11/15/2022

What Do I Need to Start Freelancing?

For most people, freelancing starts practically by accident. A friend or family member asks them to help with a project and offers to pay for it. Freelancing can be an excellent way to earn extra money on the side or to build a career around your lifestyle. It can be an occasional or full-time occupation and allows for great freedom and flexibility.

What do I need to start freelancing?

So what do you need to start freelancing? Not much, at the beginning. You'll need a client, a skill and a means to deliver the work.

When you're freelancing as a side hustle or part-time job, it allows you the time to find your marketable skill and build relationships and a reputation in your industry.

However, if you're looking to start a full-time freelance business then there is more to consider, since you're starting a small business. Considerations include how much income you need to bring in to make ends meet, setting aside money for taxes, securing health insurance and of course, legal issues.

Common legal questions about freelancing

At its core, freelancing is simple. And for freelancers in most countries, there aren't requirements for registration or creating a legal entity, other than paying taxes on earnings and having a valid business license.

Here is general information from an American perspective. It is intended to serve as a reference, not legal advice. For specifics and how it pertains to setting up your freelance business properly, seek counsel from a legal professional in your country of operation.

Do I need to register my freelance business?

In the United States, registering your freelance business is optional and you do not need to do so before starting freelancing. If you do nothing, your business is automatically a sole proprietorship, which requires no paperwork because you include your freelancing profits in your personal tax return. By the way, Legal Zoom has a helpful breakdown of the different business types, with pros and cons for each.

Do I need an LLC to start freelancing?

In the U.S. the two main business types are corporation and LLC (Limited Liability Company). There are different costs and requirements that come with each, and either (or none) could be the right choice for you depending on your business goals. Freelancers are not required to set up an LLC, although it offers a flexible business structure and offsets personal liability, so it's worth considering if taxes and liability are a concern.

6 tips for getting started as a freelancer 

If you want to start freelancing, but you're not sure what steps to take first, here are a few suggestions. Establishing yourself as a freelancer may take some trial and error, so take care to learn as you go and only keep what works for you and your business.

Choose something to focus on

You probably have many different skills, and when you're just getting started it will be tempting to offer anything, to anyone. However, as strange as it may sound, your business will grow faster if you focus on one thing rather than many things. 

Most clients want a specialist rather than a generalist, such as a UX designer, a copywriter, a marketing strategist, etc. And even freelancers with a larger focus tend to give themselves titles such as virtual assistant or online business manager to help clients understand what they do.

Determine your prices

Depending on the type of services you offer, your pricing will change. Are you going to charge by the hour? Have a day rate? Bill per project? There's no wrong answer, but you will need to decide what works best for you and your business.

If you're not sure what the industry standards are for your area, then spend time researching and talking with other service providers so you can get a baseline for what the market can bear. This will also help you determine which services to offer and how many clients you'll need in order to bring in the income you require through freelancing.

Let people know you're freelancing

When you're just getting started, you'll likely be doing most of the work to find clients, such as reaching out to local businesses, telling friends and family that you're looking for freelancing opportunities and responding to job postings.

Marketing is one of the most important things you can do as a freelancer. After all, how are you going to get hired if no one knows you're available?

Create a portfolio website

One of the best ways to showcase your work is on a website. Think of a freelancing website as your digital business card and add keywords about your services that your clients will be searching for. 

You certainly don't need a website to get started, but having a portfolio of previous work available makes it easy for potential clients to understand the work you do and how it will help them.

Set up an accounting system

Once you have a few clients, it may become difficult to keep track of invoicing. Setting up a basic bookkeeping system from the beginning will be a huge benefit once you actually need it. This will ensure you know what you've billed for, what's outstanding and how much income you've made.

You can start with something as simple as a spreadsheet, or invest in software that will help automate the process. Eventually, you may also want to employ a bookkeeper or an accountant to free you up to focus on your freelancing.

Choose a business address 

Even if you work from home, it's a good idea to set up a commercial business address. This both protects your personal privacy and establishes your professionalism and credibility.

Having a business address doesn't mean you have to work from a commercial space, as there are thousands of virtual office locations worldwide that specialize in supporting virtual or remote business owners with professional business addresses, mail receipt and forwarding, live web chat and more.

Freelancing is one of the easiest ways to start a business, and by following these simple tips, you'll be equipped to stand out from the crowd and put your best foot forward.

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