Tired of your regular job? Maybe you’ve thought about becoming a freelancer. There’s the allure of setting your own hours, tackling passion projects, and finally having a job that rewards your creativity. And, of course, freelancing affords you the ultimate power of being your own boss.
This is our extensive guide on becoming a freelancer. We’ll talk about how to know when to make the switch, how to set your rates, how to find clients, and the financial implications of becoming a freelancer. Is it right for you?
Becoming a Freelancer: When to Make the Leap
One of the most challenging parts of starting out in the freelance world is knowing when it’s time to make the switch. It’s not easy – you’re giving up the security of a regular job with a regular paycheck to strike out on your own. It’s a lot of uncertainty to deal with. You’ll need to evaluate your opportunities and the pros and cons of freelancing in your unique situation.
First, consider what sort of freelance work you want to do. Are you a graphic designer? A writer? A marketing expert? An event producer? If you want to make the move to full-time freelance work, you need to have a specific skill set to leverage. And once you’ve nailed down what goods or services you plan on providing, you need to do some market research to make sure there’s enough demand to support you. Check out jobs online and ask around within your industry to get a sense of what kind of work is available. Get creative with it – there are lots of opportunities out there but you may need to do some legwork and consider other ways to leverage your skills.
Next, consider what’s drawing you to becoming a freelancer. The benefits of being your own boss, setting your own schedule, and managing your own products may be too enticing to ignore. Or maybe you’ve climbed as far up the corporate ladder as you can and now you’re ready to challenge yourself make your own way. Many people also turn to freelancing due to a change in their family situation. Getting married or divorced, having children, or having children leave the nest can all change your needs and wants as far as work goes and freelancing may be a good fit.
Now, consider the cons. Freelancing isn’t easy – you’re going to have to hustle to bring in clients and keep them happy. You won’t have a steady income, especially at first, which can make budgeting a challenge. And to make ends meet, you may end up working long hours or weekends.
It’s never possible to be 100% sure that becoming a freelancer is the right move, but those considerations can help point you in the right direction. Finding success on your own will take a lot of motivation and hard work, but you have what it takes! Once you’ve decided to become a freelancer, it’s time to work on the core of your business – products, terms, and pricing.
Products, Terms, And Pricing
One of the hardest things about being a brand new freelancer is figuring out how much to charge for your work. If your previous employer set the rates for you, you may have no idea how much to charge for your time now that you’re out on your own.
Remember that at your day job, you were getting your wages, your employer’s portion of the payroll tax, and potentially other benefits in exchange for your work. Plus, tax was automatically withheld. As a freelancer, you’ll need to figure that into your rates – you’re going to have to pay your own benefits and taxes out of whatever you earn.
Many new freelancers are worried about charging too much, and it’s true that an extremely high rate can scare clients away. However, becoming a freelancer is only going to work if you can earn a living. The best way to get a sense of fair pricing is to talk to other freelancers in your area. Some areas have freelancer unions and you’ll be able to find other independent workers on social media. They can give you an idea of the market price for your work. They can also give you an idea of how to charge – whether hourly or for a certain amount of work.
If you can’t get in touch with local freelancers, there are other ways to work out a reasonable rate. Check out Creative Live’s interactive infographic to learn how to calculate a freelance hourly rate. And remember that your rates can (and probably will) change. As you get more established and better at your work, you’ll be able to command higher prices.
In general, try not to sell yourself short. There will always be folks out there looking for really cheap work. If you’re in a tight spot and you absolutely need the money, that’s ok – but you should always be looking for fair prices and standing up for what you deserve.
Now that you know what you need to charge, it’s time to get some work!
Finding and Wooing Clients
The secret to finding a steady stream of freelance clients can be best summed up with one word: Connections.
One of the most challenging aspects of becoming a freelancer will be finding your own clients. One of the benefits of corporate life is that clients may have been handed to you by higher ups. When you’re working as a freelancer, it’s up to you and you alone to make it rain.
The most essential step in finding clients as a freelancer is developing your network. Look far and wide to meet new faces and potential business contacts. Seek out local professional events, sign up for seminars and conferences, and attend courses in your industry. The more professional connections you can make, the more potential clients you can pitch to in the future. Social media is another powerful tool for drawing in clients and getting your reputation out there. You can use it showcase your work and connect with other freelancers and potential clients.
As you expand your network, don’t neglect other freelancers. The freelancing community is often very tight-knit and they’ll be able to help you find work. Don’t view them as competitors – view yourselves as a group of independent workers that can help support and encourage each other.
Remember that as a freelancer, you may be dealing with potential clients at any time. Someone you chat with while waiting for the subway or while you’re having a drink may need what you have to offer. Consider having business cards made up with your key information so that you’re always prepared to make a professional connection.
The Financial Implications Of Becoming A Freelancer
As we mentioned above, your day job came with wages, payroll taxes, withholding taxes, the supplies you need to do your job, and potentially other benefits. They handle the accounting. But becoming a freelancer means you’re taking all of that on yourself.
First, you’ll need to set your prices accordingly – your hourly rate as a freelancer is going to be significantly higher than your hourly rate as an employee because you have to deal with all of the costs that your employer would otherwise bear.
Secondly, you’ll need to adjust your tax management. Employees pay half of payroll taxes and employers pay the other half; that money goes toward Social Security and Medicare. As a freelancer, you have to pay the entire thing yourself – a “self-employment tax“ of 15.3%.
In addition, self-employed people have to pay their taxes differently. Depending on how much you earn, you may need to file quarterly estimated federal taxes. You can also deduct a variety of business expenses from your freelance income, including any business supplies, travel, or lodging necessary to your work. A general rule of thumb is that if you would have needed those things even if you weren’t working, they’re not deductible.
That means you’ll need to keep close track of your income and expenses. It may be well worth your while to consult with a tax professional, especially when you first start out, to make sure that you’re in compliance with federal and local tax obligations.
Is Becoming A Freelancer Right For You?
Freelancing can be an amazing opportunity to take control of your own working life and use your talents the way you want to. With the right preparation and motivation, becoming a freelancer can be both lucrative and fulfilling. And if you’re not 100% ready to make the leap, consider adding some freelance work on the side of your day job – that will let you get a taste of what freelancing would look like and whether it may be right for you.