The 8 Most Common Freelance Questions (With Answers)
Posted February 16, 2009 in Business, Lifestyle 51 Comments »
This post is a direct follow-up to the open thread we ran last week where we asked for your freelance questions. We said to pretend that there was a panel of freelance-gurus who could answer anything about freelancing, and then asked you to post your top question in the comments.
While we don’t really have a panel of freelance gurus over at FreelanceFolder headquarters, we’re at least going to take a shot at answering some these questions. As forewarning, we’re probably also going to rely heavily on the community and other articles to help out with the answers :-)
Here are the 8 most common questions from our open thread, along with their answers:
1. How can I get new clients?
This is a tough question to answer, because different types of freelancers find clients in different places. The best place to find work is often referrals, but of course to get that far you have to have a number of paying clients already. To find clients as a brand new freelancer it’s often a good idea to look at some of the various bidding sites, or to try out cold-calling or cold-emailing.
For a look at how nearly 50 different freelancers get their clients, check out our open thread about where freelancers find clients.
2. When should I start freelancing?
This answer is going to vary significantly with your individual situation, but I think the overriding wisdom is that if you want to be a freelancer then you should probably get started right away.
Marc, from WelshScribe, answered this question well in the open thread. He said:
“Best time to start is now (I learned this the hard way). No matter what you think of your skill set I can guarantee that you: a) know more than someone out there, and b) can do something for someone who doesn’t have the time to do it themselves
3. How can I develop the skills required to start?
Similar to the question above, this question will depend on your situation. For most freelancers, the biggest difficulty is the confidence and not necessarily the skill. The best way to increase both confidence and skill level is to regularly practice and learn, and to get started on some client projects immediately. Until you start working with clients you will always be wondering whether you have enough skill to make them happy.
Once you’ve spent some time on a few client projects, you’ll quickly realize that you can always (and should always) increase your skill levels when you need to — the biggest difficulties in freelancing aren’t usually due to lack of ability. In short, get out there and give it a shot. If you are really nervous and unsure of yourself, try doing a few pro-bono projects before charging.
4. How can I make people respect my work and time?
This is a tough question. Not because it depends on your situation, but because it can be just plain difficult to gain respect as a freelancer. There are a lot of negative impressions floating around, and rising above that takes hard work.
The best thing you can do is stick to your own goals and desires, and ignore the naysayers. When you finally have the money to travel around the world, and the flexibility of a job you love, then people will probably start to respect what you do. Of course, by that point you probably won’t care anymore :-)
As far as getting clients and family to respect your time, it comes down to a single thing — saying no. I think Melek from ek media said it best in the comments:
“When you start saying NO people will start to respect you and begin to understand that your time is worth money. Trust me, saying NO is VERY liberating. Plus, you free yourself up to do paying gigs, and isn’t that what you want?”
If you turn down clients, or refuse to do work that you don’t want, then you will quickly have clients who won’t waste your time. The same thing will happen if you refuse to do housework and errands during work hours — be warned, though, that you need to be consistent about it. (Disclaimer: we take no responsibility for husbands who stop doing their chores as a result of this comment.)
5. Should I create a corporation, and what kind?
This one has a pretty easy answer, at least to the first part of the question. Yes, you should probably start a corporation. You can get more protection for your personal assets, and you can generally save money in taxes with a corporation.
The type of corporation you create will greatly depend on what your goals are for your business. In the US, the two most common types of corporations for freelancers are LLCs and S-Corps. Both are called “flow-through entities,” which means that you still only pay personal taxes (no double taxation). With both of these corporate types you still have liability protection and the ability to write-off certain business expenses.
If you aren’t in the US, chances are good that your country will have a type of corporation that is similar to one of the above, and will pass on your income to your personal tax form while still giving you liability protection.
6. Where can I get good health insurance?
There are a few different health-insurance options available for freelancers, most of which depend on your own personal health and desired levels of coverage.
For those of you who are very healthy and are looking primarily for emergency-only coverage, there’s a good chance you can find cheap insurance through one of the online companies like eHealthInsurance.
For those who are looking for better coverage, the best option is usually to join a group that will allow you to register for group rates. Chambers of Commerce are a great option, and almost all of them have decent plans available. There are also other groups and unions that offer similar benefits.
For an awesome explanation of all of this, check out this post on FreelanceSwitch.
