How to start a freelance business

How to be a freelancer and start earning from home

So you have to decided to become a freelancer.

When I started doing this full time, it was risky. I straight away quit my day job to focus on my freelance career — a month after my marriage.

I would be lying if I say it was all too easy.

It wasn’t.

In fact, I had sleepless nights trying to figure out how to make things work.

But let me tell you this: all the hardships you will be facing as a freelancer are all worth it in the end.

In this article, I will be sharing what I learned so you too would know how to be a freelancer yourself.

Let’s get this started!

What does it mean to be a freelancer?

Before everything else, let’s discuss the common misconceptions about freelancing.

Most people have heard of “online freelancers”. But what is it really about?

Is freelance the same as self-employed?

Here’s a good definition of what a freelancer is from Wikipedia:

…commonly used for a person who is self-employed and is not necessarily committed to a particular employer long-term. Freelance workers are sometimes represented by a company or a temporary agency that resells freelance labor to clients; others work independently or use professional associations or websites to get work.

Now, here’s my personal definition of a freelancer:

Freelancing is a business. Therefore, a freelancer is an entrepreneur.

Simple.

One of the misconceptions about freelancing is that it’s just like “remote employment”.

But no, they aren’t the same. The idea itself that freelancing is a business creates a whole lot of difference.

At the very least, the most notable differences between freelancing and employment are the:

  • Earnings
  • Working hours
  • Place of work

Personally, I love the fact that as a freelancer, I have more power on how much I can earn.

If you’re working as an employee, the amount of effort you exert has no effect whatsoever on your monthly salary.

It’s fixed — and unless you get promoted, your pay will stay as it as, month after month.

Pros and cons of being a freelancer

Before we discuss the nitty-gritty, remember this:

Being a freelancer is just like any other thing — it has advantages and disadvantages. It may be lucrative, but it’s also demanding.

There are numerous advantages when you’re a freelancer like:

  • Being your own boss: You have clients — not bosses. Remember, you’re operating a business.
  • No need to commute: You can stay home 24/7. At the same time, you can also bring work with you wherever you want to go.
  • Control over work hours and workload: You don’t have to wake up at six in the morning to go to the office. You work at your own pace as long as you meet your deadlines.
  • High earning potential: You’re not strapped to a fixed monthly income. Depending on how you operate your business and how you expand it, the potential is basically limitless.
  • Opportunity to learn more: You don’t have to get bored doing the same thing again and again. You can learn new skills and expand your services.

On the other hand, there are also difficulties and challenges that come with being a freelancer:

  • Tax, insurance, and other payables have to be done yourself: No one will pay your taxes and insurance for you. Fortunately, you can settle your payments online.
  • Need to find leads consistently: You will need to find clients (your customers) yourself. That’s why if you want your freelance business to go big, you have to teach yourself marketing.
  • Poor management can lead to irregular income: Heard of the feast-and-famine cycle? Freelancers who don’t think of freelancing as a business will often experience this until they learn how to manage themselves.
  • Need self-discipline: This goes without saying but all those freedom that comes with freelancing will come back and bite you if you don’t practice self-discipline.

If you want to have a successful freelance business, you really need to level up your self-discipline. For example, you will need to learn to manage your time efficiently.

Takeaway: Being a freelancer is different than being an employee. Freelancing is a business. Along with it comes benefits and challenges. Difficulties that come with being a freelancer can be overcome with self-discipline and resourcefulness.

Examples of freelance services and skills

The services or skills you can offer are as many as the available arts, crafts, and disciplines out there.

There are just too many that there is at least one or two you can start with.

But if you want to check the top skills and services that are in-demand right now, Upwork publishes a top 100 skills post every quarter.

Here is Upwork’s press release for the third quarter of 2019:

The top 100 freelance skills according to Upwork

As you’ve noticed, most of the top skills and services are usually related to technology.

You may end up backing out because you don’t know any programming or data science.

Don’t. Even if your skill isn’t about building applications and computer programs, you could still earn a lot.

I know freelancers who write for a living without any formal education in English. I even know one who earns more than $10,000 a month writing emails for clients.

The bottom line is, you don’t have to be a programmer to become a high-earning freelancer.

But let’s just say you don’t have any skills you can think you can use as a freelancer.

