Here are some tips for starting a freelance business:
1. First, determine what your business focus is going to be on, as well as the kind of services you’d like to provide. Decide, what you are, either skilled at or attracted to, and orient your service offerings to meet your clients’ needs. Among the most common freelance specialties include writing, graphic designing, programing, consultancy, etc.
2. Proceed to set up your workspace. While the nature of the business allowing you to be a freelancer at any place with the internet access, having a separate office helps a lot in pubbing such boundaries. Go through the whole checklist of tools on how to start a freelance business that you already have including: a good laptop, software, fast internet and so on.
3. Start with a portfolio site. Develop a site that exhibits your work, your services, testimonials from previous clients, and your contact details through which potential customers, learn a lot about you.
4. Set your rates. Figure out whether you will charge per hour or per project and the rate you will charge based on your skills level, the typical rates in the area you are an expert, and your expenses. To do this, you must understand what is accounting so that you can set your rates. Some freelancers begin by having a lower rate to get clients, and then increase their salary with time.
5. Promote your services. Your trust circle will play a significant role. Tell your friends, family, and former work colleagues. Make sure to include social and professional networking sites such as LinkedIn in your job search. Enter the major online marketplaces and look for relevant aspects to participate in. Reach out cold to people you’d like to work with and have them be clients.
6. First, come up with your organizational form. Do you plan to adopt a legal entity of sole proprietorship, LLC, or an S-corp? Be sure to license your business adequately while still following all necessary permits.
7. Manage finances properly. Develop simple and accurate records, prepare timely invoices, receive payments securely, carry out estimated taxes quarterly and reinvest the surplus earned back into your freelance venture.
8. Along the way, keep on improving skills and building up the customer base. Target to have satisfied existing clients refer new clients. Stay in sync with what is on demand regarding freelancing skills.
Do I need an LLC as a freelancer?
Here are a few things to consider when deciding if you need an LLC as a freelancer:
– Liability Protection. An LLC is a legal and financial entity through which you conduct your business so that your business assets are fully detached from your personal finances. In case if your organization is the party to a lawsuit, your personal assets are not considered to be liable. The type of the liabilities you have very much revolves around the industry you are involved in.
– Taxes. An LLC enables you to elect the non-default taxation option, which may provide some benefits when the business is a sole proprietorship or partnership, with multiple owners. On the other hand, one can decide to be taxed as an S-corp or C-corp if such consideration is deemed appropriate. You may also keep in mind your income level and running business expenses.
– Credibility. Issuing business licenses may appear more reliable and professional as how funds are managed can be accounted for and the money is safe from theft. Resorting to an LLC name can leave you with the privilege to keep you personal name undisclosed.
– Costs. Ltd. Co costs depend on the state you are establishing it in but usually range between $100 and $800 for the formation plus for running the business every year. Ready for extra accounting / legal assistance, too. Weigh costs vs. potential benefits.
– Administration. LLCs should only be created after someone has thought of this important aspect and has prepared everything: internal operating agreements, annual reports, separated finances, etc. Thus, more paperwork and records are nearly always needed.
Forming a limited liability company as a freelancer or running a one-man show is not a must, and particularly not at the beginner stage. Think about how the type of arrangement that you have might expose you to liability risk, how you would pay income taxes, and the costs against the adminstrative convenience. Sometimes an accountant or lawyer can help you with the question whether it is worth it to be an LLC in your independent business.
Read more:
How to start a freelance business
