Freelancing software that helps you get paid faster.
6 Tips That Every New Freelancer Should Know
Are you making the plunge as a new freelancer? Leaving the day job behind to strike out on your own? Feeling ready to conquer the world as a solopreneur?
Hold on. It’s true, freelancing can be many things: exciting, challenging, adventurous—the list goes on. But no matter how you look at it, one thing’s for sure: freelancing is very different than working as an employee. And when you’re first starting out, some details are more obvious than others.
Fortunately, you don’t have to start from scratch. We’ve put together a short list of six top tips to help you make a smooth transition into freelancing.
1. Find Your First Clients From Inside Your Network
“Don’t try to get business from ‘strangers’ when you start out. It’s hard to sell yourself to people who don’t know you. Make it easier on yourself by asking people you know. It’s easier for them and for you, and it makes starting out less onerous.” Will H. / Twitter: @whawkins / Web: digi-business.co.uk
Finding work is all about who you know. According to the Harvard Business Review, freelancers still get the majority of their work through word of mouth, making it more valuable than marketplaces, agencies, or social media. People who know you personally will be much more likely to give you a shot. Plus, you’ll feel more secure working with someone you can trust.
When you’re just getting started, you won’t have the big portfolio and proven reputation of someone who’s been in the game for years. Tap into your network. Then, build your brand over time before branching out to find additional clients.
2. Plan For Non-Billable Hours
As a freelancer, you will have to build a schedule that accounts for both billable and non-billable hours.
Billable hours involve time spent on tasks related to specific assignments: research & planning, client review meetings, and content production. Non-billable hours include things like bookkeeping, email, invoicing, and marketing. Not to mention time spent hunting for new job opportunities.
This means you shouldn’t schedule eight billable hours per day. You’ll still have to fit in your non-billable time on top of that! It probably makes more sense to set aside 4-6 hours each day for billable client work, and 2-4 hours per day on non-billable activities.
3. Raise Your Rates
Whatever your hourly rate was as an employee, it’s time to double it as a freelancer. That may seem extreme, but you have to think of yourself as an employer instead of an employee. An employer provides a lot more than your base salary. They cover health insurance, PTO, office space, equipment, software, travel, taxes, and those hours that are now non-billable. That’s a lot to make up for.
Check out this great infographic from Creative Live that breaks down how to calculate your new rates. It may seem a bit scary, but remember that your time is valuable. Be prepared with competitive rates.
4. Save Money for Taxes and Retirement
“Always be saving! Your amazing gig can disappear instantly and without warning. Plus, you’ll probably owe the IRS during tax season. So make sure you’re always putting some away from every paycheck.”Grant P / Twitter: @grantpa / Web: grantpardee.contently.com
Once you start making some real money as a freelancer, expect to start paying quarterly taxes, rather than settling up once a year in April. Also, since you’re now your own employer, you’ll need to start paying self-employment taxes. So start saving a chunk of each paycheck so you are hit with a big surprise at tax time.
In a full-time gig, you may have employer matching on your 401(k) plan to help you save for retirement. As a freelancer, you’re all on your own. Do some research on the different types of retirement accounts for freelancers and choose the one that’s best for you. Then: start saving.
5. Choose An Accounting & Project Management System
You are now the project manager, the payroll team, and the administrative assistant. From project timelines and deadlines, to progress reports and updates, to estimates and invoices, you have to make sure everything gets done. You’ll save yourself buckets of time if you set up a consistent and reliable system with structure, reminders, and automation. Systems like Bonsai can help you to track your projects, contracts, hours, invoices and payments much more easily.
"Experiment as much as you can. Be open to new ideas and tips from other freelancers and blogs. Try out new tools and services that can help you create your perfect productivity ritual."Carrie Smith Nicholson / Twitter: @careful-cents / Web: www.carefulcents.com
6. Case Studies
“Publish case studies of your work showing in detail your skills and how you solve problems.” Pablo M. / Web: pablomassa.com
Your credentials, your resume, and your list of skills and abilities are never as impressive as one thing: results. By creating case studies, you can show people exactly how you tackled a project. How did you solve a client’s problems? How did you go above and beyond to create a measurable impact?
Ideally, include concrete statistics to show the amount of revenue you created or time you saved. Ask for quotes from your clients that speak to your abilities. Add images and excerpts of your work. Even if you’re not a designer or a writer, you can take screenshots of just about anything: a chart of click-through rates, a graph of increased readership, or original code you wrote that led to success.
These are just a few of the many things you’ll need to learn as you move into the world of freelancing, but don’t worry! Just plan ahead, and take these tips into consideration before you start. You’ll be ahead of the game from the beginning.
Start managing your freelance business with Bonsai today - sign up for our free trial.