Here are some of the easiest services you can start with:

Assist clients virtually

Virtual assistants are those who provide professional (remote) administrative, technical, or creative assistance to clients.

Many freelancers started out as virtual assistants, especially those who felt they had no technical or high-selling skills.

Truth be told, I started as one. My very first job on Upwork was to research information about churches in Aurora, Colorado.

My first job on Upwork was to research information about churches on Aurora, Colorado.

As a virtual assistant, your role is to support your client in any way possible.

It could be as simple as organizing his documents and cleaning his email inbox. Or, it could also be deploying an article on WordPress.

Not too hard, right?

That’s why there are a lot of virtual assistants right now.

You don’t need any specialized education or certification to become one. Clients are always looking for someone to outsource some of their tasks.

There’s just one obstacle — the competition is super high.

Meaning, it will be hard to land high-paying gigs as a virtual assistant, even with the assistance of freelance platforms.

According to a post on The Week, there are more than 5,000 virtual assistants on Upwork, 74,000 on Guru, 26,000 on Freelancer, and 5,000 on PeoplePerHour.

Those figures were still from 2017 and they don’t include virtual assistants not listed on those platforms.

But if you’re looking for quick freelance opportunity, there are a lot of executives and business owners out there looking for someone to help them virtually.

Related: How to become a virtual assistant even without experience

Be a customer service representative

Obviously, companies will always need customer service personnel.

Here’s an example of a job post from Upwork looking for an entry-level customer service representative:

Entry level customer service representative Upwork job post

It’s a low-barrier service you can start with even if you don’t have any technical skills.

At the most, you need to be able to speak (and write) the required language fluently, follow instructions, and a whole lot of patience.

Those who experienced working as a customer service representative in a BPO (business process outsourcing) company will be able to demand higher prices than first-timers.

And depending on how you expand your business, you could become a serious competitor to large BPO companies.

Write and edit content

As long as people continue to read, there will always be writing and editing jobs.

In fact, there are a lot of people looking for writers and editors than virtual assistants and customer service jobs.

To give you an example, here’s how many available freelance writing jobs right now are available on Upwork:

The number of available writing freelance jobs on Upwork

Though not shown in the previous sections, virtual assistant jobs and customer service jobs only average at around 2,000 available jobs.

There are different types of writing services including:

  • Content writing
  • Copywriting
  • Creative writing
  • Research writing
  • And others

Freelancers without much experience in writing can easily find clients who need content writing.

I even found a few who are willing to train freelancers how to write for the web.

Although it’s fairly easy to find clients who need content, make sure you’re choosing your clients wisely.

Particularly, make sure that you’re paid fairly.

What freelance services should you offer?

One of frequently asked questions in starting a freelance business is this:

What services or skills should you initially offer?

If you try and search online the answer to this, you will end up with different ideas.

In fact, I’ve read many blogs and subscribed to a lot of online courses enough to know that people have different opinions in regards to this.

To save you the trouble, here are some ideas:

  1. Start with an easy service or skill. If you feel like you have no special skill, start by being a virtual assistant, or a customer service representative. The experience you gain from these services will give you an insight or idea of a skill or service you want to master later on.
  2. Start with what you know. Let’s say you’re familiar with Photoshop and you used it many times before to edit an image. Did you know that there’s a constant need for graphics? You may be able to find one online and offer your services for a price.
  3. Connect your education to a skill. If you have studied nursing, take advantage of that! You can write for clients who need medical content. You can also provide customer service for a medical company.
  4. Start by asking what your ideal clients need. This is also another way to start a freelance business. Let’s say you want to provide services to financial advisors but you’re not sure what exact services yet. You can start by connecting with them on Facebook or on LinkedIn and ask about their challenges. Then, you can study the skills you need to be able to provide that service.

If you’re still confused, just try each of the ideas above and see what works best for you.

Successful freelancers didn’t start from one point of entry. Some have opted to start with easier services and specialized later on. Some also researched their ideal market first and gained a skill to offer.

Takeaway: If you want to become a freelancer, you have to know what services you should provide. If you think you don’t have specialized skills, you can start offering simpler services like virtual assistance, customer service, or writing and editing.

What freelancing equipment and tools would you need?

The good news is, you don’t really need to have the best equipment to start freelancing.

At the very least, you need a computer (desktop or laptop) and a stable internet.