7. What’s the best invoicing or accounting software?
We just happen to have to of the best services advertising on our site :-) Both Freshbooks and IAC-EZ provide excellent options for freelancers, Freshbooks in the invoicing department and IAC-EZ for accounting. Aside from these, there are many free services available if you’re willing to browse the web for a bit. For freelancers who need a more powerful, software-based, solution, the ubiquitous QuickBooks is a great option.
There’s also a full chapter dedicated to accounting and invoicing in The Unlimited Freelancer, so if you’re looking for some more information about the topic you might want to check it out.
8. How can I go from low-paying jobs to high-paying jobs?
Going from mostly low-paying jobs to mostly high-paying ones isn’t as much of a jump as it is a gradual climb. Start by building confidence in yourself and your work. Then, get a good understanding of the marketplace and what others charge. Finally, when you’re ready, gradually starting raising your rates and looking for bigger jobs.
Sometimes all it takes is shifting your mindset. Once you’ve made the mental commitment to freelancing for higher-value clients, then you just have to go out there and do it.
Do you have anything to add?
This thread was born out of a collection of excellent comments, so there’s no reason we should stop here.
Did we miss any big questions? Do you have information or advice to add on to our answers? Share your experience in the comments.
About the author: Mason Hipp is an entrepreneur, marketing guru, and writer. He blogs about life and business at FreelanceFolder.com and is co-author of the Book The Unlimited Freelancer. Follow him on twitter @MasonHipp
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51 Comments
RM Cotton
February 16th, 2009 at 6:29 pmIf you need time-tracking, invoicing, and accounting software, you should totally check out Cashboard.com. I love these guys! Seth is always adding new features and HE LISTENS!! Yes! Listens! Imagine someone giving you what you ask for – amazing!
Jon Bergan
February 16th, 2009 at 6:49 pmCouldn’t agree more with these. A lot of good pointers for new startup freelancers.
One thing I would suggest to new freelancers is that they consider business networking as a means of finding new clients and building business relationships. These networking events can be found everywhere and there is usually a few on per month. Get out there, get your name known and you’ll start meeting new clients in no time.
Good post, Mason! Really liked this one. :)
Marc - WelshScribe
February 16th, 2009 at 6:50 pmI thoroughly enjoyed these posts and would just like to add to number 8. Part of the mindset needed to get higher paid jobs means shifting away from the time = money mentality specifically charging by the hour.
Instead we should be thinking more along the lines of charging by the value we bring. I do emphasise we as I am far from accomplishing this myself.
Melek
February 16th, 2009 at 7:32 pmAnother great place to get health insurance is NASE – National Association for the Self Employed – http://nase.org/ I tried Humana and Blue Cross/Blue Shield as an individual, but the rates were outrageous (unlike the coverage which was less than notable). With NASE, you’re part of an organization, so it’s like having a group rate. Better coverage, no copays (in my plan) for routine checkups. i can even add on dental or vision for a few bucks a month. Good times!
Thanks for the shout out on #4! :)
AthenaEmily
February 16th, 2009 at 7:56 pmGreat write up and very useful tips for freelancers to start their work
Thank you!
I agree, confidence is very important!
Lexi
February 16th, 2009 at 10:31 pmThanks for organizing the answers to the open thread into this post.
I’d like to add something about respect. I think we get respect for what we do when we ourselves respect our freelancing business. For example, when I started freelancing, when someone asked me where I worked, I would reply that I’m a stay at home Mom. It took a couple of months before I could say, “I work at home. I’m a freelance copywriter.”
That’s when people started taking my work more seriously too.
Mason Hipp
February 16th, 2009 at 10:37 pm@Jon — Local business networking is a GREAT way for new freelancers to establish themselves. When I was just starting out I got the majority of my clients from this, and I still get referrals from the contacts I made.
@Marc — That’s a great point, and is actually something I talked about a ton in The Unlimited Freelancer. Time = Money can be very limiting for freelancers, and once you get past some of that the whole world seems to open up :-)
@Melek — That’s a great resource, thanks for the heads up.
@Lexi — BINGO, you got it exactly. When you begin to respect yourself, and hold your own self-esteem very highly, people will begin to do the same. And if they don’t, it won’t matter.
Thanks for all of the comments!
Jon Bergan
February 16th, 2009 at 11:12 pmMason,
Most definitely! As did I! Its a fantastic way to not only meet new clients but to build some solid relationships with your local business community. A lot of the work we do now a days comes either directly or through people I’ve met at such events. Definitely worthwhile.
