So, you want to start a freelance business. You have the enthusiasm and the motivation — but you aren't quite sure how to get started.
We've got you covered with actionable advice on how to create a portfolio website, look for clients, handle taxes, and figure out whether or not you need insurance.
All the super-fun stuff you have to do before you can start living your best life working from a beach in Belize. (Or your couch in sweatpants, we won't judge!)
How to Launch Your Freelance Business in 6 Steps
If you are just getting started on your freelance journey, you might be feeling a bit overwhelmed — there's a lot to learn, and you might wonder if you have what it takes to be successful.
The reality is, millions of Americans are successful freelancers and you can be, too. Freelancing is a reliable source of income — even full-time income — if you are willing to put in the work.
Despite the number of people who are already freelancers, getting started can be a struggle.
- Should you set up your website first?
- Do you need indemnity insurance as a freelancer?
- What about a business license?
Take a deep breath — we're going to walk you through everything you need to know to launch your freelance business in just six steps. (Yep, it really is that easy.)
1. Create a Freelance Business Plan
Starting a freelance business is just like starting any other business — you need to have a plan, a purpose, and a general idea of what you want to offer. This doesn't have to be fancy — in fact, you may be the only one who sees it. But, it will help you focus on what’s important to you and your business.
Fire up Google Docs, or grab a pen and paper to answer these questions:
- Company Name: Will you offer services under your name or use a DBA (doing business as)? Depending on your state, you may need to register your business and get a license if you use a name different from your legal name.
- Target Audience: Who is your target audience? Be as specific as possible. "Restaurants" is too broad of a target audience; instead you might say "Single location, locally-owned restaurants generating less than $1.5 million in revenue a year."
- Services: What services will you offer? Again, be specific. If you are a writer, what type of content do you write? Website copy and landing pages? Blog posts? All of the above? What topics are in your niche? If you are a programmer, what languages are you familiar with? What projects do you take on?
- Rates: How much will you charge? Will your rate vary by the project? Are you charging a flat per-project fee or an hourly rate? (Find out what is most common in your industry.)
- Competition: Who else offers the service you are looking to provide? What kinds of clients do they take on? How can you position your offering to be competitive?
- Differentiators: Why should a client choose you over a larger business or another freelancer? Do you offer more personalized service, do you bring more experience to the table? Are you more affordable?
Should I have a backup plan before launching my freelance business?
It really depends on how you work best. Some freelancers find that having a backup plan helps them feel more secure as they embark on their freelance journey. Others find that diving in with no backup plan keeps them focused on their goal.
2. Build a Portfolio Website
The goal of a portfolio website is to show prospective clients that you are a safe bet — you know how to complete the work, and you have a proven track record of success.
Your freelancer portfolio site should include:
- Your education (if relevant)
- Past work experience (if relevant)
- Examples of your work
- What problems you help clients solve
- Reviews from past clients
- Contact form
- Links to social media account (such as LinkedIn and Twitter)
Should I include rates on my freelance website?
In general, you should not list your firm rates. A rate card can limit your ability to adjust pricing based on each client's needs. Instead, consider using flexible language like "Rates starting at X per hour/project." This way clients will have a general idea, but you don't lock yourself into a low rate.
3. Make Sure Your Freelance Business is Legal
The legal side of freelancing can feel overwhelming — but don't let it hold you back. Start by finding out if you need a business license in your state; not all freelancers do.
For example, in Illinois, you do not need a business license as a sole proprietor unless you use a DBA (doing business as) name.
- License: Use this resource to find out what the business licensing requirements are in your state. Obtain any licenses that are required.
- Bank account: Depending on your state, you may not be required to open a separate business bank account. However, using one bank account only for freelancing payments and expenses makes it much easier to keep organized for tax time.
- Get an EIN: An employer identification number (EIN) is a unique number used by the IRS to identify businesses in the U.S. It allows you to fill out a 1099 form without providing your social security number to every client.
- Insurance: Liability insurance protects you and your assets should anything go wrong — and some clients may require it. You should also consider health and disability insurance. The Freelancers Union provides insurance resources to help you find the right policies.
4. Draw Up a Contract
Freelancer/Client contracts protect you, but they also help define expectations, set fees, and ensure you and the client are on the same page. Most freelancers will not work without a contract — and some businesses may require you to sign their contract before working with them.
While contracts could be a full post in and of themselves, we're going to cover the basics.
- Don't work without a contract.
- Contracts should cover ownership of intellectual property, damage liability, payments, due dates, the governing body, late fees, and what occurs if the contract is breached.
- Review contracts from clients carefully — don't sign them blindly.
To make this part of the process simple, you can start with a contract template.
Clarrow offers a simple and intuitive contract builder that lets you pull together the important parts of your contract with ease. Pulling services, pricing, and dates right from the proposal, you can generate a custom contract for each client, select and customize the important terms you need , send with a single click, and then sign online.