When I started my freelance business, I was using a 5-year old Samsung Series 5 Ultrabook laptop.

My personal Samsung Series 5 Ultrabook laptop as my old work equipment

Eventually, I bought additional accessories like a Bluetooth keyboard and a mouse to make things more comfortable.

Depending on your services, you might also have to buy additional equipment and tools like:

  • Microphone
  • Extra monitor
  • Extra computer unit
  • Online software and platforms
  • And others

If you don’t have a computer yet and you’re wondering whether to buy a desktop or a laptop, I recommend buying a desktop computer.

Both options have units with high power, efficiency, and storage potential. However, desktop computers tend to be cheaper and more upgradeable than their laptop counterparts.

When I decided to upgrade my rig, I chose to go with a Dell desktop computer with an additional monitor.

Dell desktop computer on two monitors as my new work equipment

I also bought another laptop so I can still work on my business even while traveling.

Takeaway: To start freelancing, you will need at least a computer and a stable internet. If you’re still about to buy a computer, choose a desktop computer since it’s cheaper and more upgradeable than a laptop. Later on, you may need to buy additional equipment and tools for your services.

Do you need samples and portfolios?

Here’s the truth:

Some clients will ask for samples and some will not.

Although it’s not always required, having work samples has benefits. One of them is that you will be able to demand a higher price from clients.

Here’s what I mean:

A client telling me how impressive my portfolio is

Because I already have a portfolio of my past work, which clients find impressive, I’m able to demand premium prices for my services.

But what if you don’t have any samples?

Depending on what you’re offering, you can quickly whip up samples that would fit what your prospective client needs.

Before I had plenty of published articles, I started out by sending clients unpublished articles via Google docs.

If you’re into writing, you can also house your samples of platforms like Contently. For artists, you can use Behance.

Or if you like, you can also create your own website or blog and house your samples there.

Takeaway: You really don’t need past samples of your work to start earning as a freelancer. But on the other hand, having samples, even unpublished ones, will give leverage on the amount of price you could ask.

How much should you price your services?

This is one of the struggles I had before.

Charging too low doesn’t seem right, and charging too much feels like you’re being too demanding. Some people, to solve this dilemma, let their clients decide (totally wrong).

To better understand how you can price your services, let’s understand first the concepts of hourly pricing and fixed-rate pricing.

Hourly pricing simply means you’re paid for every hour logged in that you worked. If you worked for 20 hours this week and your rate is $10 per hour, your earnings for this week is $200.

Fixed-rate or project-based pricing means you and the client negotiated on a certain price according to deliverables that need to be submitted. If your price of a single infographic is $200 and you finished it within 3 hours, you get paid $200.

Personally, I prefer project-based pricing.

As you become more efficient in your service, you will also need fewer hours to finish it. What took you 9 hours before will now take you only 2 hours to finish.

However, hourly pricing is preferred on other services like VA and customer service. These types of services are more suited for hourly pricing.

Value-based pricing

There’s also another popular pricing system that’s called “value-based pricing”.

It’s a form of fixed-priced basing that’s based on the value you’re providing your client with.

Meaning to say, the more valuable your service is to your client’s cashflow, the higher the rate you will be able to demand.

This system is usually used by marketers as it makes sense to their service.

For example, an email marketer who can bring his client an additional $10,000 will not hesitate to charge 10-20% of that amount.

Since clients will be able to earn more, they will most likely agree. They will see you as an investment rather than an asset.

The good thing about value-based pricing is that it doesn’t take time and effort into the calculation. All that matters is the result.

At the end of the day, it will not matter to the client if that email marketer only took 2 minutes to write that email that brought $10,000 to his client.

Minimum hourly price

Hourly pricing is sometimes looked down by others as it’s seen as a less profitable way of pricing.

Not true! However, for hourly pricing to be more effective, you should establish a minimum hourly price based on:

  • Overhead expenses
  • Preferred salary
  • Number of billable hours

Basically, to get the minimum hourly price, you will have to compute the annual salary you want and divide it with the number of billable hours per year.

Here’s a good graphic that shows how to do this:

Computation for the minimum hourly price

Take note that you shouldn’t treat your minimum hourly rate as the basis if you’re quoting per project.

Don’t just estimate how much time it will take you to finish a project and then convert that into project-based pricing.

