I know what panic feels like. I know what losing your job feels like — in the spring of 2001 when my dot.com job blew through ten million in venture money, I started collecting unemployment checks. Freelancing was for the rare few because everyone coveted the security of a full-time job.

Now, I’ve learned that security is an illusion because we can lose clients and jobs. And now that we’re living in a strange moment where nothing is certain and everything feels so out of our control, maybe we can take small steps to regain that control.

I don’t have the answers, but if you’re looking to start a freelance business out of desire or need, I’ve got you.

Now, let’s talk about the necessary, not so fun part of the freelance game — business set-up: legal, financial, and infrastructure.

Let me make one point clear — you can skimp on a lot of things when you get started, but the legal and financial aspects of your business should not be one of them. Invest in this now, or you’ll cry kittens during tax season. Trust me.

But first, define what you want to do in your freelance business and whether there’s a market for it. Be brutally honest. You need to be doing something you can make a living off of. Ask yourself:

  • Do people buy or hire freelancers for the type of work I’m offering? Do the research. Is there a demand for your work? What are people paying for it? Make sure you price yourself wisely — there are scores of online calculators that can help you figure out your rate. Determine if you want to be paid by the hour or by the project. I could write a whole piece on hourly vs. project, but for now, at this point in my career, I only do project rates.
  • What’s the range they typically would pay for services (this can be a broad spectrum — for now, you want to get a sense of viability).
  • Where am I on this spectrum of experience?
  • Have I done what I’m selling before, and have I done it successfully? You may be laughing at this one, but I’ve seen freelancers sell services for which they have little to no experience. Your clients aren’t your training ground. This is their money, and they’re paying for someone who can get the job done professionally.
  • What’s unique about me? What skill sets do I have (personality, expertise, insight) that make me stand out? What am I most proud of?

The answer to these questions will determine your value proposition, i.e., why people should hire you when compared to other options. Now, it’s easy to get imposter syndrome — especially if you’re starting. But remember, you may have skills others don’t — maybe you come with amazing, creative and fresh ideas. Perhaps you know social media better than the lot because you’ve built your brand. Maybe you can code like a MOFO because in your spare time at your nine-to-five, you created a ton of apps and websites for yourself, friends, and small-time clients. Just because you’re green doesn’t mean you don’t have value.

Don’t focus on everyone else. They’ll always be someone cooler, cuter, more experienced, etc. Focus on what makes you super special.

Define Your Dream Customer

You’ve been at this game long enough to know the kinds of people you don’t want to work with. However, you probably had little control because you worked for someone else.

Now, you have the freedom to make your own rules. You can break your rules if you need to pay the bills or during a PANDEMIC, but you can’t have exceptions if you’ve never made rules.

You’re probably thinking, PFFT! Every client is more cash in the bank and another notch in my portfolio. I’m here to tell you that this is not the case. Just because someone can pay you doesn’t mean that person should be your client.

It’s important to first define your dream client. More importantly, you have to figure out who you don’t want to work with. Think about the challenging relationships you’ve had — the personality clashes and disconnects. Know who doesn’t light your fire, and use that intelligence in your new business process. Finally, you want to consider the challenges your client is having and how you can be the one who solves them.

  1. Describe your ideal client? Who are they?
  2. What kind of business are they in? How large is the company?
  3. What are the company’s values, and do they align with yours?
  4. How does your client value you? For example, I’ve shifted my model last year to use my 20+ years of experience to help small businesses, start-ups, and mid-sized companies.
  5. Describe the client you don’t want to serve.
  6. What typically motivates them to buy your services? What problem do they need you to solve?
  7. What are most of your clients buying? Where’s the demand?
  8. What do you want clients to think/feel/do when they engage with your services?
  9. What kind of transformation do you want your clients to experience?

The majority of my clients are small to mid-sized companies, and they view me more as an integral partner than as a vendor. These businesses aim to create products and services that genuinely meet the needs of their customers. They operate from a place of honesty and integrity, which aligns with how I want to live my life.

Establish Your “Why”

Yes, we all want to make money, but that goal isn’t self-sustaining. After a while, you’ll realize money is a thing, but not the only thing, and then you’ll risk being resentful of the work you do. Do you have big dreams of leaving the world in better shape? Do you have a skill that would truly help and transform other people or make their lives easier? A sense of purpose can be a constant motivator.

