Freelancing opportunities are on the rise. In 2023, it’s estimated that 64 million people freelance in the US alone are already reaping the rewards of freelancing. Setting their own hours, pursuing passions, and enjoying the flexibility to live life on their terms.
But where do you start? If you’re itching to know how to start your freelance business and transcend the confines of a 9-to-5 job, then, this article is for you.
In this quick guide on how to start your freelance business, we’ll cover everything from choosing your niche to developing a pricing strategy, finding new clients, and marketing your small business.
Let’s get started.
What Is a Freelance Business?
Before we explain how to start your freelance business, let’s understand the concept. A freelance business is a self-employment venture where an individual provides specialized services to clients on a project-by-project basis.
Unlike employees, freelancers aren’t tied to a single company. This means they have the freedom to work on various projects for different clients at the same time unless they’ve signed an exclusive contract.
Nonetheless, you need to keep in mind that freelancing full-time can be risky. That’s why many freelancers start freelancing as a side hustle to generate some additional income. In fact, in the beginning, it’ll be difficult for you to keep up with your performance and productivity at the office.
You’ll have to push your limits, figure out different ways to improve productivity and try new things. But when you’re migrating your income stream from a job to self-employment, it’s worth the extra hours in the beginning.
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Why Start a Freelance Business?
Why dip your toes into the freelance waters? Well, the tide is definitely rising. We’re talking about a projected growth rate that would make most industries green with envy: 15.3% year-on-year until 2027.
More companies are realizing the value of bringing in specialized talent for specific projects. They’re looking for experts who can hit the ground running, deliver results, and bring fresh perspectives.
What’s more, an astounding 68% say they’re happier working for themselves than they ever were in traditional jobs. So, if you’ve been standing on the shore and are thinking about how to start your freelance business, here are four advantages that come with being your own boss.
1. Flexibility
Starting your freelance business means you’re the captain of your own ship when it comes to time. You can structure your workday around what suits you best. However, you’ve got to stay on top of your workload and deliver quality work, even if you’re working in your pajamas.
2. More Freedom
Another perk of starting your freelance business is the freedom it offers. You’re your own boss, deciding who to work with and what projects to take on. If a job doesn’t sound right, you can politely say no.
3. Self-Management
As an independent contractor, you call the shots on everything from your workload to what you wear (or don’t wear). But don’t be fooled — the workload can be a rollercoaster. Some weeks you’re busier than a one-armed paper hanger, while others are slow. It’s up to you to balance it all out.
4. Earning Control
Once you start your freelance business, you get complete control of how much money you make online. You decide how much you’re worth. Want to earn more? Take on more clients or charge higher rates.
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How to Start Your Freelance Business in 11 Steps
Before you start your freelance business, you need to have a clear understanding of your goals and business niche.
This step-by-step guide on how to start your freelance business will help you understand a foolproof process of starting a sccessful freelance business.
1. Create Your Goals
With freelancing as your primary source of income, you’ll have to be very clear about your short as well as long-term goals. Without these clearly defined objectives, it will be difficult for you to create your roadmap to reach those goals.
The reason why many individuals fail as freelancers is because they don’t introspect about their goal behind becoming a freelancer.
Consider answering the following questions to define goals for your own freelance business:
- Is full-time freelancing what you’ll be doing in the future?
- Why did you choose to quit your job and become a full-time freelancer?
- Is freelancing just a stepping stone for you through which you want to achieve an entirely different goal?
Try to answer these and several other similar questions to identify your goals. Note down your short-term as well as long-term goals.
Based on your goals, you can create a roadmap and backup strategy.
For example, if your goal is to live as a full-time freelancer and travel the world, ask yourself how you will retain your clients?
What if a couple of your clients stop giving you work? How will you manage your finances? Is your full-time freelance income enough to pay your travel bills?
The point isn’t that it’s not possible; it’s to state that you need to be very careful when you leave your day job and jump on a freelancing career.
If you haven’t already quit your job, work on your personal finances. For example, unless you have started to earn at least 75% of your salaried job income via freelancing, don’t even think about quitting your job.
Create a realistic plan of how many of your clients you’ll be able to retain for a more extended period and determine how many new clients you can add to your freelance business.
Calculate the financials and potential earnings from these clients to get a rough idea of how much you will earn in the future.
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2. Identify and Improve Your Skills
First things first, every freelancer should identify the skills that can help them get clients and start a freelancing business. You can be a writer, a virtual assistant, a data analyst, a photographer, or a graphic designer.
