Whether you’ve been thinking about going freelance for a long time or just recently decided that it’s time to make the move, a transition into freelancing requires forethought and planning. In fact, the most successful freelancers are those who position themselves well to navigate the ups and downs of a freelancing career.
Last week, we explored some of the most important things to think about before you start as a freelancer, and this week we discuss the first actionable steps you need to take. Here are five important to-do’s for your freelance transition.
1. Figure Out Your 90-Day Financial Plan
Most freelancers don’t hit the ground running. Unless you begin with a solid roster of clients—and congratulations if you do!—then it’s going to take you a little bit of time to find work. This is perfectly routine, but keep in mind that during this time, money won’t be coming in regularly.
So one of the most important things to do before starting as a freelancer is to make sure your finances are in order. How are you going to support yourself until you’ve got steady work? Start with a list of your monthly expenses: rent, bills, car payments, food, etc. Knowing how much you spend and what you spend it on can help you make sound choices when it comes to budgeting.
Pick a timeline that you’re comfortable with—most people say at least 90 days, but it can be longer—and begin setting aside money until you’ve reached the amount it will take to meet your expenses for that period. This is the amount that will tide you over until you start finding work.
2. Create a Website
A professional website is absolutely essential for freelancers. Your website tells potential clients everything they need to know about you: how to contact you, your prices, your relevant experience. For those in creative verticals—graphic designers, artists, writers—your website is your portfolio.
Highlight the work you’re most proud of: the projects with which you’ve had the most success, an eclectic variety that shows the range of your work. It’s essential that you have a sense of your work, and your website greatly improves your chances of attracting clients.
There are a plethora of hosting and web design services out there. This freelancer uses Squarespace. Your website can be simple and straightforward, depending on your level of comfort with web development. Many of these hosts offer technical support services, and levels of pricing plans depending on your individual needs. Prices are reasonable, with a one time fee for your domain and an annual subscription to the service. Squarespace specifically has a personal plan for $12 per month, billed annually, or a business plan for $18 per month, billed the same way.
3. Stay Active on Networks and Job Boards
Your website is critical to your freelance strategy, but you also need to bring people there. For many freelancers, job boards and social networks are their bread and butter. Many networks, like Upwork, which is one of the largest, allow freelancers to create a profile that highlights their credentials, areas of expertise, prices, and a portfolio of previous work. (Note: For jobs completed through their platform, Upwork does collect a small fee from your rate for the project, but this is not uncommon.)
Companies who need freelance services search for freelancers who meet their needs and invite you to submit an application, or a “bid.” You can also search for jobs based on the kind of work you want to do. The more jobs you complete, the more easily you’ll show up in searches.
There are a slew of other networks—Fiverr, CloudPeeps, and others—for freelancers to find work. Leveraging LinkedIn and Facebook Groups is also a good idea. Staying active and maintaining a prominent presence on these sites is one of the surest ways to drum up clients.
Before making a freelance move, take some time to research the networks that suit you best and set up your profiles—at least a month before leaving your full time job.
4. Explore Your Options for Insurance
Navigating the complexities of health insurance is confusing even when choosing from plans your employer provides. But when you work for yourself, it can be even more frustrating. Finding an affordable healthcare plan isn’t easy. Competition among private insurers drives premiums through the roof, and government healthcare is also getting more expensive.
There are so many factors to consider when enrolling in insurance. Individual or family plans? Do your current providers accept your new insurance? Everybody’s circumstances are different, but one thing we all have in common is: everybody needs insurance. Take the time to do your research and find the plan that fits you best.
Speaking of joining freelancing networks, the Freelancer’s Union is an excellent source of information and offers a variety of resources to help get you set up. Visit their insurance section to learn more.
5. Plan Ahead for Taxes
Taxes: one of only two inevitabilities in life. Like insurance, taxes are confusing and very difficult to navigate. Getting your taxes properly in order is one of the most overlooked aspects of freelancing, but it is also one of the most important. Unless your client has you fill out a W-4 to have taxes automatically withheld (this is more common with longer engagements and certain contractual structures), you will receive your full gross income, without taxes withheld. These are taxes you’ll be responsible for come April 15.
The Freelancer’s Union has some great advice on which tax forms to use (for freelancers, this is most commonly Form 1099) and how to make sure you’re filing taxes properly. Generally speaking, if taxes are not being withheld from your paychecks, it’s best to set up a new savings account and calculate roughly how much you need to withhold per check. Doing that monthly can help ensure you’re covered for tax season.
Freelancing is as exciting as it is challenging. As someone who is self employed, you will have to take on greater responsibilities in structuring your freedom. Knowing ahead of time what you need to do can help make the transition as seamless as possible.
For the person who loves to work, but wants to do it on their own time and from their own place - even the beach if they so choose, freelancing is a perfect option. Since the economic collapse of 2008, I’ve had a successful run in the freelance market, whether I had a full-time job or not.
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