Chapters

The art of freelancing

Hectic’s guide to starting and growing your freelancing career

Chapter 1

Setting up your freelance business

Deciding to freelance is a major life event. Once you’re committed, it can be tempting to dive in head-first with the hope that you’ll learn to float fast enough to avoid drowning. Depending on your work, finding your first job can be as easy as signing up for a client-finding platform. If you wanted, you could even find your first job today, maybe even in less time than it takes to read this guide.

You could, but our advice is that you really shouldn’t.

<tweet-link>Freelancing isn’t just about finding clients and making money. It’s about managing multiple different roles, including business owner, accountant, sales rep, marketer, manager, visionary leader, and more.<tweet-link> To do all that while also killing it at your craft, you have to set yourself up for success.

That starts with your freelance business — because, operating as an LLC or as yourself, you are creating a business. Though some of the information included in this chapter may seem unnecessary, keep this fact in mind. Taking care of these things in advance will limit your stress down the road and help you stay on top of all of your demands. After all, as the adage says, “Failing to prepare is preparing to fail.”

To operate a business or not to operate a business

One of the very first steps to running a successful freelance business is deciding if you want to start a business or operate as a sole proprietorship. There’s no right path, just different options. 

First, let’s start with the basics.

Operating as a sole proprietorship

If you are doing business or plan to do business under your own name, you will be operating as a sole proprietorship. Though this is technically a business entity, it doesn’t require any additional paperwork and all of your assets belong to you rather than a business.

You will still use W9 and 1099-MISC forms and pay taxes as if you were a small business, but you won’t need to pay any filing or registration fees to maintain a business license. Many freelancers go this route because of the simplicity.

One of the biggest drawbacks to operating a sole proprietorship is your legal liability. If one of your clients decides to sue you, you will be fully liable for any damages they win. While this isn’t a common occurrence, it is a possibility.

Owning a freelance business

Operating your own business does cost more upfront than operating as a sole proprietorship, but it offers many advantages to freelancers, including:

  • The ability to hire employees if you want to expand
  • Additional tax deductions and credits
  • Eligibility for worker’s compensation insurance
  • The option to operate under a different name
  • Access to more certifications and licenses

As a solopreneur, you will choose from multiple business entities when creating your business.

Partnership

  • Formed when two or more people own and operate the business
  • No paperwork or licenses are necessary
  • Taxes are paid by the individuals, not the company
  • No liability protection

Limited Liability Company (LLC)

  • Most common choice for freelance businesses
  • Requires paperwork to form, as well as an annual filing fee paid to the state
  • Protects owner from liability
  • Increased tax flexibility
  • Can own property, borrow funds, and more
  • Can be owned by one or more people

Corporation

  • Same benefits as an LLC
  • Ideal for those wanting to attract investors
  • Most expensive business entity

While LLCs are the most popular choice, it might not be the best option for you. Just be sure to do your research to see what your state requires and which entity will benefit you most.

Find the tools you need

If you’re going out on your own, you won’t have access to the same resources you did at your job or school. Doing your best work for your clients means equipping yourself to start strong from your very first day. You should have access to:

  • Tools you need to do your work - software, hardware, knowledge, reliable internet, etc.
  • Tools you need to find and connect with clients - platform memberships, email, marketing tools, professional website, etc.
  • Tools you need to run your business - invoicing, time tracking, scheduling, contract-building, and more — all available on Hectic.

We’ll go over these tools and why they’re essential in more detail later.

Prepare your marketing kit

Why should clients hire you? <tweet-link>Whether you have decades of experience or you’re just starting out, you need to know what you can offer to your clients — if you don’t know, we can promise they won’t feel much of a need to hire you either.<tweet-link>

For some, this means refreshing your resume and cover letter. Even if you won’t use one, it’s helpful to keep track of the experience you have and jobs you’ve held up to this point.

If you’re joining a client-finding platform, write a killer bio. Make sure you focus on your client needs rather than ‘I statements’ to stand out and show that you’re the best choice. You can also use this bio to update your LinkedIn profile, as well as any other accounts you’ll use to do business.

To put it bluntly, clients don’t care as much about you as they do the benefits you can provide. When writing proposals, profiles, and messages, translate your skills into their solutions. Rather than saying “I take beautiful photos that clients love,” for example, say “My photos capture and communicate emotion, transforming a moment of time into a lasting experience.” Clients who hire freelancers are focused on their problems, so you should be too.

Next, consider creating a professional website. By professional, we don’t mean you need to hire someone to build or design it. Your website can be simple, but it needs to communicate your professional legitimacy and quality. There are lots of free or low-cost website options available, so shop around to find the option you’re most happy with.

No matter your industry, you should also have a portfolio of your best and most relevant work. Samples are often the nudge you need to win a contract, so keep them on-hand and easily accessible.

Don’t have any prior experience or work to show? We’ll give you some easy ways to create samples in the next chapter.

Lastly, you need to determine your pricing before you bid for your first job. Remember, you need to make a living off of your work, so you need to make enough money to meet your financial responsibilities. This is typically one of hardest (and often longest) struggles for freelancers, so we’ll dive deeper in a later chapter.

Develop your business strategy

Even after all of this preparation, deciding how you’re going to start finding work can seem daunting. Give yourself a leg up by creating a plan before you’re ready to bid for your first job.

If you’re going to use a freelancing platform, do your research to learn how it works and the best ways to succeed on it. Watch tutorials, read blogs, take courses, and even connect with freelancers who already use it.

If you plan to build a client base through networking, determine how and where you will find potential work. You should also know and prepare your approach to turning these connections into jobs.

In our mid- and post-pandemic world, networking looks very different. Many typical networking opportunities have been suspended or changed to address health safety concerns. Having a targeted networking strategy is critical to building professional relationships in this new world.

Final thoughts on building your freelance business

Is this the only way to start a successful business? Of course not! You can follow some or none of these tips and succeed, but it might not be the easiest path. What we’ve learned is that it’s better to be prepared when making such a monumental life transition.