However, writing articles and designing graphics may not be enough to start your own freelance business. You will also need networking and marketing skills to build relationships and find short-term and long-term projects. These skills are likely to help you increase and better manage your freelancing income.
You should also learn how to use common software related to your field such as Google Docs, Adobe Photoshop, Microsoft PowerPoint, etc.
3. Decide On the Services You Want to Offer
Most freelancers choose to start freelancing with skills from their previous jobs or with their hobbies and self-taught skills. You can do the same.
You need to narrow down your list of skills by prioritizing the skills you want to get paid for. Find out if there is enough market demand for relevant freelance services. Otherwise, choose to capitalize on another skill to start your freelance business.
The best way forward is to start with the skills that you’re already good at. If your employer is/was willing to pay you for the work you do using your particular skills, your clients will as well.
For example, let’s say that you’re a graphic designer and you’ve built your skills on Adobe Suite, including Photoshop and Illustrator. If you look around, you’ll clearly see a lot of competitors in the graphic designing niche who are willing to work at much lower rates than you.
Figure out how you can compete with them. Or do you really need to compete with freelancers that charge lower rates?
We’ll discuss this in the latter part of this post. For now, you need to understand that if you think it’ll be tough to compete with other graphic designers, you can choose other niches like UI/UX designing, book design, etc. You get the gist.
Hence, define the services you are going to offer as a freelancer. Some of the possible options include:
- Website design services
- Content writing services
- Social media management services
- Guest posting services
- Graphic design services
- UI/UX design services
- Product photography services
- Software development services
- Front-end designing services
- SEO Consultant
Look through freelancing networks like Upwork and Fiverr to see what type of services other freelancers are offering in your field of work and how they are pricing their services. While some freelancers get paid per hour, others choose to price their services on a per project basis.
However, we don’t suggest you rely on platforms like Upwork and Fiverr for full-time freelancing.
Why?
We’ll discuss this in the next pointer.
Are you concerned about being adequately paid for the job you do? You’re not alone.
It’s important to research market trends and evaluate how to price your freelancing services effectively. You can also consider giving free samples to your first clients to build trust. Once you’ve got a solid portfolio, there will be no need to do sample projects for free.
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4. Find New Clients
Finding your first few clients is often the most difficult part. As you’re just starting your freelance business, it’s okay to take the shotgun approach to find the first few clients. You will need to work hard for it.
You can consider looking for potential clients in the people you know – people you went to college with, office colleagues, LinkedIn network, etc.
The best approach is to create your clients’ personas and try to find them based on them. When you start working with some clients for freelance jobs, try to figure out whether they’re among the best client profiles you can have. If yes, find more clients like them and if not, keep hunting for better clients.
To determine the ideal client type for your freelance business, ask yourself the following questions:
- What business types will find my services useful?
- Which of them can afford the pricing structure I use for my services?
- Who are the decision-makers at these organizations?
- How do I reach them?
- How can I learn about my target clients’ demographics and interests?
- How can I connect with them on a personal level?
Narrowing down the client profile seems like a ridiculous decision when you start because you’ll be turning away a lot of potential business.
However, in the long run, narrowing your client profiles to only those that you work best with will polish your skills as you’ll be spending more time in a niche. These clients might also start advocating for you in case you need more work.
41% of freelancers depend on their previous clients and networks when looking for work. Some other popular channels that can help you attract potential clients include recruitment firms, online job boards, social media, and gig economy sites/apps.
Although it’s not the best option, you should register yourself as a freelancer on popular sites like Freelancer.com, Upwork, and Fiverr, and build a portfolio to attract more clients. If you deliver great work and acquire good ratings, it can help you attract more potential clients to your freelancing profiles on these platforms.
The reason why we don’t advocate sites like Upwork, Fiverr, and Freelancer is that they already have countless freelancers onboard. Freelancers who have been working on these platforms for a long time have a head-start and already have ratings and reviews.
When you start on these established platforms as a new freelancer, you’ll be faced with stiff competition from these established freelancers. Additionally, these freelance platforms have a lot of freelancers working at a very low price, so you might have to cut yours too.
What we suggest is to keep an open eye for new platforms and register there before they get popular.
Still, if a job board is your preferred choice, you can go with these. However, most of your time hunting for new clients should be spent within your network instead of freelancing platforms.
