You’ve decided to start freelancing, and it’s an excellent decision! You’ll have the freedom to work when you want, how you want, and you won’t have to answer to a boss or even wear pants if you don’t want to! But before you can get started, there are some things you need to know about the business of freelancing. This article provides to starting your freelance career as smoothly as possible so that you can work less, earn more, and enjoy your time as a freelancer more than ever!
Do market research
You may be a great writer, or designer, or developer—but unless you do some research on your local freelance market and what kinds of work people are doing, you could find yourself setting up shop in an over-saturated market. Before you start charging for your services, make sure there’s a need for what you’re selling. There are two ways to do research: First, search online and see what other companies in your field have done (and who they used). Or talk with people directly about their experiences; it doesn’t have to be a formal survey—just get together with some friends who also freelance and ask them how they got started and if they have any suggestions on areas to avoid.
Work out your business model
Decide if you want to go after clients, if you’re going to work with partners, and how you plan on making money. Will you sell your own products? Will you do advertising or write copy for other people’s businesses? You can go traditional or digital; it doesn’t matter which one you choose as long as your business model is clear and concise.
This is one of those self-perpetuating steps; by having clients, you’ll have a good idea of what success in your freelance career looks like. While networking events and personal contacts are still important, there are also lots of great ways to get work through online job boards, meetup groups, websites for freelance professionals (e.g., Elance). Even social media sites like Twitter or Facebook. You may even be able to turn some of your existing contacts into potential clients—just don’t use any hard sell tactics on them.
Set up your Tax Status
This is easy. If you’re running your own business, you don’t need anyone’s permission to be a freelancer; you can just declare yourself one. There are two forms you may have to fill out and file with your tax return at year end: Schedule C (if your net self-employment income meets IRS requirements). Form 1099-MISC if you paid $600 or more in independent contractor fees during year. And make sure that all of your invoices from clients are labeled as such so that when tax time comes around, you know how much income is tied up in what bills, so that you can deduct expenses accordingly.
Hire an Accountant
Freelancers are eligible for tax deductions and incentives for which you would not be eligible if you worked for a company. For example, your business expenses can be deducted from your income (including your home office). Self-employment taxes are lower than those you’d pay if you were an employee. Hiring an accountant can make all of these situations easier to navigate. You should also learn how taxes work in your local area as they might vary slightly depending on where you live. This is another great reason why having professional relationships with other freelancers in similar fields is important. They’re a wealth of advice, especially when it comes to navigating financial issues such as taxes!