You’ve seen it, right? The impressive prediction that by 2020, over 40 percent of American workers will be freelancers (AKA “contingent workers”)? That figure hovered at just 10 percent in 2014. The fast-growing trend of self-employment has two sides and two sources. On the one side, professionals — particularly millennials and Gen Y’ers — want more control over their work lives, including the ability to set their own schedules, income potential and tasks. On the other side, employers want the flexibility to adjust their workforce levels according to need, and they want to employ the most talented people for less money. When experienced professionals freelance, it’s a win for both parties.
If you have been thinking about becoming a free agent, either as a full-time endeavor or a part-time side gig, you’ll find success faster if you know what to expect. In addition to making the obvious decision about what services you’re going to offer as a freelancer, you’ll want to prepare in these nine important areas:
Be Ready to Market Yourself
Unless you can line up and keep a steady flow of clients via your connections alone, you’ll need to spend a considerable amount of time marketing your freelance services. Many self-employed persons spend up to a third of their work time on marketing, and not just at the beginning. It’s a necessary part of running a business, even if that business is just you. You must learn to like promoting yourself!
As a starting point, set up a website showcasing your expertise, what you offer and to whom, client references and, depending on your field, a portfolio. Create business cards and company brochures, as appropriate, for your line of work and target client audience. And don’t forget the awesome power of networking as a marketing tool. Whether it’s formal networking (e.g, in a professional association or a LinkedIn group) or the informal variety (e.g. sharing updates of your freelance activities with family, friends and neighbors), you should build in time for this important strategy.
Update Your Cover Letter and Resume
Even if you intend to leave the 9-to-5, fixed employment world altogether, you’ll likely still need to go through the traditional process to apply for freelance gigs. Most companies will request a cover letter and resume, and will want to do an interview or two. Remember that in many cases, organizations are looking for a contingent employee with whom they can establish a long-term relationship. They’ll want to make sure you are the right fit, both in terms of your skills and your reliability. Prepare to follow the usual rules of professionalism when applying and interviewing with potential customers.
Get Up To Speed on Taxes and Legal Matters
Know what a Form 1099-Misc is? You’ll need to if you want to be a freelancer. Though it’s not terribly complicated, you’ll have to learn the ins-and-outs of paying taxes as a self-employed business owner. You must also understand the legal requirements of setting up a business, including licensing. Lastly, you should fully understand contract documents, like non-disclosure agreements (NDAs), and client contracts, which protect you and the customer from misunderstandings and legal woes.
Be Creative about Finding Your First Client
Many freelancers need to secure their first client to prove to themselves – and future clients — that they’re capable of succeeding in this new career. Yet the first client is often the hardest one to score. Be prepared to work at this, but also be creative. Maybe the company you currently work for could be your first client, if you make them an attractive offer, i.e., your expertise working on a specific project at an overall lower cost to them. Offer to give a speech or write an article that demonstrates your expertise – and don’t forget to mention you’re for hire. Approach some prospective clients and offer a free evaluation, or mail postcards to them containing your sales pitch. Your first customer does not have to be a dream client that offers the most interesting work at top rates. The goal is to get started with one project. You’ll learn from it and, ideally, obtain a reference, which will help you secure the next client and beyond. With time and experience, you can trade up to bigger clients and better pay.
Look Locally, But Don’t Forget You Are Available Everywhere
It will probably be easier to find clients locally for your freelance work since you’ll be relying on your network of personal and professional contacts. Contingent on what type of services you offer, however, you could potentially find clients anywhere. A marketing consultant or a web designer, for instance, could just as easily be working for a business in Australia as for one in their hometown. As the global freelancing talent pool grows and becomes more attractive to businesses of all shapes and sizes, these same companies are becoming more comfortable hiring remote workers and communicating with them virtually. So, focus your marketing efforts broadly – you never know where the next client might be sitting.
Get Familiar with Freelancer Platforms in Your Niche
Once you determine the services you’d offer as a freelancer, you should familiarize yourself with any online platforms that bring together free agents and clients in your industry area. Toptal, for example, focuses on software developers, StudioD on content writers, and Guru on all manner of consultants. A note of caution: some platforms (especially those with bidding models) effectively enable a race to the bottom, where clients try to bid out work for below-decent rates. Nevertheless, platforms can be a good way to land your startup clients and to provide you with a look at what type of projects are out there as well as client expectations.
Understand Pricing and Your Worth
Setting rates as a freelancer can be tricky. When you’re new at the game and don’t yet have much to show, you’ll want to avoid setting your rates too high. At the same time, you don’t want to fall into the trap of offering lower-than-average rates to capture clients. The simplest way to set your rates is to base them on the average hourly pay you receive now in your job as a fixed employee, assuming you are planning to freelance in the same field. Another, albeit rough, method to do this is by dividing your desired weekly freelance income by the number of hours you plan to work each week. For realistic ideas of what others charge clients as startup freelancers, find a discussion thread – or start one yourself – on Reddit, Quora, or an industry-specific LinkedIn group.
Connect with Other Freelancers in Your Niche
Along with discovering what other freelancers in your industry are charging their customers, you’ll speed up your learning curve significantly if you connect with self-employed people doing what you plan to do. Spend some time identifying online communities or offline groups where freelancers gather to share leads, productivity tips, articles, and “how I got started” stories, and be prepared to contribute regularly. Use Meetup.com, for instance, to discover groups of like-minded freelancers in your area. You can even start your own Meetup group if you don’t find one that fits.
Focus on Client Relationships, Not Just on Projects
To avoid the “feast or famine” problem of freelancing, you’ll want to accumulate a handful of clients for whom you do regular work. This ensures a reliable monthly income and allows you, over time, to specialize deeply in an industry or functional area. The more of a niche expert you become, the more valuable and sought-after your services will be. Prepare to approach each project with the goal of building a relationship with the client that extends beyond the work at hand. Take the time up front to understand the client’s needs fully and deliver the best product you can. Follow up to make sure the deliverables have met their expectations, and thank them for working with you. Once you’ve established a rapport in this way, you can make suggestions for future projects that could enhance the client’s business. This is not just about your earning more money. It’s about becoming a business’s trusted advisor to your mutual benefit.
Although there’s plenty of buzz about the benefits of freelancing, it will not work for everyone at every stage in their personal and professional life. Look carefully at the costs and benefits of going solo before you leap. As a freelancer, you’re becoming a branded business and should treat it as such: plan carefully, consider every risk factor, prepare for ups and downs — and more likely than not, you’ll end up a winner.