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5. Set Prices for Your Freelance Work
The next step in this how to start your freelance business checklist is to fix the right pricing package. Of course, you can Google what other freelancers charge for similar services when starting your freelance business. However, the real question is, should you charge the same as the others?
Let’s discuss this.
Verdict first, the best pricing strategy for your own freelance business is to price your services based on the value you deliver, not based on your competitors’ rates.
One mistake many freelancers make is to agree to the prices that their clients offer. You should never let your clients dictate the terms by which you evaluate your work.
This is absolutely the reason why you became a freelancer — you wanted to work on your own terms.
Of course, you’ll have to accommodate your client’s requests. But the price/rate for your services should be comfortable for you. It should be adequate for the value you deliver to the client.
For most businesses (primarily big clients), skills are a matter of concern. If you can show them that you’re the right person to help them with their work, they’ll be more likely to hire you.
Price is a secondary concern. Even if many of your prospects don’t partner with you just because of your high prices, don’t offer lower prices; unless no one wants to work with you at the given rate.
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6. Create a Relevant Portfolio and Show it on Your Website
Do you really need to have a website in order to start your own freelance business? Well, not necessarily, but it’s better if you have one. With your portfolio showcased on your website, your prospective clients will get a good first impression.
Online presence is a must for all businesses, and freelancing isn’t an exception. Think of a situation where you want your clients to review your freelance services.
Where would you showcase that fantastic review?
When you start a website, you can easily show what your clients say about your freelancing business.
Having a website for your freelance business can help you get clients organically too. You can use SEO, content marketing, and paid marketing techniques to obtain more website visitors. Some of them could be potential clients.
The cherry on the top? You don’t need a web designer to build you a website. With CMS like WordPress and Wix, it’s easier than ever to start building a website for your freelancing business.
With your services and portfolio showcased well on your website, your clients can learn about the type of work you deliver and the previous clients you’ve worked with.
However, you need to clearly define your services in detail. Couple the description with some examples of relevant work you’ve done in the past.
Beyond this, try to promote your services to your clients. Make them understand why they should pick you over the rest. Here, your portfolio section plays a significant role.
Here’s how you can create an awesome portfolio section for your freelancing services:
- List down your expertise and show some work samples
- Highlight relevant skills for each service type
- If possible, try to relate your education, certifications, and accomplishments to your services
- Request testimonials from your clients and show them on your homepage
- Keep updating your website with new content
- If possible, try to post a couple of blogs every month related to your niche. This shows your expertise in the area you work
Another strategy is to look for other freelancers in your niche and try to learn from them. Visit their websites and take inspiration from them.
Try to understand how they’re positioning themselves, what value proposition they’re highlighting, and most importantly, what type of clients they have had in the past. You can use this information to inform your website development.
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7. Choose Your First Client Carefully
Now that you know how to start your freelance business, let’s move on to the next phase. Being a freelancer, you will have to invest some time into finding new clients. Starting your freelance business means you’ll be taking care of lead generation, conversion, requirement gathering, and execution.
Also, it’s difficult to find new clients when you start your own freelance business. The reason is you don’t have enough credibility.
Additionally, you won’t be used to catering to multiple clients at once, which could lead to a few unhappy clients and bad reviews. You don’t want that.
So, make sure you put good effort into finding your first client and make sure you satisfy all their requirements well. And, of course, try to think whether the client fits your goals and objectives behind your freelance career.
8. Learn to Pitch Your Services to Your Prospects
As mentioned earlier, if you’re starting your freelance business, you’ll have to be dextrous in several areas of operations which includes sales.
You have the expertise to provide services, but none of it matters if you can’t sell them. Hence, you need to be able to communicate your strengths and expertise to your prospects with the intention of converting them into your clients.
If you wonder how you can create proposals for your own freelance business, here are the basics:
- Craft an elevator pitch email that provides immense value to your clients
- Personalize the pitch by including your prospect’s specific needs
- Include what services you can offer to the prospect and try to sell your strengths
- Create a slideshow where you can include your service line, portfolios, and testimonials
- Mention your website in the elevator pitch
- Share the relevant work samples to give your prospects an idea of your work
You can reach out to your prospects via email, phone, or even personally. If you’re working remotely as a freelancer, email and messaging would perhaps be the best way forward.
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9. Register Your Freelance Business Legally
Wondering if it is too early to register your freelance business as a legal entity? Well, if you’re making enough money to pay the state filing fees and annual reporting fees, it’s high time to turn your side hustle into a legally-authorized freelance business.
