Lots of people see the benefits of the Freelancer lifestyle, but few attempt to do it properly. This is how.
In order to make it easier for you, we’ve created the Definitive Guide that will lead you through the process of creating you own business. This isn’t just going to be an adventure, it’s going to be YOUR adventure.
Quitting Your Job
If you have enough skill to go out on your own as a freelance graphic designer, virtual assistant, project manager, web developer, data entry, logo designer, social media expert, software engineer or freelance writer, photographer, videographer or any other creative or business skill like freelance writing, then believe me, you can replace any job you have easily.
So just quit.
Be reckless. It’s good for you.
What’s the worst thing that will happen? Save up 3-6 months money and quit. If it all goes to hell in a handbasket then just go get another job. You can probably just go back to the job you left in the first place if you really wanted to.
If you’re really worried then just get on a job site, spruce up your CV, add “freelancer for 6 months” to it and go and apply for jobs and see what kind of response you get. Once you’re confident that you’re not going to be homeless 4 minutes after you hand your notice in, then you can quit your job knowing you’re all good.
It’s worth a punt if you’re still cautious, but in the process of quitting and planning your long term freelancing career, why not offer to go part time, to do 1 or 2 days a week, to work on flexible basis, or working from home only, while they find someone else? Best of both worlds if they say yes. I would encourage you to be bold here, stand up tall and make big but reversible decisions. Your future self will thank you for it.
Take a Loan
I believe that once you’ve won your third client, you’ve done the work and they are happy, you should go to the bank and take a $10,000 loan. Now, this loan is to protect you from crappy clients and work for free.
The spiral of doom with the freelancing business is working for next to nothing, or being beaten down on price, and you take it just because you have no money and need to be getting paid.
Here’s a quick story in my life, when I worked freelance. I had a bailiff turning up at 4pm to collect £500 (around $1,000 in those days) or take my TV from me. I was fine seeing the TV go, I barely had enough electricity on my electric meter to run it anyway, but I wanted to pay the debt back. I somehow had managed to scrape a meeting with a guy that wanted an online shop at 11am that day.
I remember sitting in that meeting listening to this guy thinking “I know this is the worst type of client to take on, but I have no choice. I’ve got to close him today”. So I went through the meeting, did the dance and took the £500 deposit, walked 6 miles home and handed the bailiff the money.
That shouldn’t have happened.
The $10,000 loan is not for marketing or paying off debt. It’s for something far more important. It will act as a buffer, there to keep you from taking bad quality clients on. We will later cover exactly what a bad client is and how to avoid them.
Look at it like this. If you take on 3 clients in your first month at $1,000 each, that might seem decent but you’ve condemned yourself to that kind of work. If you quote $5,000 to your first 3 potential clients and they all say no, but the 4th one says yes, you’re up financially with well paid work, and you have a better quality client.
Trust me when I tell you this is the way forward. The money is to keep you going while you’re saying no to rubbish clients and freelancing jobs.
Registering your company
Disclaimer: I don’t know where you live, this is not legal advice and it’s not accounting advice, so get the advice of a qualified professional.
That said, most of these principles will likely hold true no matter who you ask. There is absolutely no point whatsoever in setting up your business properly with bank account, legals, taxes etc when you have no idea if you can even pull it off.
My advice is to take on 3 clients, or get to $10,000 of business sold before you even think about setting things up “properly”. It’ll just be a distraction you can do without. That said, keep the invoices you generate and keep all receipts for what would be business expenses be it physical kit, travel, software management tools, business cards, other freelancers.
Once you’ve done that, you can always backdate your sales so I’m not suggesting tax dodging here, I’m simply saying set it all up later.
When it comes to actually doing this, do it properly and get an accountant where you live. There’s no exception to this rule.
Everyone is put in a bucket, which do you belong in?
Human beings process so much information it’s unfathomable, but there’s also a lot that can be very quickly forgotten, because it’s not important. What colour was the front door of your second house? You knew at the time but can you remember now?
That is your selective focus at work. We do the same thing with people. It’s too difficult to actually analyse a person’s credentials, their skillset, their ability to get results so we have buckets in our minds and we’re looking for little signals to almostly instantly determine which bucket to put people in. This is where the phrase about first impressions mattering so much comes from.
Let’s say those buckets could be “business newbie”, “average freelancer” and “mini celebrity I can’t afford”.
Now, if you roll up to a situation and give off a poor impression, you have a weak handshake, you don’t control the meeting, you don’t have clients – all these things very quickly lead to you being put in the business newbie category.
How does a business newbie get treated by business owners? They get negotiated down, made to chase up or downright ignored, and beaten down until a good deal is secured against their favour. Not what you want.
The objective is to get yourself in the mini celebrity bucket so your prices are accepted, high as they are, and you are not questioned. In other words, you are accepted as an authority. It’s a process of building yourself as a businessman. We’ll tell you more about that in Part 2, stay tuned!