Freelance work can be a great option for many reasons. It provides flexibility, control over the types of projects or clients you take on, diversity in the types of work and people you work with, and in many cases more money. When you have the right foundations in place, a thriving freelance business is possible.
Here are 10 things to consider when going freelance.
Clarify the nature and scope of the work you will perform
It is important to review your areas of expertise. Once you have done this, be sure that you carefully inform clients as to the boundaries of your skills so as to create reasonable expectations.
Set pricing
Pricing your work will require research into the going rate for the type of projects you plan on building your freelance career around. It is also important to determine if the type of work you do is usually billed on an hourly or project basis. If the industry has particular expectations regarding how client billing is done, it might be important to remain inside of those norms. However, it can be beneficial to offer a different form of pricing as it could set you apart from your competitors. Regardless, the most important factor is to be sure that you pricing strategy is one that the market can bear.
Identify your target market and their needs
Who will you be targeting and how can you best serve them? To identify your target market’s needs and desires, you may want to consider offering prospective clients a new client questionnaire, or a free 30-minute telephone consultation. This type of initial information gathering will protect both you and the client by generating an opportunity to explain your expectations. If, during the course of gathering this type of information, you or the client discover that the services are not a good fit, it will be easier to move on to another prospect.
Develop a marketing strategy
No new business can survive without proper marketing and promotion. And, while this can take many forms, it will be important for you to figure out which form will reach your target market. For example, does the industry you are targeting have a trade magazine? Are they partial to social media? Would your work be best demonstrated by using brochures or a website? All of these options can garner attention and draw clients to you. Utilising past clients or colleagues as references can also add a credible dimension to your marketing.
Secure finance
Every business needs to have finance. Even if your business on the surface seems low cost, don’t forget to factor in the costs associated with bookkeeping, invoicing, banking, marketing and insurance. Make sure you have cash reserves to hold you over until you can turn a profit.
Manage billing and taxation
To fully protect your freelance business, it is important that you have a method for consistent billing, collections and taxation. In addition, it is important for your billing to give the client a description of the work performed or the amount of time it took to complete the project if required. If you bill on a project basis, then it is imperative that you define how you reached the lump sum fee for the project. If you are registered for GST, make sure your invoices charge GST and are compliant.
Leverage software
Since you will be expecting to handle multiple projects at once, software that organises your project inventory may be beneficial. The type of software a freelancer might need for business organisation will vary according to the type of work they are doing. Having a system in place will diminish the probability that a project will get lost in the scheduling. Hence it will help you protect your reputation of being reliable and timely in completing your freelance assignments.
Organise superannuation
Freelancers paid mainly for their labour (such as on an hourly basis) are considered employees for superannuation guarantee purposes. This is the case even if you have an Australian Business Number (ABN). As a result, you may need to charge your client for your superannuation. Do some research to figure out whether this applies to your circumstances. Even if this doesn’t apply to you, you should make sure you are contributing to your superannuation to cover yourself in your retirement.
Establish contracts
All freelance work should include a contract that informs the client of the terms and conditions of the work. The contract should include an offer of services, an acceptance of the same, captured in writing that is signed by both parties. In the event that there is a dispute involving quality, expectations or payment for services rendered, the contract can be used to show the parties were fully informed and in agreement prior to the work being performed. The best way to protect yourself and your freelance business is to engage the services of an attorney to assist you in drafting a proper contract.
Get insurance
It is imperative to secure the proper type and amount of liability insurance to protect you against claims of negligence or a lack of meeting the industry standards. Liability insurance will protect your personal assets and be responsible for making any payment to a client that has been found to hold a valid claim against your work. While no one wants to find themselves embroiled in either contract or liability issues, it does happen. Speak with an insurance agent who can explain your options for the coverage you may need.
