With over 54 million Americans opting to forego traditional careers, in exchange for the risks and rewards of working remotely and starting a freelancing business, we’re seeing an unprecedented shift in the way companies function around the world.
Hiring freelancers is becoming not only more acceptable, but more attractive for many businesses. This creates an incredible opportunity for people with useful skills to start a freelance business on the side, and eventually grow that into a sustainable self-employed career.
Fewer taxes, lower employee-related expenses, no healthcare, less office space, the list goes on. These are but a handful of the reasons many companies are seeking freelancer writers, designers, marketers, and developers to help grow their businesses.
A recent study by the University of Phoenix, polling 1,600 adults under the age of 30, found that 63% of people in their 20’s either own their own business or want to in the near future. Of those who are not already entrepreneurs, 55% identified as wanting to be, one day.
So, how do those of us, regardless of age, who want to be gainfully self-employed go about getting started with our careers as entrepreneurs? Well, choosing to start a freelance business is one of the most feasible, realistic, and attainable side businesses you can start while keeping your day job.
We all have bills that need to be paid, expenses that don’t just magically go away overnight once we decide to chase our dreams.
Why I Started a Freelance Business While Keeping My Day Job
I live in San Francisco, which happens to have one of the highest average rent costs in the US. For me, immediately quitting my day job to pursue my passions is not feasible. That’s why I’ve chosen to get serious about starting my freelance business on the side and building my brand as a freelance content marketer, while I still have my day job to pay the bills.
Since my eventual goal is to work full-time creating more in-depth content and courses for my online community, if I can first transition over to a lifestyle of running a profitable freelance business, that could afford me the flexibility to spend more time working on my online courses in the short term.
In this sense, I view starting a freelancing business as a necessary in-between step in my progression toward getting back to gainful self-employment, on my terms this time around.
Unlocking more of my time, which I wholeheartedly believe to be my most precious resource, means I’ll be able to get my passive income business off the ground much quicker than just squeezing in time around my day job. My freelance business nets me about $2,000/mo in dependable extra income right now, which also goes a long way toward funding my website & course creation.
Because I didn’t want to go into debt or seek outside funding to start my freelance business, I chose to start freelancing while keeping my day job, during my personal time before and after work and on weekends.
That experience (and my previous projects) has taught me an incredible amount about how much hard work it takes to launch a freelance business and to continue delivering high quality results for clients, while bringing in new contracts at the same time. It’s no easy feat balancing working “in” your freelance business with working “on” your freelance business.
Make no mistake, there’s no doubt that it will be difficult to keep up with your performance at the office, and still find the time to put in meaningful work on your freelance projects. But, when you’re running your own freelance business full-time and reaping the lifestyle benefits of hustling your way into self-employment, it’ll be well worth the extra hours right now.
Just ask Violeta Nedkova, an entrepreneur and creative rebel who actively built her side hustle, transitioned out of freelancing, and into coaching & courses–her ultimate goal all along. Was it worth all the work? She says hell yes.
Especially if like me, freelancing for you is a means to getting closer to your self-employed dream career.
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10 Steps to Starting a Freelance Business While Working Full-Time
Before getting started with your freelance business, you need to get very clear on why you want to freelance in the first place. Once you have your goals in mind, how you utilize your limited amount of time will greatly determine your level of success with freelancing.
1. Define Your Goals.
Without clearly defined, easily measurable goals, you're going to have a very difficult time getting to where you want to go.
- Is freelancing a path to just earning extra income on the side of your day job?
- Do you eventually want to become a full-time freelancer because of the lifestyle benefits of being your own boss?
- Or, are you looking to use freelancing as a stepping stone to eventually achieving a different goal entirely?
Regardless of what your ultimate goal is, you need to make it abundantly clear. Take the time to understand why you're considering starting a freelance business, and make sure it's the right move in your progression toward achieving your bigger picture goal.
Only after you have the clarity around where you want freelancing to take you, can you start backing into your shorter-term goals and benchmarks that'll help your freelance business become a success.
Over on the Millo blog, April Greer shares one of my favorite takes on the importance goal-setting within your freelance business, and how to set meaningful goals that move you forward.
Let's say your bigger picture goal is to become a fully self-employed freelancer. You'll set your own hours, decide who you want to work with, and call all the shots in your business. Now, how do you get there?
You know that you'll need to get your freelance income up to a sustainable, healthy level that allows you to eventually quit your day job without stress about where your next paycheck is going to come from. Because I've quit my day job too early in the past, my personal rule is that I now must reach a side income of at least 75% of what my salaried job pays me, before even considering quitting to pursue my side business - full-time.