JB
George
February 17th, 2009 at 2:08 amReally liked the post. It is unique and the content is groovy. For people who are looking for invoicing softwares, I would like to suggest zoho invoice as it has some good features and if someone is looking for inexpensive and feature rich application then I would suggest http://www.invoicera.com/.
cheers
George
Marc - WelshScribe
February 17th, 2009 at 5:15 am@Mason I’m actually re-reading your book now. You and James have done an excellent job on it.
@Lexi You know, now that you mention it I still tell people what I do as a part time job even though it’s all but dead in the water! Talk about a lack of self-respect! Thanks for the wake up call :)
On the note of networking. I found a great list of niche social networking sites. I’m thinking it would be a good idea to find and join the ones related to your niche and spend about 30 minutes or so a day on there, no?
Craig
February 17th, 2009 at 10:34 amI’ve been thinking a great deal about beginning a small home writing/editing business. One thing my brother told me I should do right away is to open an LLC, to limit personal liability. Where can I do to learn more about LLCs, to decide if this is the right way to go, and how to do it correctly?
JohnONolan
February 17th, 2009 at 10:54 amAwsome post! I will be including this in my weekly freelance link roundup tomorrow :)
Mason Hipp
February 17th, 2009 at 11:29 am@Craig — there’s a decent checklist of steps to take here: http://smallbusiness.findlaw.com/business-structures/llc/forming-llc-checklist.html
Alternatively (and recommended) you can go to a company like http://www.bizfilings.com/ and for a fee they will do everything for you.
Craig
February 17th, 2009 at 12:19 pm@Mason – Thanks for the links, Mason.
Chase Campbell
February 17th, 2009 at 1:26 pmGreat article! The power of a positive NO can really do wonders. I couldn’t agree more. Check out http://www.graphicdesigntwist.com for some more good reading on all things creative including a new article about attracting clients in a down economy.
James Kurtz III
February 17th, 2009 at 2:20 pmGood advice for starters.
IslandDesign
February 17th, 2009 at 2:59 pm@ Craig – I think http://www.entrepreneur.com is one of the best resources out there for small business owners like us. It has been a very helpful resource for me.
Also, Intervals is a great project management and invoicing system rolled into one. http://www.myintervals.com
Craig
February 17th, 2009 at 4:20 pm@IslandDesign — Thanks for the link. I have bookmarked it.
Calvin
February 17th, 2009 at 7:06 pmGreat post.
Really appreciate this post and last weeks one.
thanks to ALL the answers, comments and post wise.
calvin-t.co.uk
Isabel Gil Pereira
February 18th, 2009 at 4:44 amThis is a very good answer for the previous post http://freelancefolder.com/open-thread-if-you-could-ask-one-question/, no doubts about that. Is just missing to answer to one of my questions:
- How can I obligate myself to make a lunch break? :)
I thought about setting my alarm to 1pm everyday but until now it’s not working! :D
Keep going! Thanks for helping so much!
Marc - Welshscribe
February 18th, 2009 at 7:23 am@Isabel Why isn’t it working? Are you ignoring it? Sounds like you have a serious case of “someday syndrome” Try the following articles:
Overcome procrastination with self talk and How to cure someday syndrome
Pat
February 18th, 2009 at 11:14 amGood overview for newbies–well done!
I’d like to expand what Lexi and others said about having respect for yourself and your work leading to being respected by others. I find that people treat me differently, and I have a different mindset myself, if I say that I’m self-employed or that own my own business rather than “I’m a freelancer.” There seems to be some lingering negative connotation with that word that implies I don’t take my work seriously somehow.
I also wanted to mention two sites that have tons of free general info and other resources for folks just starting out:
SCORE – http://www.score.org/index.html
Small Business Administration – http://www.sba.gov/
Finally–thanks, Melek, for the tip re: health insurance. I’m always looking to cut costs, if I can!
logo design guru
February 18th, 2009 at 4:01 pmlooks like some good questions and answers here. Thanks, its very helpful.
Justin Long
February 18th, 2009 at 7:35 pm@Isabel I have to agree with Marc that is something that you just need to do. I know it is so easy to just say I will take it in a few minutes but those few minutes never come. If you still can’t help yourself you can download a couple of applications that basically lock up your computer screen for XX amount of minutes. I find those applications annoying and counter productive myself but if it helps you get into that mindset then I would say go for it.
@Craig Legalzoom.com also would be able to help you with getting an LLC or S-Corp or really any legal form.