Define Your Values

Values are the ideals that help define who you are and determine what is most important to you. Consider these single words that resonate with you, connect deeply with you at your core. Trust me, this is INTEGRAL to your business. Check out my most recent article on how to define your values and integrate them into all aspects of your business.

Create a Business Plan

It’s easy to convince yourself that you don’t need a business plan, but creating a business plan with financial projections forces you to think through your business and details. People tend to rush into their new venture with a website and an email blast without making a plan for how they’ll build and grow their business. Do the exercise, if anything, to validate your idea and how you will earn income. Keep your plan a living, breathing thing that you revisit and adapt regularly. Check out these two tools to get you started.

If you’re not a fan of a business plan, I would focus on answering these four questions to start:

  1. Who are you selling to? [audience]
  2. What are they buying? Remember, you can’t sell a vague feeling. If someone is throwing down cash, they want to specifically know what they’re getting. [product/offering]
  3. What are the results/outcome that they’ll experience as a result of buying you? [benefits/results]
  4. Why are you the one to do this? Do you have a specific expertise or competitor edge? [positioning, reason to believe]

Then, consider these questions when it comes to breaking down what you want to do. Do you want to:

  • Work with a specific kind of client. If so, who?
  • Work within a specific field, category, geography, or niche?
  • Pair your services with digital or physical products? If so, what how and what kind of product?
  • Use your skills and work to achieve a higher purpose? If so, what is it?

Be clear on what you want to be known for. You may want to work for yourself, but maybe you’re still attached to the rules and frameworks of your former job and life. Maybe you think you need to do what you’ve been doing, but ask yourself what you want to offer. What lights you up? What’s the best way you can serve people?

Think about the projects you’ve worked on and loved. What components of the work lit you up? What was it about the clients that made the work empowering? Start to craft what your ideal day in this new life would look like and what you would be doing. Nothing’s off the table.

Picture being the kind of pro who’s viewed as a guide, who gets hired not only for their talent, but for their ideas, and who shares not only their work but their advice and their point-of-view. Defining what you want to do is critical because you need to frame up your offering, package, or product in the way you want to be hired.

Now that you’re a free agent, there are no rules. You can carve out precisely what you want to do, which can be a departure (or a repackaging) of what you’ve done before.

Figure Out the Money

Most freelancing business can take a lot more time to get off the ground than you expect. Know where your living expenses for the first year will come from (e.g., savings, a job, spouse’s income, etc.). Make sure you’ve got a cash cushion for the months when business is slow. And trust me, everyone gets slow seasons. This is an excellent post about freelancing and getting started.

Name Your Business

You want a name that will stick in your target audience’s heads. And it shouldn’t already be taken by another company. Do Google searches and use a corporate name search tool to see if the name you have in mind is unique. This excellent post from the Small Business Association is a great way to get started. For those who live outside the U.S., do check with an attorney on this because even though you may live outside the U.S., you’re doing business within the U.S., and that still might impact your name.

Register Your Domain Name and Email

Get a matching domain to your business name. A Gmail email address or a website with free hosting and a name like mysite.wordpress.com makes it seem like (a) you are not running a real business or (b) you don’t plan to be around long. Invest the time and money to make your business look legit. You can use tools such as:

Figure Out Your Legal Structure: Sole Proprietorship, LLC or S-Corp

Setting up your business’s legal structure is critical for tax and liability implications. Talk over structure (corporation, LLC, sole proprietorship) with your attorney and accountant. We do have a section where we outline the definitions of LLCs and S-Corps, but again, it’s critical that you navigate your options with a licensed professional.

My accountant penned an amazing article on the differences between legal structures: LLC & S-Corps.

Apply for an EIN

An Employer Identification Number (EIN) helps you separate yourself from your business. You’ll need it if you plan to incorporate your business or open a business bank account. DO NOT DO BUSINESS OUT OF YOUR PERSONAL CHECKING ACCOUNT. Plus, with it, you can avoid giving out your social security number (leaving yourself vulnerable to identity theft). EIN numbers are free; apply online. I recommend you speak with your accountant about setting up the financials for your business (i.e., business checking accounts, credit cards, financial bookkeeping for tax season).