Starting with your freelance income target, based on your living expenses, risk tolerance, and realistic expectations on how long your savings can sustain you, now you can back into a rough idea of how many clients you'll need (and what you'll have to charge them), before making it to the point where you'll be able to leave your day job to freelance full-time.
2. Find a Profitable Niche.
Let’s assume you’re a graphic designer by trade, or you've at least been building your skills with Adobe Illustrator & Photoshop in your free time.
Clearly, there are a lot of competitors in your industry that'll be willing to charge much lower rates than you, no matter what you do. There are people from all around the world with lower costs of living that'll always be willing to accept lesser-paid gigs than you. Get over the idea of trying to compete on price as a freelancer, right now.
It’s not worth racing other people to the bottom, especially when sites like Fiverr and Upwork already have countless options for low-priced freelancers. Side note: I personally recommend not ever listing your services on either of those sites, unless you absolutely need to (after striking out once trying everything in this post).
By taking the time to find a profitable niche for your freelance business, you're actively seeking out an industry and type of client that values quality. When you're in a space that competes on quality, you'll completely change the ways in which you sell your services. You'll be competing on value, not price.
Instead of taking any graphic design project that comes your way, choose to concentrate solely on infographic design for startup blogs, or eBook layouts for enterprise tech companies. Choose an area that genuinely interests you, and focus on becoming the best designer in that narrow space.
Once you've made yourself invaluable within your niche, you'll have a platform by which you can expand your freelance business in any direction you'd like.
3. Identify Your Target Clients.
Just as important as finding a profitable niche, is attracting the right types of clients for your freelance business.
As you're just starting your freelance business, it's fine to take a bit more of a shotgun approach to landing a few clients. Make some initial assumptions about who you want to work with, target them first, and after working with a few of them, you'll develop a very clear sense of whether or not you want to continue pursuing similar clients.
Since starting my freelance business, I've honed my target client profile over time to matching only two very specific types of businesses. High-growth tech startups and business influencers with well-established personal brands. The primary reasons I've narrowed down the focus of my freelance business this far, is because I work best these types of (very similar) clients, and they both run in similar circles that lead to frequent referrals. I'm building my reputation within my niche.
This is a difficult decision to make at first, because it means turning away a lot of business. However, the process of narrowing in on your target clients that you work best with, will help you achieve much better results in the long run. Once you have a few clients who are willing to advocate for you, the momentum will really pick up.
Going back to our focus of competing on value, not price, everything you do in regard to starting your freelance business - especially when you have a very limited amount of free time - needs to point back to your ability to deliver the highest quality results for your clients. As one of my freelance idols, Paul Jarvis so eloquently put it over on the CreativeLive Blog, "make your clients so happy & successful that they become your sales force."
Your goal is to build your authority and eventually be seen as the go-to resource for a specific type of client(s).
By appealing so well to a narrow (well-selected) niche, your target clients will have a very quick path to deciding that you're the best person to help them with their projects. This above all else, is the path to charging premium rates without anyone batting an eye at the first prices you throw out.
To determine the best type of target clients as you start a freelance business, ask yourself these three questions:
- Which businesses will find my services useful?
- Which businesses can afford to pay the prices I'll need to charge, in order to get to my income goal?
- Who are the decision makers within these businesses, and what can I learn about their demographics & interests? Can I find a way to connect with them on a personal level?
With my target clients, smaller startup teams and founders with personal brands, they can instantly relate to me because of my own personal affinity to startups. Because my portfolio work is directly applicable to what they do, they also start out with much more confidence that I'll be able to drive similar results for their business, too.
4. Set Strategic Prices for Your Services.
I've spoken a lot about setting the right prices for your freelance business before you get started. I even architected an infographic that walks you through the process of setting your freelance hourly rate.
From a pure numbers perspective, this calculator from MotiveApp is as good as it gets for determining what your hourly rate needs to be, in order to meet your income goals and expense levels. It's a great tool for double-checking that you're charging enough to afford the lifestyle you want to live, but I recommend starting to determine your pricing strategy with a very different progression in mind.
Remember, you need to price yourself based on the value you deliver - not based on what your competitors are charging.
Don't allow anyone else to dictate the terms by which you define your value. That's not what starting a freelancing business is about.
In this post on his blog, Neil Patel chronicles many of the lessons he learned while running an SEO consulting business. One of the most prominent lessons that stuck out to me, is that the more you charge, the less clients complain. Because he very astutely selected target clients that have big budgets, he knows that they're much more willing to spend money - in order to make that money back through investing in your services. Smaller clients, on the other hand, often don't have as much money to play with, and thus can't sustain much in terms of losses when projects don't deliver big returns.
