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Whether you desire to be your own boss or simply want to generate a little extra income in addition to your day job, freelancing is a great option for those who are independently motivated. According to Business Insider, there are over 17 million freelancers working in the United States. While the flexibility that comes with freelancing is great, it can be tough to stay on top of everything. Taking measures to set professional boundaries, organize your finances, and develop good relationships with clients can make all the difference in a competitive market. Here are some tips to help you get started.
Set office hours.
This strategy is essential for maintaining time management. Once you decide on a schedule, don’t compromise it for anything. It may be tempting to give in to distractions, especially if you work from home. Resist this by dedicating a space, either in your home or somewhere else, exclusively to work. Show up at your workspace at a specified time every day, the same way you would an office. Consistency will help you get into the groove and look good to your clients. Ultimately, establishing a routine is as much about you as it is about making sure work gets to clients on time. When you set specific hours aside for work, you’re making a promise to yourself—not only to be held accountable for your professional obligations, but also to make time to enjoy the benefits of your hard work when office hours end. As long as you’re meeting deadlines and adhering to terms of availability previously discussed with your clients, it’s okay to take time for yourself.
Keep a spreadsheet detailing potential and active clients. Use it to track project specifics, deposits and payments, terms, communication, and dates. You can refer back to the spreadsheet easily when following up with clients. Having the information accessible will serve you well when it comes time to collect payments or settle disputes.
You’ll need to send out invoices for all billable services and retain records of each one for tax purposes. At the top of your invoice include your business name, full name, street address or P.O. box, phone number, and email address. Number your invoices in sequential order to help you keep track of them. Below your contact information and the invoice number, write your client’s name and contact information, and itemize all goods and services. If you’re charging an hourly rate, list a breakdown of your hours here as well. At the bottom, include a total fee and due date, as well as a list of forms of payment you’re willing to accept. If the process of creating your own invoice seems daunting, several online invoicing services and templates are available.
Build project management into your fee.
Sometimes figuring out the logistics of a project can take nearly as much time as execution. If you’re working on something that requires a lot of project management, meaning time spent planning, emailing with clients, organizing, or gathering assets, you deserve to get paid for it. Establish terms with your clients ahead of time. Explain what you’re willing to do and where you draw the line (answering emails on the weekends, for instance). They may require documentation of project management to justify the cost, so keep records of all your work—not just what you can quantify with a product.
Put money aside for taxes.
Reputable companies will require you to fill out a 1099 tax form for independent contractors. Keep good financial records detailing every cent you make. As of 2013, the self-employment tax rate is 15.3%. Put that, plus a little extra, aside every time you get paid so you don’t have to scramble for cash come tax time.
A recent article in Forbes stated that being self-employed puts you at higher risk for an IRS audit, so you’ll want to keep receipts pertaining to all deductions for at least three years. Typically, you can deduct anything that pertains to your business, including professional development and certification courses, office equipment, some food and travel, advertising, and even health insurance premiums. Consulting a certified accountant when making deductions is your safest bet, and the cost is often worth it to avoid the hassle of having to do your taxes yourself.
When you work for yourself, every interaction between you and potential clients matters. You won’t be able to hide behind the inherent professionalism of a bigger company, and that’s an important thing to keep in mind as you move forward. Try to answer emails as soon as you receive them, and pay attention to little things like syntax and grammar. Be open to negotiations, especially if what the client is proposing is reasonable. As with any working relationship, communication is key. Present your terms clearly and courteously. Clients will appreciate you being up front with them, and be more likely to think of you next time a job comes up.