Choosing to enter the freelance world is a big step. Whether you’re doing it because you’ve been laid off from work or simply want to be your own boss, there are many things you’ll need to know before taking the plunge. I’ve boiled it down to my top five, in no particular order.
Have a contract in place
Before you begin any work, make sure you have a signed agreement. You’ll need this to fall back on if things go south and you stop getting paid. Freelancers who start out sometimes make this rookie mistake. But it can be a costly one, especially if the client fails to pay because they claim you didn’t deliver. You can avoid this by ensuring everything is spelled out in a contract, including specifics about the work you’ll perform and your compensation. Check out freelancersunion.org for more information.
Be great at budgeting
When you have a steady paycheck, then it’s easier to manage your money, theoretically speaking. But unless you have a stable of clients who provide regular work, there will be weeks or even months without income. Plan accordingly. Know your monthly expenses by keeping a spreadsheet and updating it consistently. (There are apps to help you manage business expenses, like SPENT). Identify areas where you can spend less during lean times. And most importantly, don’t forget to make those quarterly estimated tax payments. A good rule of thumb is to set aside 30% of your revenue. You don’t want to come up short on April 15th!
When you work a 9-5 job, you don’t have to worry about getting clients. Your employer IS the client. As a freelancer, you’ll always be seeking clients even when you have a regular roster. So, market yourself like you would any brand or product. Build a website, showcase your work and let the world know how amazing you are. Reach out to your colleagues, friends and family to let them know you’re looking for clients. Be all over social media and out in the world networking.
As a freelancer, you’ll have to manage your expenses that go along with running a business, like office supplies, for example, as well as those for which you’ll be reimbursed from your client, like mileage. It’s important to track expenses and report them on your income tax returns. You’ll want to be sure to take every deduction you’re entitled to. To track your miles, use one of the many apps out there. As for expense management, SPENT can seamlessly take care of that process for you. It also offers cash back on many of your purchases.
Have a Life
Merging our personal and business lives has become a lot easier in this technological age. We’re connected 24/7 through our apps, programs and social media. As a freelancer, you may find yourself working days, nights and weekends, particularly if you have multiple clients. You may be trying to keep everyone happy because you never know when the work may dry up. Just make sure to shut down periodically to have some balance. If you burn out, you won’t be any good to your clients. More importantly, you won’t be any good to yourself or your family.
There are many advantages to freelancing and being your own boss. But like any business venture, there are risks involved. By covering your bases, you’ll minimize mistakes and better your chances of success.