So you want to freelance, become your own boss, run away from the typical nine-to-five routine and work from anywhere you want. Congrats!
Before you hit the ground running to find work and bring in money, there are some things you need to consider. It’s important to lay some foundation for your business, which is why we’ve put together this short list of 5 things to know if you’re thinking about becoming a freelancer.
1. Be specific: what are you selling?
Ask yourself what specific service or skill you’ll be selling to the world as a freelancer. Is it a virtual assistant service? Perhaps you’re great at coding specific languages, or maybe it’s graphic design. Have a look into what experience you have and pick a specific skill that you are passionate about, able to render and set up a business around.
The more specific you are, the better. This helps to brand who you are as a freelancer. In the long run, this will help you at both networking and gaining new clients as people are clear about what you do.
2. Money, money, money — how are you selling your freelance service?
Once you’ve decided what your business is about, the next thing to do is decide how you’re going to sell your service. As you will be working remotely, here are a few key aspects to consider:
Have a think about the customers you want to work with and where will they be located. Do you want to work with small companies or bigger ones? Will they be local customers, international customers or both? This will help determine:
- When you work, i.e. timezones
- How, as well as where, you will be promoting your business
- The kind of communication you’ll be having with your customers, e.g. Skype/Slack, normal phone calls, email
Hourly, monthly or project basis
As a freelancer, you can choose how you want to bill your customers: per hour, per month and/or per project. Some freelancers charge per hour, some charge per project while others charge on a monthly basis. It’s up to you to decide how you will be charging your customers. This may also be dependent on the work brief you get from them.
Forms of payment
Will you accept bank transfers, cheques or sometimes even cash payments? Will you be willing to use PayPal or other payment gateways to receive money? Deciding on what forms of payment you will accept will also help you when it comes to accounting, especially if you have international customers who use different currencies, e.g. USD, Euro, Pounds.
When to invoice
Will you be doing invoices on a certain day every month? Or will you be invoicing your customer right after the work is done? While this may be dependent on the work brief that you get, it’s good to decide when do you invoice your customers so you can make this clear to them.
Payment time frames
Have a think about what payment timeframe is acceptable for you — is it 7 days, 14 days, or 30 days? Depending on the terms of your client, this is another important aspect to decide so that you can tell them what you accept, and negotiate if their expectations are different to yours.
3. Where will you be selling your freelance service?
There are many places where you can promote your business and gain work from clients. While family and friends can be an option, there are other ways such as freelance marketplaces, social media, online groups and more. Many freelancers use a combination of marketplaces, social media and online groups to promote themselves so that they are highly visible — something you may want to do as well.
Being specific about what service you provide can help you to decide where you’re able to promote and sell your service to gain visibility and ultimately, clients and work.
4. Business fundamentals
Just like building a house requires architectural plans, your freelance business requires some fundamentals too.
Establishing a business entity
While you can do business under your own name, it is advisable to establish a business entity for your freelance service. Having a business entity will make you look more trustworthy in the eyes of potential clients. In fact, there are clients out there who may work with you only if you have your own registered company.
Your business accounting
How will you be doing your business accounting? Being your own boss is fun but it also comes with the ‘headache’ of having to do your own taxes. What are the laws like in your country? How often do you have to pay taxes? Can you do this yourself or do you need some help? These are things you have to consider and it’s good to do it now, before you are swamped with client work and things get more complicated.
Your website and social media
Having a website for your freelance business is a great way to promote what you do and showcase your work. It also makes you look better when you have your own domain and an email that corresponds with that. You would also want to look at setting up your own business social media accounts so that you can promote yourself there. Yes, we’re talking Facebook, Twitter and LinkedIn, and possibly Instagram depending on what your business is about.
Deciding on your workplace
Where will you be working out of, and where are you most productive? While some like to work out of a home office, others prefer cafes or coworking spaces — which may cost a bit (and may be deductible as business expenses). Depending on cost and convenience, it’s up to you to choose where you would like to work out of.
Are you staying put or travelling?
Adding to the decision about your workplace, the next question is whether you are staying put or travelling. What exactly does this mean? It means that you may decide you want to be location independent both locally and internationally.
Perhaps you would like to stay locally, but do the occasional business trip and work from where you want — your home office, a beach in the next town/city nearby, a garden you’re visiting for the weekend. Or perhaps you might want to be a digital nomad, start travelling and work from anywhere around the globe.
5. Last but not least, get Xolo!
After considering all the different aspects on what to do before becoming a freelancer, here comes the next big question: why should you get Xolo?
Put simply, because we help you with some major business fundamentals that are key to a successful freelance business:
- Setting up your business entity and running your business easily
- Accounting, banking and compliance all in one place
- Dedicated support team that’s just an email away
With millions of people worldwide choosing more freedom in their lives by freelancing — freelancers will become 40% of the workforce in the US alone by 2020, you’re not alone. As freelancing and the independent work lifestyle are here to stay, ensuring that you set your business up right is one of the keys to harnessing the best of what freelancing can give you.