Open a Business Bank Account

It’s all too easy to use your personal bank account to pay for business expenses, but it becomes a gnarl to untangle later — especially when dealing with the IRS. Don’t give yourself unnecessary stress.

Set Up Your Accounting System

Once you have your bank account set up, choose an accounting program. Few things will doom your business faster than books that are a mess. The two best investments in a business are a good lawyer and a good accountant. You can bootstrap a lot of your business to save money, but these investments are for the long-term and ensure you don’t have headaches down the road. I’m a big fan of Bench and Freshbooks. Check out Bench’s helpful articles on:

Determine If You Need to Apply for a Business License

You may need one depending on your industry and where you are located. Most licenses operate at the state or local level. The SBA has a great licensing and permit tool. Again, you probably won’t need it, but it doesn’t help to tick all the boxes.

Set Up Your Website

Get your website up and running as soon as possible because it’s your business card, point of contact, and it also establishes credibility. What you don’t need, however, is a fancy website — only a functional one. You can get templates from Template Monster or Squarespace that are professional and adequate for your business needs. Your website should outline your experience, expertise, services, and an easy way to contact you.

You don’t have to include case studies on your website (you may not be permitted to do so, contractually because clients get sensitive about their information out in public) or pricing. This can come via initial conversations where you go through a pre-qualification process.

Start Earning That Cash Money

Start generating revenue as soon as possible. At the early stages of a startup there is never enough money — resist the temptation to wait until things are perfect. Oh, and get your lawyer to create any customer contract forms necessary.

What You Can Tackle Later

While you don’t want to put off these tasks too long, they don’t need to be checked off your list before you launch your new business.

Refine your pitch

You need a good elevator pitch for many reasons: customers, grant applications, prospective new hires, bankers. If you can’t persuasively pitch your business, how can you expect key stakeholders to buy in?

Refine your services and your marketing and sales approach

As you go along, you will learn more about the marketplace. Use customer feedback to refine your product and service offerings, and your go-to-market approach. This is the time to think about your marketing, sales, and partnership plans, if applicable.

Find free advice

Your local SBA office, SCORE, and other small business resources can provide you with free information, access to business templates, and other tools. I’m also a fan of listening to podcasts like Being BossIn the TrenchesWhat Works, and Creative Class for useful advice. Everyone always thinks they need a human mentor, but education and influence can come from everyone, and you may not be in a location where it’s easy to connect with like-minded freelancers. While I have a couple of informal mentors, I also lean on podcasts, websites, books, and courses from people whom I respect. They’re filling in the mentorship gaps.

File for trademarks and patents

The best thing to do is to consult an attorney early about the need for trademarks or copyrights. If you have a proprietary model or approach that you don’t want anyone else to copy, you can trademark it. Consult an attorney early on. Then you may be able to defer filing for a while, depending on the nature of your business. You may not need one, depending on the nature of your business, but better to be safe than sorry. Also, you might want to check to see if your business name has been filed as a DBA (Doing Business As) or a trademark. Isn’t it frustrating to think of a cool name to then discover someone in a small town trademarked it for their local shop?

Work your network

I have a philosophy that if I don’t like you, I can’t get on the phone or spend time with you. I want the time I spend with people to be gratifying. Have coffee with your peers. Schedule Skype/FaceTime dates to talk shop or buddy up with a peer for ongoing mutual support as accountability partners.

Ask your friends for specific introductions to people in their network, but don’t be vague. Don’t just say, “Can you hook me up with someone in your network?” Rather, say, “Do you know someone in nonprofits who works in social media marketing? I’d love to hook up with them for [X reason]. Could you make an intro?”

A key point: Never ask for or make blind introductions. Always ask each party if they want to be connected. It’s proper professional etiquette, and it ensures both parties are interested and not put in an awkward or compromising position.

Finally, Shout Your Shine

Tell everyone you know that you’re freelancing: your mom, your best friend, your dog, the barista at Starbucks — you get what I mean. Work can come from anywhere, but no one will offer you work unless you announce that you’re looking for it. I routinely send brief emails to my network outlining the kinds of projects I’m taking on and asking if they or someone they know is looking for a bomb-ass consultant. Email everyone in the free world: Do you need help? Do you know anyone who needs help?

And feel free to peruse my extensive catalog of articles on freelancing — everything from writing proposals to client management.

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