At the very least, consider scenarios where it might take a longer time than you anticipated.

Or just make up your prices

If you still can’t wrap your head around it, just make up your price.

There are no rules when it comes to pricing.

No one will set you on fire for setting up your own price.

When it comes to how much you want to charge for your services, there’s really no exact formula. There’s no perfect price. What’s important is you and the client agrees on it.

So if you can’t come up with a rate, just make one up!

There’s no need to worry about it too much. You can always change it whenever you want to.

Takeaway: There are two common ways to price your freelance services. One is value-based pricing where you adjust your rate depending on how much value you are giving to the clients. The other one is hourly pricing. For starters, calculate the minimum hourly price you should be asking.

How to find clients?

Freelancing is a business.

As projects come and go, you will need to have a constant flow of clients to your business. Without them, your business will die.

I know — it’s easier said than done.

We are all programmed to relax once we don’t feel any threat. That’s why when you still have an active project, you’re more likely to relax and forego finding new clients.

I should know. I’ve been there.

If you’re wondering where to find clients, here are some places to start:

Your own community

Although we’re talking about working at home, it’s a good idea to look at your community.

Of course, don’t expect your community to automatically know you’re open for business.

Let them know that you’re open for business. Share what you do and how it would benefit them.

For example, when I was still doing graphics-related services, I landed a small gig within my community.

How I landed a local graphics gig

This particular client liked it which lead to further projects.

Repeat project for a local graphics gig

Awesome!

Start informing your community and local friends about your new business.

Post it on Facebook and message them via messenger. Use whatever method is available and get the word out.

Research and outreach

This is one of the best ways to find clients.

The first step is to identify your target clients and find them online.

Where do they spend their time online? Are they on forums? On LinkedIn?

Then, engage them in a conversation, know their challenges, and see how your services may be able to help them. Alternatively, you can straight away tell them your services and if they need one.

Fortunately, most companies nowadays have a strong online presence. You would be able to find most of them online.

But make sure to find the key persons you need to get in touch with.

And once you do, send them an email and pitch your freelance services and skills.

Here’s an example of an email you can send:

Hey John,

I love your blog, especially your article about content marketing.

Anyways, I have noticed that articles related to blogging do quite well.

I actually have a few ideas I would like to pitch to you if you’re interested.

By the way, my name is Joe and I help marketing agencies like [agency A] and [agency B] increase their website traffic through content marketing.

If you’re interested in knowing more about my work, check out these links:

[link 1]
[link 2]
[link 3]

Let me know your thoughts.

Regards,
Joe

To increase your chances of getting business, research the company and key person first and think how your service would benefit them.

Social media

Is it possible to find clients on Facebook? LinkedIn? Twitter? Or even Instagram?

This might be perplexing for others — but you can absolutely find clients through social media.

There are two ways to do this:

  • Build your authority and online presence and wait for offers/connections/messages
  • Actively seek out potential clients

For example, after updating my LinkedIn, I have been receiving messages like this:

Freelance service inquiry message in LinkedIn

You can also use a research and outreach strategy on social media.

For instance, you can find groups on LinkedIn or Facebook where your clients hang out. Then, you can send them a message and pitch your services.

Here’s a screenshot of a conversation I had on LinkedIn with a client:

Reply on LinkedIn from a prospective freelance client

Nice!

Note that using social media to message clients and using email tactic is quite different.

On social media, you have to be genuine, sincere, and respectful. Don’t throw a fit if a prospect will not accept your friend request or reply to your DM.

Takeaway: The world will never run out of clients. To start your freelance career, try finding clients on your community, on social media, and anywhere online. Best place to find them is on freelance platforms.

Start with freelance platforms

Using freelance platforms is a good way to find clients.

Unlike doing any outreach yourself, the clients in these platforms are already searching for freelancers. All you have to do is get in there and find the right client.

But be careful when finding clients from these platforms as there are many low-ballers and scammers out there.

Here are examples of platforms you can use:

Upwork

Most people who want to start working at home have probably heard of Upwork.

After all, it’s one of the most popular freelance platforms out there and houses the most number of legit freelancers.

As of 2018, it’s estimated that there are at least 16 million freelancers in Upwork (Vox).

Yes, it’s pretty tight in there. This led Upwork to regulate new freelancers which resulted in some having problems in getting their profiles approved.

