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Ready to trade in that nine-to-five and become a full-time freelancer? Check out these tips from Credit One Bank.

Tips for Running a Freelance Business

These days, it seems like just about everyone has a side hustle. According to Side Hustle Nation, 45% of working Americans reported having one in 2022, which equates to roughly 70 million people.

Most definitions of “side hustle” include a qualifier stating it is in addition to a main job, or income above and beyond a primary source of income. Side hustles also frequently involve services people provide because they’re fulfilling a need and want to make some extra cash, not because it’s anything they feel passionate about or want to do full-time.

A freelancer, on the other hand, is often an individual who wants out of the nine-to-five world, embraces the independence of the freelance lifestyle, and wants to turn their freelancing skills into a full-time occupation. While it’s certainly possible to provide freelance services as a part-time side hustle, many freelancers have no intention of ever returning to a full-time corporate gig and are willing to do what it takes to be—and stay—their own boss.

If you fall into the latter category, here are a few tips to increase your odds of making it as a freelancer and help you avoid ever punching another clock.

1.     Sharpen your time- and money-management skills. When you’re out there working on your own, you don’t have a boss monitoring how you’re spending your time or how effective you are at your job. You are the one managing you, and you need to be harder on yourself than any boss you’ve ever had. While it’s fine to cut yourself some slack once in a while to take advantage of freelancer hours, you have to work smart because, unlike with many steady-paycheck corporate jobs, you’re not getting paid if you don’t deliver. If a client isn’t happy with your work, chances are they’re going to withhold payment until they are. Or, even worse, altogether.

Speaking of paychecks, because you’re not going to have one coming in every two weeks, you must become skilled at billing and collecting money owed to you, which means invoicing and following up politely to remind any clients who owe you money that you still haven’t been paid. You also need to get good at managing the money you have coming in, which means effectively budgeting to cover your business and personal expenses and figuring out how to make any money you are earning grow. There’s no company 401(k) or corporate matching as a freelancer, so you’ll have to be actively involved in putting your money to work for you.

2.     Understand that when you’re not working, you’re working on getting work. There are two kinds of freelancers: those who are busy working and making money and those who are not. This means when you’re not working on a paying gig, you need to devote your energy to finding your next one.  

If marketing isn’t your thing, figure out how to get better at it because, until you get to a point where you have a steady stable of clients or work strictly off referrals, you’re going to need to continually line up new gigs and clients. If you’re in a creative field, like writing or graphic design, where many of the clients you seek are marketing types, you’re going to want to be clever or unique in your self-promotion to break through the clutter to get their attention. It only makes sense that someone looking for a freelancer like you to market their goods or services wants to see proof of effective marketing of your own services.        

3.     Always, always, always exceed expectations. Nothing pleases a client more than having their expectations not only met but surpassed. If you please a client, they will be inclined to use you again, recommend you to someone else, write you a positive review or endorsement, or even offer you a full-time job with an offer that may even be good enough to convince you to walk away from freelancing.  

On the other hand, if you underwhelm a client even once, you risk losing them forever and potentially losing future clients to whom they might have recommended you.

There are several ways to exceed a client’s expectations, including but not limited to:

  • Delivering work that’s a higher quality, more extensive, or more creative than they asked for
  • Delivering work ahead of schedule
  • Delivering work that comes in under budget
  • Delivering work that combines any or all of the above

4.     Charge what you’re worth—or what the market will bear. When you’re first starting out, you want to be competitive to get jobs, so you may be inclined to undercharge for your services. You may do so hoping to gain experience and/or exposure, but undercharging can be a recipe for overworking and potential failure down the road.  

Do some research to see what others in your area offering similar services are charging. Understand that, as your experience and reputation grow, so too should the fee you charge for your services. You want to set your prices at or near what the market will bear to find your pricing sweet spot, which keeps you competitive and helps you maximize earnings. If clients are seeking you out and you’re turning work down because you’re so busy, then you may be able to raise your rates over and above the current market range, at which point you’ll have to test the waters. But this is a very good freelancing problem to have.

5.     Referrals, Referrals, Referrals! Referrals are the best and purest form of marketing any freelancer can have. Say that you’re a wedding photographer and there are two or three future brides attending the wedding you’re shooting. Well, chances are those future brides may ask the present bride (who at that point will be a past bride) how she felt about your services. If you crushed it, in all likelihood she will recommend you. If you then book those weddings and crush them as well, referrals may pile up to the point you could be turning down work. Again, a very good problem to have as a freelancer.

