Freelancing: A Beginner’s Guide to Doing It Right

by Kentin Waits on 28 January 2013 2 comments
Photo: EdYourdon

Depending on the field you’re in, freelancing can be a great way to make extra money or transition into a full-time flexible career. But doing it right takes some planning and strategy. If you’re considering freelancing as a way to supplement or replace your current income, here are the basics on how to get started. (See also: 30 Great Side Jobs)

Network

As with any other business, networking makes all the difference in the freelance world.

Use past work connections, friendships, social media sites, and professional groups to get the word out about your services. Have an elevator pitch ready to explain what you do, your qualifications, and what sets you apart from the competition. Though networking is a never-ending process, it’ll become easier as your body of independent work builds and satisfied customers begin spreading the word.

Research and Set Fees

Knowing what to charge can be tricky. Most freelancers make one of two mistakes when it comes to setting their fee structure. Either they underestimate what the market is willing to pay (short changing themselves in the long run), or they price their services too high for their experience level (alienating potential new clients).

Use online research tools to determine what independent contractors are making in your field and in your area. Find the sweet spot based upon your background and skill set.

Establish a Rate Card

Once you know the general range of what you’ll be charging, establish a rate card that outlines your menu of services.

Think of every potential project you could land.

  • Will you charge per hour or per project?
  • How might your hourly rate change based upon the complexity of the work?

A clear outline of prices (or even a good estimate) will help clients anticipate expenditures and budget for your services.

Pitch Recurring Projects

Big projects are great, but they’re inconsistent. Pitching recurring monthly or quarterly projects to clients will show initiative and help smooth the peaks and valleys in your freelance income. Even a few modestly priced “maintenance” projects that you can count on every month will make a world of difference financially — especially in the beginning.

Create an Invoicing System

Once you have a rate card and are assertively pursuing projects, it’s time to create an invoice. Here, simplicity is key. Create a one page Word document that includes:

  • Date
  • Your business name, address, and phone
  • Tax ID number (if applicable)
  • Client name, address, and contact person
  • Project description
  • Date work was completed
  • Agreed upon fees and totals
  • Method of remittance
  • A thank you

For examples of invoices that tick all the right boxes, check out these slick designs from Smashing Magazine.

Every client has a different payment schedule and as your work expands, you’ll need a way to track your invoices quickly and easily. I use a simple Excel sheet with six columns: Client Name, Project Description, Hours Worked, Amount of Invoice, Date Invoiced, and Payment Status. It’s a bare bones way for me to check the status of my billings and helps ensure that no client gets invoiced twice for the same job.

Don’t Forget About Taxes

Remember, freelance work typically means you’ll be receiving a 1099 tax form and will be responsible for setting aside the proper income tax amount yourself. Depending on how you structure your freelance work and how much revenue you’re bringing in, you may be required to file estimated taxes quarterly. Discuss the particulars of your business with a tax advisor to make sure you’re organized for Uncle Sam.

Create a Freelance Resume and Portfolio

Typically, your first few clients as freelancer will be people who know you and know your work. But once you have some projects under your belt, it’s time to formalize it and reflect it in your resume. Create a separate resume or portfolio of work that you can use when pitching projects marketing your business to new clients.

Market, Market, Market

A successful freelance business takes constant attention. The work you’re doing today is probably work you pitched three months ago to a client you met last year. That long horizon must be factored into to your daily work and it’s a discipline that takes some practice to master.

Market your services online, offline, formally, and informally — always with an eye toward where you want to be in six months or a year. Oh, and don’t forget to thank current customers who send new clients your way — referrals are golden.

Are you ready to test the waters of a part-time or full-time freelance career? If so, some upfront planning focused on the basics can save you a lot of time and stress later. Happy freelancing!

Are you a freelancer or have you worked solo in the past? What tips do you have for newbies?

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Jon

Thanks for the great roundup of advice on freelancing. This information is useful to me for the small jobs I work on the side. I've found the biggest key is organization which is brought out by several points in this write up. I've got this saved in my Evernote and will be referencing it again for sure. Thanks!

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Dave

This is awesome, and the timing is great. I've been an artist forever and have finally picked up a little steam in the freelancing department. In the last few years work has been sporadic and niche - podcasts wanting logos, a few things in the video game space - but one drawing I did hit big on imgur.com in November (over 300k hits in a weekend) and that filled my inbox with requests. I hadn't done it commercially - it was my kid and dog in the style of Calvin and Hobbes, for our Christmas cards - but people LOVED it.

I say all that to say this... In a couple weeks' time, let's say I had something like 50 to 100 emails asking if I could do a custom drawing or cartoon. I responded to each, although I'll admit at one point there were so many that the note was a bit form-letter, but each response contained a rate schedule (along with comparable estimate for the drawing they'd seen on imgur), and a mention of the contract I'd be drawing up along with payment terms; if they were still with me after that info, they could go ahead and send me more details of their needs.

Once people got wind of the price range - call it a couple hundred dollars per drawing, ballpark - the number of potential clients that even bothered continuing the conversation was only about 25%. Of those, fewer still actually followed through. In a couple cases, the would-be client agreed to the deal but never signed the contract or replied further.

That said, I took the projects I was given, made a few bucks for the holidays, and my clients were thrilled with the work and didn't seem bothered by the prices at all, so hey, happy times. Just know that nowhere near all of the people enthusiastically taking your card are going to turn into paying customers. Same as in any business, really. You appreciate the ones who buy/use your service, and don't spend too much energy lamenting those who don't.

Keep your head up!

PS - I can't tell you how many Craigslist ads for 'creative gigs' I've replied to and never got a response at all. Not even a 'sorry, your style doesn't fit our needs.' Nothing. That feels really weird. Don't reply to any of the 'no pay, but it'll look good on your resume!' ones, either.