@Mason I love the article but for #8 I would include the latest blog post into how to get higher paying clients. I will always pay multiple people more to do something specific things if I know they are great at it then pay one person to less to do everything and not produce a half-rate product. That goes the same for your customers. Become an expert and your rates will jump up
Craig
February 18th, 2009 at 8:54 pm@Justin — Thank you. I will look up LegalZoom.
tim
February 20th, 2009 at 6:27 amGreat post, I discovered this site only yesterday and am loving it so far! Keep it up :)
Craig
February 22nd, 2009 at 2:24 pm@Mason – You said *Alternatively (and recommended) you can go to a company like http://www.bizfilings.com/ and for a fee they will do everything for you.*
If I might ask, who recommends bizfilings and why?
I have gotten the nod from my wife to use our tax refund to set things up (Yay!), but I want to make sure I do things right the first time.
Jared Walker
February 23rd, 2009 at 3:22 pmI agree with what Jon and Mason have said–networking is a great way to get contacts and clients. Just introducing yourself to people and letting them know what you do can lead to jobs. I’ve gotten work in the past by networking with developers. Developers a lot of times don’t like to design, so they’ll pass off their design work to me. Works out great for both of us.
scott
February 24th, 2009 at 2:22 pm5. Should I create a corporation, and what kind?
Everyone says yes. — I kind of disagree.
Here’s why. K.I.S.S. = Statistics state that most small business start-ups fail. That’s what a freelancer is a small business start-up of one. The smallest business of all. Now, Instead of getting hung up on LLC vs. Corp. Why don’t you just do business as a Sole Proprietor. It’s easier to start and easier to end. Liability is an issue, So, take a a personal business liability umbrella policy under your home insurance.
Do this for a while, and if you think freelancing is for you and you want to continue after a couple of years, then convert to a tax-saving LLC or S-Corp.
One drawback, you pay more taxes as a sole proprietor. So, that might not make you as profitable. Yet, you pay less in corporation filings, legal fees, etc. It might balance out.
Michael Kimsal
February 24th, 2009 at 3:12 pmOn subject of pricing, I’m using a service called http://factorhub.com which has helped me to get a grip on how I come up with pricing for projects. It doesn’t do all the work for me, but does give me a way of thinking about pricing and organizing my thoughts. It’s not free, but pretty inexpensive ($10/month I think, no long term commitments).
Justin Long
February 24th, 2009 at 3:19 pm@Scott
The cost for getting a LLC is $149 at LegalZoom.com which will pay for itself in the tax benifits along with not having to have umbrella coverage through your home insurance provider. Not to mention you can deduct so many things from your taxes including the cost of forming your LLC from your taxes
@Michael
Will have to check that out
Craig
February 25th, 2009 at 10:51 am@Scott – How do I find out if you’re right and everyone else is wrong, or vise versa? Where would I go and who would I ask?
scott
February 25th, 2009 at 1:03 pm@craig. here’s an article that is almost the same as what I have been doing. I have been a sole proprietor for a few years. I am very picky about who I do business with which limits the risk of liability issues. I use Turbotax and/or accounting friends/family to help me with taxes.
http://b.lesseverything.com/2008/9/16/6-tips-for-beginning-businesses
How to find out? Well, Talk to your home owners insurance to see if a home-based consultant can take an umbrella policy out.
Talk to a lawyer about LLC or S Corp vs. Sole Proprietor:
google: Nolo Books
google: legalzoom
But Lawyers, Accounting, and books make money off of you. I have to say the tax-reduction of self-employment taxes is big. So, it is definitely a benefit of LLC/S-Corp vs. Sole Proprietor.
Craig
February 25th, 2009 at 3:08 pm@Justin – Thanks for the followup. *The cost for getting a LLC is $149 at LegalZoom.com* What about state filing fees? I know they vary greatly. Is it $149, period? Or is it $149, minus state filing fees? In PA, they’re not too bad. In CA, they’re outrageous.
Craig
February 25th, 2009 at 3:20 pm@Scott – Thanks for the feedback. I went to the site and printed out *7 Accounting Tips for Beginning Businesses* to read later. Much food for thought.
Scott
February 25th, 2009 at 3:29 pm@Justin, agreed it is relatively inexpensive (be careful about the prices, the prices quoted do not include everything at the state level nor the federal level to make sure you fulfill the business requirements. Some forms are negligible and can done yourself, but there are more steps and costs money if you let legalzoom do it.)