Don’t just leave referrals to chance. Ask clients to refer you to anyone they may know who could use your services. While some clients may not want to risk contributing to making you too busy to do their work, most will understand that you’re running a business and need a steady influx of work to survive and thrive. Plus, it makes them look good if they refer you to someone and you shine brightly. 

6.     Networking = working. Not every other freelancer out there doing similar work as you is competition. Under the right circumstances, they can also be your ally. For example, if you’re a freelance marketing writer and get a call to do technical writing—which you don’t do but know somebody who does—you throw work that technical writer’s way. And they, in turn, may be inclined to throw marketing jobs your way if they’re contacted to write, say, a brochure, which isn’t their thing because their specialty is manuals.

Or let’s say you’re back to shooting weddings. Well, getting to know the DJ at the wedding you’re shooting could be a productive move because lots of weddings involve both a DJ and a photographer, and that DJ may one day be asked if they can recommend a photographer—just as you may one day be asked to recommend a DJ. Mutual backscratching as a freelancer can be an outstanding way to line up paying gigs.

Also, consider joining professional organizations that pertain to your area of expertise. Attending freelancer networking events packed with others involved in your profession can be networking gold.   

7.     Offer strategic advice when appropriate. Unless you’re being hired specifically to implement a strategy that has already been thought out and planned to a T, chiming in with strategic advice could make you a more valuable commodity than another less-vocal freelancer. For example, if you’ve been hired to write an article with a certain slant on a subject, but you think it might be a more compelling piece if you slant it in a different direction, your client may appreciate your insight and recommendations.

If they don’t, then obviously give them what they’re paying you for. And try not to be too opinionated, outspoken, or wanting to go a different direction on every assignment. If a client feels like they need to argue with you and win you over just to get what they want, they’re almost certainly going to stop using you and go with someone else. But, if they feel like your insights and recommendations are valuable, they may solicit them from you regularly or even give you carte blanche to take a project in a direction you think is best.  

8.     Don’t ignore work-life balance. Just because you’re working for yourself doesn’t mean you should only focus on your work life. To be an effective worker, you need to care for your personal needs as well. So, if you’re working long hours to make it, be sure to still carve out enough time to recharge your batteries and nourish personal relationships. Staying balanced, if done right, should actually improve your work and productivity, not diminish it.  

9.     Invest and reinvest in your business and yourself. Any growing business needs investment, both in time and capital. So, if your freelance business starts to grow and prospects look rosy, invest in yourself by acquiring the things you may need to take it to the next level.

As a referral-getting, networking wedding photographer, you may decide it’s time to acquire more cameras or lights or even a drone to get aerial shots that dazzle your clients. If it helps your business, it should eventually pay for itself, and it should be tax-deductible.

Also consider taking classes or workshops that are an investment in yourself. The more skills and areas of expertise you possess, the more value you offer to clients. So, if you’re a freelance dance instructor who teaches Salsa, Hip-Hop, Disco, Folk, and Tap, you’re probably going to work more than the freelance instructor on the other side of town who only teaches Salsa and Hip-Hop—especially if your technique and expressive style blow theirs out of the water!

10.  Keep accurate books and be prepared for taxes. Unless you’re freelancing entirely under the table, which is illegal, the income you generate doing freelance work is taxable. What’s more, since you don’t have an employer automatically deducting taxes from your check, it’s up to you to declare your income and pay any taxes owed. So, set money aside and earmark it for covering your tax bill.

Self-employed individuals are generally required to file an annual tax return and pay estimated quarterly taxes. If you think you can handle taxes on your own, there are helpful tax and bookkeeping software solutions available. Otherwise, consider hiring a tax professional to help you get them done correctly and as advantageously (to you) as legally possible. You should be able to deduct tax-preparation fees as a business cost.  

Also, consider getting a dedicated credit card for your freelance business. If you use the card strictly for business purposes, it makes keeping track of business expenses easier. If it’s a rewards credit card, it could also help you save money on things you’re buying to keep your business going.      

Making the move to full-time freelancing can be a leap of faith. But it could also be a leap that’s more rewarding, more lucrative, and satisfies you in a way a full-time nine-to-five never did. By being skilled at your craft and implementing some or all of the above tips, you may finally work for the best boss you’ve ever had – you!        

 


About the author:

Sean P. Egen

After realizing he couldn’t pay back his outrageous film school student loans with rejection notices from Hollywood studios, Sean focused his screenwriting skills on scripting corporate videos. Videos led to marketing communications, which led to articles and, before he knew it, Sean was making a living as a writer. He continues to do so today by leveraging his expertise in credit, financial planning, wealth-building, and living your best life for Credit One Bank.




This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.


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