Is It Time To Go Freelance?November 19, 2019 in Employee
Independent work is an absolutely thriving economy that has attracted over 56 million Americans and counting, according to a Freelancing in America 2018 Study by Edelman Intelligence. The study, which was commissioned by freelance platform Upwork and the Freelancers Union found that freelancers were much more likely to attain their desired lifestyle compared to non-freelancers.
The study goes on to cite technology as one of the biggest drivers in accessing freelancing opportunities. But is it time for you to go freelance? The U.S. Bureau of Labor Statistics says that wages have remained almost stagnant for most people, and the cost of living has increased, while growth has remained uneven across all job sectors.
Independent work is providing an alternative avenue for workers across the U.S. to achieve their economic goals. America leads the pack when it comes to the number of freelancers globally, where more and more companies are opting to hire freelance contractors as a cost-effective and flexible alternative to the status quo.
So, How Do You Get Into Freelancing?
The freelancing industry, nowadays more often monikered the gig economy, is driven by three aspects: one is the freelance worker who provides a service and receives payment per job, second is the customer in need of the service, and the third is the platform that facilitates the meeting of the two.
So to become a freelancer, you must have a service or skill to offer, get onto a platform that supports your specific skill set or service, and find customers looking for your services. Sounds simple enough… right?
Benefits of Freelancing
Freelancing is appealing to people because it allows them to
- Choose who to work with
- Work from anywhere
- Potentially make more money
- Get valuable on the job training
- Do what they love
Unfortunately, contrary to the hordes of clickbait articles, freelancing isn’t necessarily an easy and fast way to make money. Independent work is not a get rich scheme. It requires discipline and systems to work effectively for you.
Below we talk through five crucial steps to help you transition into freelancing smoothly.
5 Steps to Becoming A Freelancer
Identify your skillset
What do you have that would make you invaluable to paying companies? That’s your skill set, your bread and butter.
Be it writing, photography, web designing, pet care, orang milieu of other skills, it’s crucial that whatever you pursue as a freelancer makes you happy and fulfilled. When you think about it, there’s really no point leaving a job that you dislike to work in a niche you hate as a freelancer – and that’s a common trap people fall into, taking on worse work for the sake of being a freelancer.
Once you have identified your skill, narrow it down to what makes you stand out in that skill bracket. Think of it like this: There are 100 people in your locale, including yourself, with the same skill and you are all competing for the same business opportunities. Why would a company hire you over the other 99 freelancers?
Here’s why: You have a credible reputation, great personality, impressive network, creative flair, and exceptional reviews from customers and colleagues. These are the things customers will look at when choosing a freelancer to work with.
Identify your goals
The thought of working independently is exciting but stick to measurable goals. To do this, you first have to decide whether freelancing will be part-time or full-time for you. Identifying which type of freelancer you want to be will help you understand whether you
a) Want to make money on the side apart from your day job
b) Are building up to your own business venture.
Also, defining your goals helps you know how many clients you need and how much to charge them with your living expenses in mind. If you’re starting as a part-time gig worker, you’ll still have the security of a paycheck from your day job.
However, full-time freelancers should consider their savings and whether that could sustain them as they build their freelance business. There’s a painful reality to your first few years as a freelancer; for one thing, get used to overdraft fees.
Set the price for your services
The price you set for your services should enable you to meet the cost of your living expenses and your income goals.
Consider this: you’re working towards living a certain lifestyle, and your income needs to facilitate that. Your prices should reflect the value you offer and not be determined by the competition. One of the toughest things for a new freelancer to do is value themselves – and charge accordingly.
To help you value your services, consider what your overall expenses will be and list them. These include medical care, education, childcare, food, clothing, housing, transport, job training, software, taxes, and savings, among others. Remember, the above are no longer being subsidized by your employer. Since all will be settled out of pocket, set a price that enables you to meet all these needs effectively.
Don’t use your previous salary as the standard for what you charge. Aim higher for a sustainable lifestyle.
Find the right clients
To find clients, you have to identify the type of businesses that need your services. Get in touch with them and pitch your services. Make sure the pitch goes to the decision-makers in the company. Cold pitching emails may be more effective than phone calls and create room for more conversation and follow up questions.
The right clients understand that your value dictates your price. At first, you may have a general approach to finding clients and work with everyone in your niche. But with time, you want clients that contribute to your Financial Wellness, so you start to identify your best category of clients.
This may mean fewer clients, settling on looking at better-paying clients who can refer you to the same ilk of companies or brands. The key to finding and retaining high caliber clients is consistently delivering high-quality work that contributes to the success of their business.
This approach builds you up as an authority in your niche and the go-to person for a specific client base. Nothing drives long-term success as a freelancer more than reputation and thought leadership.
Create an online presence
On the topic of thought leadership….
A freelance business needs lots of support, and your online presence is an excellent tool for this. A portfolio website shows a potential client your services, work, and with reviews from previous clients, your reputation. That’s ultimately what convince your clients of your capabilities and expertise.
Regardless of the niche you choose, every portfolio website needs testimonials. Always update the site with your work to show the clients what you can do. Oh, and set up a social media presence – nothing scares off potential clients more than an “off the radar” freelancer.
Areas to prepare for when becoming a freelancer
Taxes get complicated quickly when you are working independently. There are deductions and tax payments that are unfamiliar and when mishandled can result in an audit. To handle this, hire the services of an accountant. Besides, as your business grows, you will have someone on board to handle matters like payroll.
You might even be well suited to hiring a freelance accountant! Who better to understand the nuances of contract taxation?
An invoicing and payment system is crucial in any freelance. Having one frees you to focus on doing your work rather than following up on payments with clients. A system from day one helps you track who has or hasn’t paid and makes it easier and faster to invoice new clients.
Apps like BizExpense Tracker and Expensify can help you especially as your business scales up and you start having to consider issues like employee advances.
It’s also vital to have time management tools like Trello, Scoro, or Asana to help keep everything flowing fluidly. If you can afford it, bigger software implementation as you set up your system will save you a lot of headaches in the long-run as your business grows.
iv) Official documentation
If you create an LLC, make sure you have the right documentation from the government. Licenses and permits are crucial to keeping your business running legally and smoothly. This part may come later in the freelance journey, but it doesn’t hurt to prepare for it in advance.
For example, if you want to work in the FinTech industry, you have to adhere to several regulations to stay on the right side of the law. Too many freelancers dive in without taking the necessary steps and later find themselves in a world of (legal) hurt.
Finding the Right Freelance Partners
Freelance platforms like Upwork and OpenForce have provided gig workers with a place to market their services and find clients. It’s probably no surprise that some of these freelance platforms like Upwork commission entire studies because they connect literally millions of freelancers with customers daily. Upwork alone is responsible for over a quarter of the world’s contracting gigs.
These platforms can be a start, but they don’t need to be the only place you rely on to get clients. Other recommended methods like cold pitching can land you some of your best-paying and most loyal clients. But initially, as you build your confidence, working with clients from freelance platforms can help build up your portfolio and negotiation skills.
Finding the right footing in freelancing is all in how you implement your plan to shift into an independent work economy. It’s extremely promising that freelancing is now an option for so many looking to veer away from the shackles of traditional employment, but it is called freelance work for a reason.
You have to put in the work to reap the benefits of a freer lifestyle.