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Freelancing is working independently for multiple clients rather than being an employee at a particular company.
Freelancing is working independently for multiple clients rather than being an employee at a particular company. Such work may include both short-term projects and long-term cooperation for one month and more. Freelancers' area of expertise is extremely varied and includes many types of skills, including writing, designing, developing software and apps, marketing and virtual assistance, united by the fact that all of them are provided through a contract rather than hiring. The advantages of freelancing are freedom to choose a schedule and clients, while the responsibilities include searching for work and managing taxes.
The simplest way to become a freelancer is to use a skill acquired from experience, hobby or university studies. Since clients prefer to pay for proven skills rather than for possible ones, it is better to focus on concrete and tangible skills, like designing, writing, video editing or programming, which will allow to demonstrate results to potential clients. For freelancers with no prior experience, choosing one skill is usually more effective than selling five loosely related services.
All the newcomers in the field of freelancing face the same challenge, which is the need to show previous work to the potential client, despite having no clients. Freelancers complete projects on their own initiative, create something for friends or nearby businesses and even complete their personal projects with the purpose of showing their skills. A few good samples of work will turn out to be much more useful than a lot of vague ones.
There are three main methods of charging money for freelance services, which are charging per hour, per project or based on the added value to the client. Each method is suitable for certain type of freelance work. Charging by the hour is straightforward but demotivating because the quicker one completes his work, the less he gets paid. Flat project rate charges require a lot of time for accurate estimation of the scope of work, which many people do not have initially. Many freelancers start charging by the hour and transition to another system when they master the craft of estimating time needed to complete their work.
Freelance platforms that include ready-to-use service listings and job postings, such as general-purpose freelance platforms, are good for freelance beginners because of the fast connection with the buyer side. The disadvantages are that there is a lot of competition on the platform, because all the freelancers are trying to catch the attention of buyers and the platform receives some part of the payment from all jobs posted on it. They usually provide more opportunities for those, who have just started working as a freelancer.
Retainer is an agreement that states the client should pay the freelancer a fixed amount of money per month for completing a certain scope of work. It is one of the most important things that can be achieved by a freelancer because of the absence of the need to search for the next project to complete. Usually retainers appear from the clients, who liked the results of the work completed by the freelancer on one project.
Some freelancers create ready-to-use packages of services, such as logo packages or website audit, which are much easier for the clients to agree with than the open-ended price. The other freelancers create something they can sell apart from working with clients, which can be presets, templates or even a short online course on the subject. Such services take much time to create, but can bring income aside from the income received for completing the client's work.
Word of mouth is one of the most successful ways of finding new clients because referrals come to a freelancer with the built-in trust. All one needs is to ask the satisfied client if they know someone who can benefit from the help of a freelancer at the very moment when they are still happy with the results of the work. There are also freelancers who create referral programs and earn money on affiliate links to some of the services they use.
Personal communication with a potential client is one of the most effective ways of getting high-paying clients since this approach avoids price competition that happens on the marketplaces. The disadvantage is that the process takes much time and requires tolerance of rejection since one is looking for clients rather than waiting for them. The simple habit, which consists of sending emails to several well-matched people each week, turns out to be much more effective than sending emails to many people every time one has no work to do.
It is better to have a short agreement with the client that includes the scope of work, price, deadlines and the possibility of revisions. Asking for a deposit for completing big projects and spreading payments for long-term work helps to receive payment regularly and avoid a situation in which the client owes much money. Creating clear invoices for each project helps to receive payment quicker.
Freelance income is not taxed like the employee's income, so it is necessary to save part of each payment for the future tax obligations. It is better to track expenses and income from the very beginning and use a separate account for keeping them. Depending on the location, it is worth to know whether one should register as a business owner after reaching a certain income level.
Scope creep is one of the most frequent reasons of the appearance of a negative attitude towards the clients that freelancers would like to cooperate with. Another frequent mistake is working with any clients just in order to earn money and even taking free trial projects in hopes of getting paid later on. All these problems are caused by unclear agreements at the start of each project.
Freelance income varies depending on the time period, so saving money for slow periods becomes very important. Depending on one platform or one client for receiving income leads to the danger of losing a source of earning and it is better to have many sources for finding projects. Protection of the time off and setting boundaries for being available become the difference between the freelancers who work for many years and those who quit after the first year.