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Starting Out In Freelance : Business Bits

Chances are, if you are reading this; you are thinking about becoming a freelancer. Freelancing is a great way to hone your skills as a designer or developer while making extra money. It may even be a goal to make it your full time occupation. Here we will look at starting your exciting career as a freelancer!

Don’t Quit Your Day Job.

You have a great thing going at the local quik-mart, why give it up? Until you can at least match your current income keep your day job. One of biggest mistakes a freelancer can make starting out is to cut ties with standard employment. You’ll need that extra capital during the lean times, I promise.

Some Business Bits.

Before we even get into the “in’s and out’s” of becoming a freelancer, we have to have a good foundation in place. These suggestions are a must when one is first starting out. Some of these recommendations will be universal; while some will only apply to us in the states.

Check With Your Local Government.

Check with your city, state, province officials to see what your local government requires of you as a freelancer. Here in beautiful Tennessee where I am located there’s no specifically set laws or requirements.

Grab a EIN.

An EIN is an ‘Employer Identification Number’ it’s like a social security number for your business endeavors. One can be obtained by visiting the good old IRS website. It takes about ten minutes for the entire process and it’s painless.

Advantages of using an EIN over a Social Security Number:

• Business banking accounts require an EIN.
• Some vendors such as gotprint.com have affiliate programs that require an EIN.
• EINs provide more security than giving out your social security number to clients.
• You will seem more professional and legitimate in the client’s mind.

Get A Bank Account.

With all the money you are planning to make, you’ll definitely need a bank account. This account really needs to be seperate from your personal funds. Start with a bank you know and trust. It doesn’t really matter if it’s a ‘business’ account unless you do business under another name, like a studio name. That way the client’s payment can be made out to you or your studio’s name.

Get A Savings Account.

One way to simplify your taxes is to take a percentage of the top and place it into a savings account. I usually take out 40% or so to account for any screw ups in my math. A savings account is best for this because once you pay your taxes there will always be residual money in the account and it will be earning interest. Who doesn’t like free money?

Make A Business Plan.

Wait! don’t go to sleep! It doesn’t have to be anything fancy, just set some rules and goals for yourself. Think about how much money you can realistically make. It’s statistically proven that if you wrote down your goals and aspirations that you are more likely to accomplish them. As part of your business plan, define your target customer. If you want to specialize in making logos for small businesses, write it down. You can come back to it later and refine it to help with an elevator pitch.

The Essential Elevator Pitch.

An elevator pitch or elevator speech is a short persuasive speech about a person, an organization or group, or an idea for a product, service, or project. The reason its called an elevator pitch is that it shouldn’t take any longer than a typical elevator ride, thirty seconds to two minutes, tops. The pitch you would be using mostly would be something like this:

“Do you know how many small businesses are forced to build a substandard website themselves or totally forego a web presence because of not having a complete understanding of web strategy? I specialize in designing and developing websites all the while, delivering web strategy education to the customer.”

In Conclusion.

There’s a lot that goes into becoming a successful freelancer. This was just an introduction to the business side which I know can get overlooked, as its not as exciting as the creative side of things. I plan on hanging around here at {Re}Encoded.com for a while and sharing with you the tips that helped me along. Next week, we will look at more creative things to do before getting the first client.