Related: How to get your Upwork profile approved

Finding freelance clients in Upwork is similar to how you find full-time jobs from job sites:

You pick a job posting and submit a proposal. When a client likes your proposal, he will send you a message and set up an interview.

An example of a job posting on Upwork

Like I said earlier, there are a lot of low-ballers and scammers even on Upwork. Some even question if Upwork is still worth their time and money (it is).

When choosing a job, always check the following:

  • Client’s history
  • Feedback to clients
  • Average hourly rate paid to see if it fits your rate

At the same time, you will have to practice common sense.

Once a prospect asks for money as a prerequisite as a condition for work, that’s surely a scam.

Related: Upwork review: What is Upwork?

Fiverr

Fiverr is another freelance platform that’s a bit different from how Upwork works.

In Fiverr, you create gigs. Then, potential clients will send you a message.

Your gigs will then appear on the feed when a potential client searches Fiverr.

Like this:

How the gig feed in Fiverr looks like

In some aspects, waiting for potential clients to contact you isn’t a good idea.

But once you start getting clients and receiving excellent feedback, finding more clients becomes easier as they will be the ones who will go to you.

FreeUp

FreeUp is the new kid in the freelance town.

Though it was built only during 2015, FreeUp grew quickly and became one of the most reliable freelance platforms.

Unfortunately, not everyone is accepted in FreeUp.

That’s because they have an internal team that recruits, interviews, and vets hundreds of freelancers. According to them, only 1% of applicants are accepted.

Who is the top 1% according to FreeUp?

From experience, as long as you know what you’re doing and you can put it into words, you will be fine. After you sign up, they will set a non-voice interview with you and ask you about your offers and experience.

Honestly speaking, you will like have more difficulty getting approved on Upwork than here.

Skill-specific sites

There are still other sites and platforms out there you can use. There are even sites for specific jobs.

Here are some of them:

Writing

Design and graphics

Virtual assistant

If you’re offering a different service than the ones I have listed above, there may be platforms out there specifically designed to help freelancers like you connect with clients.

Takeaway: The easiest and fastest way to find clients is through freelance platforms like Upwork, Fiverr, and FreeUp. There are also other websites that post jobs to specialized freelancers. But most likely, you will be able to find all sorts of freelance jobs on the three freelance platforms mentioned earlier.

How to get paid?

If you’re using freelance platforms, getting paid is easy. Those platforms have their own payment features.

For example, in Upwork, clients have to register their credit cards first. Then, Upwork will bill them directly for any work done by freelancers.

Any earnings you gain will be displayed on your account and will be sent directly to your bank account.

Adding a payment method in Upwork

But what if you’re not with these platforms?

Easy! All you have to do is use payment services like PayPal or Payoneer.

Currently, PayPal is the most popular online payment tool in the world.

As of the 2nd quarter of 2019, PayPal has more than 286 million active accounts (PR Newswire).

In addition, PayPal has an invoicing feature you can use to quickly ask your client for payment.

Get paid fast (PayPal Invoicing)

Payoneer is a popular PayPal alternative known for its higher exchange rate.

Similar to PayPal, Payoneer has a payment request feature:

Request a payment (Payoneer Invoicing)

Personally, I recommend Payoneer than Paypal.

I use both and in terms of conversion rates, Payoneer has the advantage. But I only recommend it if you transfer amounts that are higher than $200. If less, use PayPal.

Takeaway: Getting paid is easy especially on freelance platforms. There are also payment services like PayPal and Payoneer you can use to get paid.

Start your freelance business now

That’s it for the freelance business starter guide.

I hope you will be able to take action from what you learned and kick-off your freelance career.

It might be a bit bumpy at the start. But as you get the hang of it, things will get easier and smoother.

My number one tip is to keep on finding clients. Even if you have 2 active clients, continue your marketing efforts.

Aside from having a steady stream of projects, you will also have better choices in case you decide to expand your business in the future.

Now it’s your turn. I’d like to know your thoughts.

  • Do you have any questions on how to be a freelancer that’s not discussed in this article?
  • What do you think about freelance platforms? Do you find them reliable?

Let me know by sharing your comment down below.

About Alan

Alan helps different companies generate more qualified leads and increase their sales by educating their readers with strategic content and writing blogs. He's also the founder of Work Pajama.

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