer everything that is owed into a segregated savings account. This way, you’ll avoid spending money that isn’t yours.

Prospect for clients

Now that you’ve learned how to set up, market, and run your freelance business, it’s time to get some clients. With any luck, some may have already reached out via your website. If not, it’s on you to find them.

But before calling or e-mailing every company in your area, take a second to think about the work you want to do.

You may be an ace at building websites, but if banking bores you to tears, taking on clients in finance might not be the best idea. If you constantly check out houses on your morning jog, though, designing sites for real estate agents might be a better fit.

Next, draft a solid pitch. Feel free to reuse it for multiple prospects, but leave plenty of room for customisation – nobody likes to receive a generic pitch e-mail they’ve seen dozens of times before.

Cut to the chase – quickly explain what skills you bring to the table, as well as the specific value you intend to deliver.

Keep a record of every business you contact. This way, following up unanswered pitches becomes easier. Most successful entrepreneurs are busy – sending them a gentle reminder two weeks later will increase the likelihood of a reply.

Cut the cord

Unless you have six to twelve months of expenses saved up, we don’t recommend quitting your job to start a freelance business. Instead, leverage your free time outside of work to build your practice on the side. This way, you’ll avoid having financial stress influence your decisions.

Once you have built up an income you can live on (as well as the six to twelve-month buffer mentioned above), schedule a meeting with the boss and turn in your two-week notice – the real work is about to begin!

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