Setting up your business as a freelancer is a decisive moment in your career. Things can go great, but most often, before things start to go great, they take the opposite turn.
Here are my tips and best freelancing hacks for starting freelancers no matter what industry you’re in. These generic business building principles apply to everyone.
(Originally I posted these tips on LinkedIn during September–November 2019. Follow the links in the headers to join the discussion!)
Get the basics right from the beginning to avoid being much slower than your competition.
FREELANCING HACK: Specialize, specialize, specialize
Specialization is the most important part of freelancing. Everything else depends on it, e.g. clientele, pricing, branding, etc.
How to specialize?
Simply, think of the individuals who need your contribution to getting their own work done well.
Then, expand that to a group. That’s your clientele.
Make sure you can answer these questions:
- Why do they need you?
- What value can you bring to their work?
- How much is that value worth in cash?
- What else can you offer to those clients besides the core value?
- Where else can they get the same value?
Be sure to void these pitfalls:
- Offering value that almost anyone else can offer (as you’d end up in a race to the bottom)
- Offering value that is not critical to your client (e.g. execute menial tasks)
- Going overconfident on what you can really offer (as only successfully delivered services pay off)
- Underestimating your worth (never go below the market price)
My technical specialty came directly from my work history. It was challenging to describe the value-added parts of my “package” which eventually became more comprehensive than any others for specific types of companies.
You only need to beat the next guy in your marketplace. 😉
FREELANCING HACK: Define your ideal client
You won’t be able to find your ideal clients unless you’re able to define them.
Even if you have contact with many potential clients, you might not recognize the opportunity unless you know what you’re looking for in a client.
The only reason for me not starting a freelance business earlier was I couldn’t imagine my clientele very clearly.
Prior to freelancing, I was a CTO and co-founder of a startup and very much used to do everything myself from zero to a sellable product.
When it became obvious that our startup could not scale up, I realized who I should target as freelance clients: startup founders or small business owners creating new businesses based on the technologies I specialize in. They need experience, a wide skillset, technical creativity, and hands-on capabilities to build complex products quickly.
I knew lots of those guys look to freelance sites for getting things done fast and well. I knew because I did that before myself! I understood my marketplace. 😉
Ever since I got clear on who my ideal clients are, the rest has been really easy to figure out.
Define your dream clients to find them. Avoid blind shooting. 😉
FREELANCING HACK: Deliver more than expected
To get the job done is obviously something expected from a freelancer in every project.
It is even better to over-deliver. Make your client fully appreciate everything you have done by doing just a little bit more than requested.
I had a project for a couple of months for a very interesting company to deliver a product on one of my favorite augmented reality hardware.
There was much discussion on which device to pick, we picked the most suitable one, and I finished the project.
We knew there was a new device coming within a year which might be better for the purpose.
I offered my client to do the upgrade for free! And I did when the time came.
That worked perfectly for both sides. The client had paid good money already, so I could easily throw in an extra day or two to make the upgrade, and closing the project officially was in my best interests.
I was asked to deliver another project later. 🙂
Freelancers have no job security, but you can increase your chances of getting repeat clients by delivering more than expected.
Be on your client’s side and they come back to you… because they trust you and they like you.
FREELANCING HACK: Think long term
You might think freelancers work on little gigs for a few hundred bucks at a time.
Well, some do, unfortunately.
The good ones, never. 🙂
The longest project I’ve had took about half of my time for 2 years and 4 months.
It started as a small software development project to produce a demo of a brave new product. I made it happen in about 6 weeks.
The client acquired more funding as the idea was very promising.
We then had a lot of discussion on how to develop the demo into a full-scale product.
I helped the client to figure out the technical challenges that they would face in the long term with the intended product. Those challenges turned out to be bottlenecks in their business plan, which had to be solved first.
That resulted in another 2 years of collaborative work during which we developed a completely new way of solving those technical problems, a software that enables real business operation, and the foundation of the company’s intellectual property.
Don’t only answer to the immediate needs of your clients. Solve their long-term problems too and you may become almost like a partner for them.
FREELANCING HACK: Learn expectation management
Making sure your client knows what is coming is the cornerstone of freelance business.
