The Advantages and Perks of Being a Freelancer
Tips for Becoming a Successful Freelancer
Maybe you've dreamed of going out on your own for years—no more saluting that boss or supervisor or working hours that someone else decides for you. But the idea of starting your own business is...well, terrifying. You don't see yourself as a CEO. You just want to earn income on your own terms.
Freelancing might be the answer. Approximately 55 million Americans were freelancing in 2016—about 35 percent of the workforce.
What do these people know that you don't?
What Exactly Is Freelancing?
A freelancer is a self-employed person who offers services, usually to businesses and often to multiple clients at a time. Nearly every type of service needed by most businesses could be provided by a freelancer, including marketing, publicity, advertising, technological support such as web programming and design, creative works such as graphic design, and financial support such as bookkeeping.
Ask yourself what you're good at. What is it that you do better than just about anyone else? In what areas do you excel? Can businesses use your skills?
The Advantages of Freelancing
Freelancing can be a fast and affordable way to get started working as your own boss, often from the comfort of home. But there are both pros and cons.
Set your own hours. Freelancing is flexible. You can often work full- or part-time on projects of your choice.
You're an independent contractor. Although clients can—and usually will—set specifications for the work they want done, a freelancer is still an independent contractor, not an employee. You'd be free to control how the work is completed. Your client might tell you that he wants a website with flower designs.
Where you put the flowers is up to you and your immeasurable creativity.
Get paid what you're worth. Freelancing allows you to set your own price for your services, which is often higher than what you'd make as an employee doing the same work. Make sure you charge enough to cover your overhead and to compensate you fairly for the time it will take you to do the work.
It's often affordable. If you have the ability to provide a certain service, you most likely also already have the equipment or software you need to deliver it. You shouldn't face steep startup costs.
There's a high demand for help. Although the freelance marketplace is competitive, the need for quality, reliable freelancers is growing. Many businesses don't have employees these days. They rely upon a team of freelancers instead.
You can pick and choose your clients. You'll probably want to take on any client who will hire you when you're starting out, but you also have the option not to take on difficult clients, especially as you grow. You can even fire them.
You might pay less in taxes. The IRS treats employees and independent contractors quite differently. Thanks to recent tax law changes, employees can no longer deduct unreimbursed work-related expenses—but independent contractors can.
You can deduct business expenses from your earnings on IRS Schedule C to reduce your taxable income.
The Disadvantages of Freelancing
Where there's a good side, there's usually a bad side as well. Freelancing isn't perfect for everyone, and not everyone is suited to it.
Your clients have schedules, too. Yes, you can set your own hours for the most part, but if a client can only see you at dawn on Tuesday, you'll want to get up with the crows.
The work isn't always consistent. This is particularly the case if you're offering one-and-done services, like creating a certain product. You turn the finished product over to your client, and that's the end of it—you have to find a new client who wants your product so you can make create another one and be paid for it. But many freelancers work for the same set of clients over extended periods of time.
A freelance writer might have a client that requires an article twice a week on an ongoing basis.
You probably won't be super-successful overnight. Getting enough clients to support yourself and your family through freelancing can take a while, and many freelancers experience an ebb and flow in their work. You'll have to plan for lean times and be ready to work hard to deliver work on time when work is plentiful. Breaking in with lower costs might be necessary, but find clients willing to pay for quality as quickly as possible.
Managing multiple clients and projects can be a challenge. Although some people like the variety of working on several projects at once, others might find it difficult to keep track of deadlines. You have to pace yourself to produce and deliver quality work on time. Great time management systems and organization are key.
You'll have to pay for your own benefits. You'll lose out on perks like employer-sponsored healthcare and retirement plans.
You'll have to pay self-employment tax. This is the flip side of paying taxes on less income. When you work for someone else, your employer pays half your Medicare and Social Security taxes, but now you effectively are your employer. You'll have to pay both halves. This is commonly referred to as the self-employment tax.
How to Get Started
Getting started as a freelancer can be as easy as visiting one of the freelance sites to find work and networking within your current sphere of influence to find your first client. Consider using a freelance site, such as Freelancer.com or Upwork to find work. They might pay less than you want, but this can be a great way to get your name out there and to get testimonials and referrals.
Determine your target market. Who needs what you have to offer? This is the time to decide your brand and your unique selling proposition.
Create an online portfolio. Build a profile that promotes what you have to offer. Eventually, you'll want to invest in business-building tools, such as a website that can offer you more customization and flexibility, but LinkedIn is free and it's a great online resume that can help you promote your service. You might also consider Portfoliobox, SquareSpace, and Journo Porfolio.