Here’s what you need to start a freelance business as a legal entity:
- Choose a unique name for your freelance business.
- Select an entity type. The most appropriate choice for registering a freelance business is a Limited Liability Company (LLC) as it is easy to form and also provides personal liability protection.
- File your LLC with the Secretary of the State and pay the state filing fee.
- Get an Employer Identification Number EIN/Tax ID from the Internal Revenue Service department. You’ll need this nine-digit number to open a business bank account to separate your freelance business expenses and income from your personal finances. This will also be needed for paying business taxes.
If starting your freelance business LLC sounds overwhelming, you can have us do it for you. Just fill out one, simplified application and we’ll complete both the state and federal filing processes for you.
10. Promote Your Freelance Business and Start Making Money
Once you’ve learnt how to start your freelance business, start freelancing right away. Don’t forget to promote your freelance business on social media, in your professional networks, on freelance job boards, and so on.
As discussed earlier, if you have the time and budget, you should also create a website for your own freelance business entity. A well-designed website can help you display your freelancing portfolio, attract potential clients, and grow your online presence.
11. Cultivate a Strong Freelance Network
Connecting with other freelancers is easier than ever thanks to platforms like LinkedIn and Facebook groups. While it might seem counterintuitive, building relationships with your potential competitors can actually be a smart move.
Let’s say you’ve got a massive project on your plate. Needing an extra pair of hands? Or maybe you land a dream job but your schedule’s packed. Helping someone else out can be a real game-changer. You scratch their back, they scratch yours.
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Should You Start Your Own Freelance Business While Working Full-Time?
Almost every corporate employee has thought of starting their own freelance business while working full-time. In fact, it’s the first step for every individual who tries to pursue a full-time freelance career.
Let’s discuss why it’s essential for individuals to start their own freelance businesses while they’re working and how you can get started.
Test Out Self-Employment Without Stress
Before you quit your full-time job and start freelancing, you need to ensure a steady income from your own clients.
Hence, it’s crucial for every individual who wants to pursue a full-time freelancer dream to work on their own freelance projects simultaneously with their job.
Starting your own freelance business while you’ve got a full-time job is a stress-free approach to freelancing. Although you’ll have to work extra hours, it’s worth the extra money.
But is it unethical to start working on your own freelance business while working elsewhere as an employee?
The short answer is no, as long as you’re fulfilling all your day job duties, it’s not unethical. However, if your employment contract states that you shouldn’t freelance, it’s best to avoid doing it.
However, most US employers don’t have such clauses in their employment agreements.
Build Your Skills
The most significant benefit of starting your freelance business while working full-time is that it motivates you to learn faster.
In order to start and grow your own freelance business, you’ll be working hard to improve your skill set right from the start. And this will positively affect your day job as well if you’re freelancing for the same skills.
By freelancing, you’ll be getting paid to improve your skills.
For example, if you’ve started your own freelance business for content writing, you’ll be dealing with dozens of different clients from different niches. This will allow you to start learning diverse information.
Moreover, you’ll be working with several digital marketing teams and will be part of their strategy. Every digital marketing team has a different strategy, and you’ll get exposure to all of them.
This will positively affect your day job significantly as you would have learned a lot about content writing and digital marketing after office hours.
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Create Your Own Brand
You create your personal brand when you start a freelance business. On the other hand, while working with your employer, you’re just a part of the system.
When you start your own freelance business, you’ll be tying your name to your work, which is the best way to create your personal brand.
Additionally, to promote your freelance business online, you should start by building your online presence as well. This would further help in your personal branding.
Develop Valuable Connections
Your freelancing business is an opportunity for you to start developing valuable connections. While not everyone is your client, they possibly can refer you to an ideal client.
However, one mistake freelancers make when they start is to build bigger networks of people. If you want awesome clients, don’t build unnecessarily big networks. Instead, start to build deeper connections with people.
Discover Your Passion
When you’re spending almost all of your time with your money-making skill sets, you’ll easily understand which part of your job you’re passionate about. If you find it difficult to choose from your skillset, here’s how you can discover your passion:
- Determine your soft skills
- Break down your most successful project
- Identify the skills associated with that particular project
- Figure out what comes naturally to you
- Welcome others’ opinions on your strengths
- Identify your hard skills
- Find out what is it that you love to do
If you wonder how your passion relates to starting your freelance business, ask yourself, would you be working on something you don’t like for 14 hours a day and 7 days a week?