You cannot let the client be uncertain about what you will deliver.
Your client must know when the delivery will take place.
The payment method has to be clear from the beginning.
You also have to define what support you offer after the delivery if any, and how long.
Usually, after hearing out what kind of software system my client wants, I give an order of magnitude scale of things during the first call. After it, I outline the project, set estimates for each major module I’d need to develop, and come back with a delivery date and overall cost with a list of things to be included and a list of things that will not be included.
Never forget the latter part! It’s your lifeline in freelancing. 🙂
FREELANCING HACK: Pick the right company structure
If you are serious about making it as a freelancer, you don’t stay in the security of your day job but go out there on your own to earn every cent you get directly from your markets!
To do that without issues, it is good to register a company.
A simple way to assess your own need is to think of the likelihood of getting into a legal dispute with anyone. If your assessment is that it will never happen (and please think through all possible scenarios twice), a sole proprietorship will save you time from paperwork.
In case your freelance business requires complicated contracts or otherwise deals with legal things on a regular basis, a partnership or even heavier forms might make sense.
I even know freelancers who run private limited companies because their own work is mainly about architecting rather large solutions, signing contracts with a multitude of other freelancers or agencies, and run their stuff not in a hands-on role but in a CEO role.
I’ve never had any legal issues in 5 years. Transferring all rights to patented solutions or other intellectual property is much less complicated than it sounds, so I’ve never suffered from having a very basic company structure. Not much tax either. 😉
Yet another thing is to consider country-specific limitations in case the country you live and pay taxes in does not match the country issuing your passport. 😉
FREELANCING HACK: Explain your deliveries accurately
Some seem to think the results stand on their own and send deliveries to clients without anything more than a short message about where to find them (e.g. Dropbox link).
However, sometimes it is equally important to write a message explaining the delivery. This is especially significant when meeting the first milestones of a project being done for a new client when the way of working may not be predictable yet.
Sending partial results may cause the client to react badly, patronize you, or refuse to make the milestone payment, only because the delivery is not understood!
On the other hand, polishing everything before showing anything at all may result in much redoing per the client’s feedback.
Examples:
- A programming gig may start with bare-bones functionality, but a non-technical client can only understand what is shown on the screen: “Nothing has been done!”
- A 3D model produced may not be the final version yet. Texturing and materials might look messy although the shape is already perfectly detailed: “This looks like **it!”
Make sure the client understands what your delivery contains and what is still missing at each point of the project.
FREELANCING HACK: Categorize your income and expenses
Before you jump into running a freelance business, it is a good idea to figure out how to manage your books.
Simple businesses might only require a well-maintained Excel sheet.
If your business produces a lot of individual expenses, lightweight accounting software might be a life-saver.
Heavier businesses might demand a real accountant (your freelancer friend, of course).
If you run your business through a freelance site, at least your income is already categorized and summed up.
Don’t leave your accounting efforts to the last minute just before the tax filing deadline. That will usually result in lost time in finding missing receipts, re-counting your profit at every step, and another painful hassle with papers.
Do your bookkeeping on a monthly basis, if not weekly. Efficiency is the key.
Form a good systematic approach from the start to avoid last-minute panic and mistakes in tax filing.
FREELANCING HACK: Archive everything
It is good to maintain archives of all the projects you run. Google Drive, Dropbox, and other cloud services allow you to have an infinite amount of gigabytes of archives with little money.
The benefit of having all work files archived is that sometimes clients lose their work so your backups might be the only ones left!
Using any of the file-sharing tools allows you also to share all deliverables and source files with your client when the contract is finished, if not sooner, to make sure they are covered for all unexpected issues.
Make sure your client gets every asset you’ve produced, and make sure they are retrievable by you (unless ordered to be deleted by contract in projects that require secrecy).
And what comes after knowing all the freelancing hacks for starting freelancers?
Yes, there are more hacks! Next, if you’re about to start your business mainly online, I’d recommend going through the 10 Freelancing Hacks You Should Know Before Joining a Freelance Site, and 11 Empirically-Proven Freelancing Hacks for Online Freelancers in case you’re already in business and looking for ways to increase your earnings.