Creating contracts is an essential part of protecting you and your freelance business; but they shouldn’t slow you down.
5. Prepare for Taxes by Tracking your Expenses
As a freelancer, you can expect to pay around 30% of your gross income in taxes. Your final tax bill can vary based on how much you make and your expenses, but saving 30% will ensure your bases are covered.
Since you won't have a paycheck to tax, you will need to pay quarterly estimated taxes to the IRS and possibly your state. If you are freelancing part-time and have a W-2 job, you can ask your employer to take out more taxes.
Track anything and everything you buy for your business — this can include website hosting, the cost of billing and accounting software, postage stamps, printer ink, paper, pens, a computer, or new computer accessories. These expenses can be subtracted from your gross income — which means you won't have to pay taxes on them.
This is absolutely critical, because if you don’t keep track of your expenses, you’ll be paying taxes on that amount, even if you spent it to keep your business running.
The easiest way to keep track of your expenses is with an expense tracking app that syncs with your bank account and lets you quickly flag and categorize your business expenses and add any additional expenses that you incur.
Clarrow connects with your bank account to automatically pull in your expenses, keep track of each cost, and also keep up-to-date accounting records (almost) like magic.
6. Find Freelance Clients
You have a website, you know what services you want to offer — now, how in the world do you get work as a freelancer?
Finding clients can be one of the greatest struggles of freelancing life. In fact, nearly two-thirds of freelancers say that finding work is one of their top concerns.
Here are a few methods for finding freelance clients, no matter what industry you are in.
- Learn How to Pitch: Just like any other business, you need to learn how to sell yourself. Depending on your industry, this might include sending letters of intent emails, reaching out on LinkedIn, and cold calling.
- Reach Out to Your Network: This is one of the easiest ways to drum up business because you already have a connection. Let your friends, former clients, and colleagues know you are looking for freelancing clients.
- Use Job Boards/Freelancer Platform: Especially when you are starting out, job boards and freelancer platforms can be a solid source of clients. Upwork, Fiverr, Guru, and Flexjobs can provide leads — just be wary of scams and low paying clients.
- Professional Groups: This could include your high school or college alumni association, local business groups, mastermind programs, or LinkedIn groups related to your industry.
- Ask Other Freelancers: Where do other people in your industry find work? Or, do they have any work they can pass off to you?
4 Essential Tools to Manage Your Freelance Business
As a freelancer, you are in charge of your entire business. There is no accounting department, no legal department, and no receptionist. So, how do you manage it all? With a little help from your friends — your digital friends, that is.
Here are four essential tools to help you manage your freelance business.
Clarrow for All-in-One Business Management
This all-in-one platform was designed specifically to give freelancers a simple and powerful tool for managing their entire freelance business from one place.
It offers all of the critical features you need to run your day-to-day operations in minutes, rather than fiddling around with spreadsheets, PDFs, and 100 other tools and software.
Do everything in just one place:
- Track income and expenses
- Create proposals that wow clients
- Build, send, and sign contracts
- Generate fixed-price or hourly invoices
- Collect payments
- Manage projects, client contacts, and more
The dashboard is simple to use, so you can focus more on getting work done and less time on figuring out new software.
The only thing it can’t do is find clients for you.
Best of all, it’s free to get started. So, don’t wait to take the first step.
Asana for Task and Project Management
Asana is a project management tool designed to improve project organization and team (or client to freelancer!) collaboration. Features include a task management system, project plans, the ability to set deadlines, attach files, and workflow automation tools.
It works on both desktop and mobile devices.
Their basic plan is free for up to 15 team members, so you can add clients to projects to keep them in the loop without paying a monthly fee.
Boomerang for Emails and Sales
As a freelancer, missing an email or forgetting to respond could cost you thousands of dollars. Boomerang is a Gmail extension that reminds you to respond to emails, prompts you to follow up when people don't respond, and allows you to schedule emails to send later.
No more tracking pitches and remembering to follow up when you send out a contract — Boomerang will track it all and remind you right in your Gmail inbox.
Boomerang will also help you write more effective emails with Respondable, and AI-based writing assistant.
Grammarly for Communication
This online tool and browser plugin is designed to take your writing from "meh" to perfect. It checks for common grammar mistakes, like using the wrong "your," and more complex issues like tautologies.
The goal feature gives tailored writing suggestions based on the type of content you are writing and your audience.
Writers can use this as a second set of editing eyes for all their work, while non-writing freelancers can use Grammarly to make sure emails, proposals, and contracts are error-free.
Starting a freelance business is a big step — but don't let all the details overwhelm you. The steps on this list will help you get off on the right foot so you can be working on the beach (or your couch) in no time.
Clarrow is an all-in-one freelancing tool designed to help you manage invoices, create contracts, track expenses, and so much. Start your free trial today.