Freelancing is a life of freedom, of sampling from many plates, and of feast or famine. There are no sure bets in freelancing. Like anything, it comes with a set of positives and negatives, but one thing is for certain – if freelancing is the path you’d like to take, you’ve got to prepare for best results.
Longtime freelancer Nick Girard has shared some valuable tips to help you get started as a freelancer on a good note and hedge your bets for success at a sometimes uncertain career path.
Scrimping and saving when you’ve got a steady job will set the stage for the times when a job ends abruptly, and you aren’t yet sure what comes next. Life’s not cheap, and you’ll want to make sure you’ve got enough to cover your costs even if you don’t have money coming in. While you’re saving, hang onto those new “cheap living” skills you’ve cultivated and use them to stay ahead of the game.
Act Like A Business
Before you even get started, get all of your business ducks in a row. Set up banking and credit accounts just for your business finances and get (and use) accounting software. Acquire yourself some business insurance – some jobs will require it.
Don’t overlook the importance of an ironclad contract to protect you from being stiffed for pay or otherwise taken advantage of. You can find or purchase contracts online, but it’s still a good idea to have a lawyer look them over. It will likely cost you something, but it can pay for itself if you ever need to use it to recoup after a breach.
Save Some More
When you’re employed, you file some documents at the beginning of employment and relax as your taxes are deducted from your income automatically. Not so when you’re a freelancer. What’s more, freelancers don’t reap savings in employer-matched contributions to funds like Social Security. That’s all you.
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Don’t get caught owing money you don’t have when tax time comes. Set aside 20-30% of your income in a business savings account and if you’re lucky, you might have a little left over after you pay. Even if you don’t have extra money, you won’t be panicking and figuring out how to set up a payment plan with the IRS, which is nice.
Bonus tip: When you price your work, remember that 20-30% immediately dissappears and take that into account.
With these tips in mind, your freelance career will start on a much more solid foundation than if you’d just decided to jump in and wing it. Check the video below to hear more from Nick.