1. Have Discipline
- Stick to daily, weekly, monthly schedule
- Still work at least 8 hours
- Stick to deadlines
- Learn new things
2. Legal Matters
- You must register your business
- 1. Get the Right Licenses and Permits – All businesses need some form of license or permit to operate in their state, county or city. In all likelihood, your freelance business is operated out of your home. So you may need a Home Occupancy Permit and a General Business License. You can get both from your local government website. Or simply use SBA’s “Permit Me” online tool for information about the licenses or permits you may need. Be sure to obtain these before you start doing any business.
- 2. Register Your Business Name – If you want to name your business anything other than your given name, then you’ll need to register a “Doing Business As” name with your local government. This guide explains how. If you use your own name, skip this step.
3. Pay taxes
- Pay Estimated Taxes – This one often comes as a surprise to freelancers, who may be used to having their taxes withheld by an employer. As a freelancer, it’s your responsibility to pay Uncle Sam and your state revenue agency almost as soon as you earn income each quarter. If you expect to owe $1,000 or more when you file your annual return, then you must pay estimated taxes on income. For information on how to calculate and make your payments, read: How To Calculate and Make Estimated Tax Payments.
- Talk to a tax specialist - it helps if you do this, a lot of them will see you for free to get business advice in hopes you come back at the end of the tax year.
- Create invoices - here is a sample
- If your client doesn’t present you with a contract, you may wish to protect your own interests by producing your own. This blog offers tips: Setting Up a Client Contract.
- Complete a W-9 Form When You Get a New Client – When you ink an agreement or start work with a new client, it’s likely they will ask you to complete IRS Form W-9 (you may have to ask them for it). Filling out a W-9 is straightforward: provide your name and social security number, or “Doing Business As” name. The client holds this form and doesn’t send it to the IRS; it’s a formal certification by you that your tax ID (SSN) is correct. The form also asks if you are subject to backup withholding – most taxpayers are exempt.
- Annual Tax Reporting: The 1099 Form – If you’ve earned more than $600 in a year from a client, they have to report these payments to the IRS through Form 1099-Misc. Your client will send you a copy by the end of January each year. Be sure it’s accurate – does the amount the client stated they paid you match your records? You don’t have to do anything with the form other than it in your records and use it as a reference when you report your annual income to the IRS. Think of it as the freelancer’s equivalent of the W-2 form.
4. Handle your finances
- This will take some research, but you’ll need to know your worth so that you know how much to charge. You should see if you can find out what other freelancers with similar experience charge and go from there. Also remember that you won’t get things that come with full-time jobs like insurance, 401K, sicks days, vacation, etc. Of course you can do these things on your own, but in the end it will cost you more as a freelancer, so you might want to compensate for that when quoting prices.
Pricing Your work
- Ask Yourself...
- What services am I pricing?
- How much does it cost me to run my business?
- How much money do I want to make?
- What is everyone else charging?
- How bad do people want what I have?
- How good am I at what I do?
- How long have I been doing this?
- Will I charge by the hour or the project
- How much can my client afford?
There’s no exact formula.
Both hourly pricing and project-based pricing have pros and cons
Pricing is a necessary part of freelancing.
Mistakes are a part of the process.
Your prices on your services and it will also impact your client’s opinion of your services.
Uncertainty is common.
The variety of prices is as wide as the variety of talent levels.
Losing a job isn’t always a bad thing.
Pricing can be a good way to weed out the tire kickers.
Some potential clients will think your prices are high no matter what you charge.
Charging more than you quoted may be necessary.
Starting out you’ll probably have to charge less than you’d like.
5. Set up Professional Communication
- Set up business email
- Im services, skype, google voice
- Webapps, meeting.com
- Personal website
- Twitter and facebook, link all pages together
- Use social media sites such as deviantart, behance…don’t pick one use all
6. Don’t Expect Stability
- Early on, freelancing will be unreliable
- Part time job?
- Give it 1 to 2 years to build
- US Small Business Association