What does the American Dream mean to you? For some it means living debt-free or owning a home. For others it means having the ability to travel the globe or the opportunity to spend time volunteering for an important cause. Self-employment is an increasingly popular way for many to achieve their version of the American Dream, as it provides a more flexible lifestyle than a traditional nine-to-five job. Freelancing is a popular first step into self-employment.
People that use their skills and expertise to provide a product or service directly to a business are called freelancers. Writers, photographers, web designers, app developers, and a long list of other professionals commonly work as freelancers. They find clients, negotiate a per-hour or per-project rate, and get started. Most freelancers need nothing more than a computer and an internet connection. They enjoy the flexibility of working without a traditional ‘boss’ and during the hours they choose.
We have put together some practical tips to help you get started in the world of freelancing. As a freelancer, you will enjoy the flexibility and creative freedom that a nine-to-five job cannot always provide. However, you will also need to find clients, negotiate your fee, and manage your finances according to different tax rules, which are things you didn’t need to do as a full-time nine-to-fiver.
Even though freelancers don’t have traditional ‘bosses,’ they still need to find and land clients. Freelancers must market themselves and their skills in order to land freelance gigs.
- LinkedIn: Build a killer LinkedIn profile. It’s the best way to show off your digital resume. Don’t simply fill out the standard fields as this is your chance to shine! Read LinkedIn’s tips for building an online profile that will get noticed.
- Portfolios: A portfolio is a must-have for creative freelancers. If you work in copywriting, graphic design, videography, or any other creative art, you will need a portfolio that shows off your best work. Get started with products like Adobe Portfolio and Behance.
- Personal Site: Building a personal website or creating social media profiles can help you display your true colors. Have fun and show off your skills and expertise. Create an Instagram account that shows off your professional photography or a YouTube channel that boasts your videography skills. No matter what your profession, there is a social media platform you can use to attract customers.
- Get Connected: Moonlighting is a marketplace that connects freelancers with businesses and individuals across multiple industries. Try the Moonlighting iOS or Android app to get easily connected to people who are ready to hire. Get hired instantly right from your mobile device.
- Local Recruiting Agencies: Recruiting agencies aren’t just looking for full-time workers. They are always searching for freelance and on-demand labor to fill gaps. Do a search for a recruiting agency in your field, or ask your peers to recommend recruiting agencies.
Negotiating Your Fee
Once you find a potential client, you will need to negotiate your fee. First, ask your potential client about the scope of the work, the amount of time you have to complete the work, and the deliverables that may be required along the way. Be sure you understand exactly what the client wants from you and when. This information is crucial in setting your fee.
Once you understand exactly what is needed, then you can propose an hourly rate or a per-project fee. Be sure to consider your overhead costs, such as travel, equipment, materials, software, or other items you may need to get started. Set a fee that you can live with for the next year or two, as ideally this client will become a repeat customer.
Propose your hourly rate or your per-project fee in writing and be open to negotiation. When you have agreed on an hourly rate or per-project fee, put everything into a contract and make sure the client signs it. Include a description of the project, the due dates of each deliverable, the payment terms you’ve agreed upon, and anything else you believe is important. Elance.com has a great list of sample contracts that can help you get started.
Managing Your Newly-Earned Finances
As a freelancer, you are considered a self-employed individual in the eyes of the government, which means you will need to separate your business (freelancing) finances from your personal finances for tax purposes. As a freelancer, you must track your income, monitor your expenses, keep up with invoicing, manage your taxes, and much more. But never fear! There are a variety of tools to help:
- QuickBooks Self-Employed: It’s important to know exactly how much money you have coming in and how much you have going out of your freelancing business in order to be successful. QuickBooks Self-Employed helps you keep track of your finances, which is especially important at tax time. Taxes are different for self-employed freelancers compared to employed individuals. The IRS requires freelancers to pay estimated quarterly taxes, which can be daunting when you first get started. QuickBooks Self-Employed allows you to track your income and expenses, and it does the estimated tax calculations for you. Plus, you’ll be ready at the end of the year when you file taxes.
- HoursTracker: If you’ve taken on an hours-based freelance project, you will need to accurately track your hours. HoursTracker is a handy app that lets you clock in and out of jobs and calculates your earnings once you assign a pay rate to each.
- PayPal: Getting paid is the best part of being a freelancer! If your clients are open to paying you online, PayPal is an easy way to accept payments. Be sure to set up a PayPal account for your freelancing business that is separate from your personal PayPal account. You can add your PayPal details to your invoices and get paid quickly online.
Becoming a freelancer is a great way to fulfill the ‘American dream.’ For more helpful tips about getting started in self-employment, check out some of the other articles on our resource center.