Obviously not.
On the contrary, moving forward with the skills you’re passionate about keeps you away from anxiety and work fatigue.
Learn Self-Discipline
There are no excuses or short-notice leaves after you start your own freelance business. You’ll have to show fierce dedication to delivering quality work on time.
Procrastination might have worked with your day job, but when you start your own freelance business, there’s no room for it.
When it comes to freelance projects, you can’t come up short. Otherwise, it’ll be considered that you failed to deliver.
However, if there are valid reasons behind the halt, your clients might understand this. Still, one thing you shouldn’t compromise on is to establish clear communication with your clients.
Let them know about the breaks along with the reason in a timely manner. This will help you establish cooperation between you and your client.
If you just started your freelance business, start creating daily deadlines for yourself to meet weekly goals.
When you’re starting your freelance business along with your job, your daily working hours will extend to 14-16 hours a day. So be prepared for that.
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FAQs
1. How do I start my own freelance business?
To start your own freelance business, you need to:
- Create your goals
- Identify and improve your skills
- Decide on the services you want to offer
- Find new clients
- Set the prices for your freelance work
- Create a relevant portfolio and show it on your own website
- Choose your first client carefully
- Learn to pitch your freelance services to your prospects
- Register your freelance business legally
- Promote your freelance business and start making money
2. What should a beginner freelancer charge per hour at starting their own business?
When you start freelancing, you can charge as low as $5-$10 per hour as a beginner. With experience and improved skills, you can increase the price of your freelance services.
The best pricing strategy for your freelance business is to price your services based on the value you deliver, not based on your competitors’ rates.
One mistake many freelancers make is to agree to the prices that their clients offer. You should never let your clients dictate the terms by which you evaluate your work.
The price for your services should be comfortable for you. It should be equivalent to the value you deliver to the client.
However, how you price your freelance projects and services will also depend on the amount of work required (project deliverables) and the urgency of that work.
3. How can I start a freelance business with no experience?
To start a freelance business with no experience, you should leverage the skills from your previous jobs. If your employer is/was willing to pay you for the work you do using your skills, your clients will do as well.
For example, let’s say that you’re a web designer and you’ve built your skills on CMS and coding languages. This is the skill that you can monetize when you start your freelance business. All you need to do is start finding clients who require your services.
Tap into your existing network to find clients and business owners who might need your services. Do word-of-mouth marketing to get new projects and start freelancing.
4. How much should I charge as a freelancer?
On average, freelancers charge $10-$30 per hour depending on their industry and experience. Freelancers who work as project managers demand the highest pay while freelancers in administrative roles charge the least.
5. Should I start an LLC as a freelancer?
Yes, you should start an LLC as a freelancer to separate your freelance business finances from personal finances. LLCs provide personal liability protection, make you look more professional to clients, and help you get deductions on business taxes.
Here’s everything you need to know about forming an LLC as a freelancer.
6. Should I start my own freelance business along with my existing job?
As long as you’re fulfilling all your day job duties, you’re good to start your own freelance business. That said, make sure that your employer doesn’t have any issues with it. If your employment agreement has a clause that prohibits you from doing freelancing, it’s best to not have a freelance business.
7. How to determine the ideal client types for my freelance business?
To determine the ideal client type for your freelance business, start by asking yourself the following questions:
- What business types will find my services useful?
- To which business operations can I be helpful?
- Which of them can afford the prices I charge for my services?
- Who are the decision-makers at these organizations?
- How can I learn about my target clients’ demographics and interests?
- How can I connect with them on a personal level?
8. How to create sales proposals for my freelance business?
Here’s how you can create proposals for your freelance business:
- Craft an elevator pitch email that provides immense value to your clients.
- Personalize the pitch by including your prospect’s specific needs.
- Include what services you can offer to the prospect and try to sell your strengths.
- Create a slideshow where you can include your service line, portfolios, and testimonials.
- Mention your website in the elevator pitch.
- Share relevant work samples as the prospect will see them to determine if they’d like to hire you.
Ready to Start a Freelance Business?
Starting a freelance business isn’t easy by any means, especially if you’re doing a full-time job alongside it. You will need to toil and work long hours to succeed. However, it’s a great way to hone your skills and grow as a professional.
Start freelancing, build a portfolio of clients, make money, and then take your freelance business to the next level by establishing it as a legal entity.
Do you need help starting your own freelance business? Reach out to our business formation experts to establish your new freelance business as a legal entity.