The thing is you’ll likely still need an insurance policy, now you’ll just need it for you business. The difference is if you get sued, an LLC and S-Corp protect you from personal property losses. The insurance policy is there in case you have losses to prevent your business from going bankrupt. Either way, insurance is probably a good idea. the fact that you have an LLC or S-Corp, does not mean you can’t get sued and lose all the business assets. In fact, if you don’t keep up with the requirements of an LLC or S-Corp, a good lawyer can say you didn’t have an LLC / S-corp in the first place and still go after your personal assets especially when it is a one person business which freelancing is.
I am not a tax expert, however, as I understand, you can deduct most of the same things as a sole proprietor as you can an LLC and Sole Proprietor. The difference is the tax savings, because as a Sole Proprietor you have to pay self-employment taxes which you don’t pay as an LLC/S-Corp. However,as sole proprietor you do have annual requirements to meet as an LLC / S-Corp. You also must keep your finances separate.
All I am saying is a Sole Proprietor when you first start out may be a better answer. It is easier to form, it is easier to deal with finances, and it is easier in tax paperwork and can be done by yourself. It is more simple. Sometimes Simple is better. Get Started making money. Do the work (marketing, billing). If you are still around after one year, re-evaluate. Does the simplicity make sense for you?
Long-term: As I just said: the tax reduction of self-employment taxes more than makes up for the costs of LLC / S-corp. It is a little more complex.
Scott
February 25th, 2009 at 3:42 pmOne more thought:
Having given my thoughts on why new businesses might want to stay as a sole proprietor rather than a LLC / S-corp for simplicty.
If you want an LLC/S-corp: Here’s a place to get incorporated for free until Feb 28. They’ve run this promo a couple of times, so don’t run into it just because of the promo, wait until next time.
http://mycorporation.intuit.com/promotional_offers/
Amber Weinberg
February 25th, 2009 at 11:13 pmGreat tips! Networking is very important as a beginning freelancer. One should try to make as many friends and colleagues in the field as possible, you never know when someone has runoff work so keep your name in front of them as much as possible.
Brad
February 26th, 2009 at 12:27 pmNice post Mason. The point about going from low to high paying jobs is good. That can be a tough idea for anyone, and it helps to know that you plan to go higher the longer you are around and the better you get. If you are not thinking that from the beginning you can get trapped working in the small, time-draining jobs and clients.
Justin Long
February 26th, 2009 at 1:25 pm@Craig you are right it is $149 + State Fees I meant to say that in the post but I forgot. There is nothing that says that you have to form a LLC or an S-Corp in the state that you live in. For example forming an LLC in Nevada has better tax benefits then filing one in Florida.
Paul
February 26th, 2009 at 7:45 pmI wish I had found this article a year ago. Great information. I really agree with 2 and 3 and just figured out 4 the hard way. Thanks for the article.
FYI don’t know if it was on purpose or not but submit button for comment doesn’t show up in IE 6.
Craig
March 5th, 2009 at 8:40 pm@Scott – That’s a fantastic article you posted. I am re-reading it. Here’s another question. I am also going to surf around for answers, but you have a very practical view of things, so I figured I’d ask you, too.
What is the difference between a Sole Proprietorship (which I had decided upon) and a DBA, (which I just read about and confused me a bit).
Jane
April 2nd, 2009 at 5:13 amgreat article! I agree on 1-4. Am still building up that confidence and skills. Especially saying no to other people who need help in design.
But anyway, I’ve got a question to add: How to juggle time between full-time work and freelance?
(I read it somewhere that as a starter in freelance, we still need to have a full time job first, just to cover up the bills until we have the confidence to go solo)
Kaiser Permanente
January 5th, 2010 at 9:54 pmI’ve been thinking a great deal about beginning a small home writing/editing business. One thing my brother told me I should do right away is to open an LLC, to limit personal liability. Where can I do to learn more about LLCs, to decide if this is the right way to go, and how to do it correctly?
Craig
January 9th, 2010 at 9:57 pm@Kaiser Permanente –
I would visit this page and read it:
http://b.lesseverything.com/2008/9/16/6-tips-for-beginning-businesses
The basics:
1. Form a sole proprietorship
2. Buy a personal liability umbrella policy
Seems easy, cheap, and safe.
Ron Arts Web Design
January 27th, 2010 at 7:32 amNice content! It is a good information for new start up freelancers. Thanks for sharing this post.
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