There's no such thing as prices that are too high. Your prices may be too high (or too low) for the types of clients you're targeting, but if you do your homework in deciding who to pitch your services to, you'll be selling exactly what your clients need - for a price they can justify.
In my freelance business, I write well-researched, in-depth blog content for my clients. Most of my content is in the range of 1,500 - 2,500 words per piece, and designed to rank well in organic search results, which is extremely valuable for most businesses. Because my work extends beyond just writing, and into strategic distribution and driving traffic after the content publishes, I add a lot more value for my clients than any other "writer" can bring to the table. For that extra value, my prices start at $500 per post (plus distribution) and sharply go up from there, based on other requirements and add-ons.
Don't charge too far above your value, but don't ever undervalue what you're doing for your clients.
They're going to hire someone to help with their projects, so it's just a matter of showing them you're the right person to help. Price becomes a secondary concern, if they're already convinced that you're the best person for the job. It's business and they'll make it work, or it wasn't meant to be. Keep in mind that you won't be the perfect person for every client.
5. Build a High-Quality Portfolio Website.
Because I'm such a huge advocate of creating a powerful online presence to support starting a freelance business, I brought in an expert, Laurence Bradford, to share all of the essential elements to building a freelance portfolio that wins you high-value clients. Read the full post from Laurence on my blog right here.
As a starting point, let's understand what the purpose of having a portfolio website is, in the first place. It's often the first impression a potential client will have of you, your style, your work, and the past clients (or companies) you've worked with. You need to effectively communicate the services you offer, and who they're for. Beyond that, you need to sell yourself on why you're the best person for this type of work - for the clients you want to work with.
Your freelance portfolio needs to do the following, in order to be truly effective at selling your services:
- Communicate your specialty & display examples of your work.
- List your contact information & show off your personality.
- Highlight your relevant skills, education, and accomplishments.
- Display testimonials (even if they're from coworkers or former bosses when you're just getting started).
- Have regular updates that show your evolution, new clients, and updated sample work.
As you're developing your portfolio site, find other freelancers within your space and get some inspiration from them, to help uncover how they're positioning themselves, formulating their value propositions, and going about building their businesses.
6. Create Examples of What You Can Deliver (on Your Portfolio Site).
You want your website to serve as a destination to demonstrate your expertise.
With that in mind, one of the best ways to show you're in the know within your space, is by regularly publishing new content, images, or videos (depending upon the content medium you work in) that your target clients will be impressed with. Once you have an understanding of what your clients need, go out and create examples of that exact type of content - as if you had been hired to produce it - for your own website.
There's no better way to sell your services, than to already show your clients that you can create what they need. What's more, is that it'll make their projects that much easier when you have a library of related work to pull from for inspiration.
My website is a living example of this. When I set out to start a freelance business, I decided early on that at least once per month, I was going to make it a point to publish a very thorough 4,000+ word blog post on topics that fall under teaching my readers how to start and grow a profitable side business, the theme of everything on my site and something I have intimate experience with.
It's no coincidence that I choose to work with clients that have a very similar target market, as those who I speak to on my personal blog here. All my potential clients need to do, is check out a couple of my posts to see how much engagement they get, pick up on my conversation style, and get a feel for how I'd be able to work with them & their audience.
If you're a web designer, your portfolio site should be very meticulously curated since everything about it, is a representation of what you'll be able to build for your clients. If you're a writer like me, then your blog posts need to speak to the quality of work you'll create for everyone you work with. For designers, the same thing goes - make sure the images you feature on your site are representative of the style you want to create for your future clients.
7. Thoughtfully Choose Your First Clients.
Because you have a very limited amount of time to source new clients (and actually do the work for them) as you start a freelancing business, you need to get the most out of the clients you do bring on. Both from a financial and portfolio-building standpoint.
Your limited number of clients and correlating portfolio pieces, will represent how you're perceived by other potential clients moving forward.
That makes everyone you choose to work with or highlight on your website, a crucial decision - especially in the beginning. Obviously you don't want to overthink it and go into decision paralysis, but spend a minute or two thinking through whether or not each potential client you're considering, will help you get to where you want to go.
Right now, I only have 2 clients for my freelance business. It's not for lack of work requests that come in, but rather because I've chosen to allocate my limited amount of freelance time to these two clients that are most aligned with the future clients I want to work with, as well.
Check out this post from Paul Jarvis on Lifehacker, about how to choose the right clients for your freelance business.
8. Mention Potential Clients in Your Content.
You're going to have a hard time making a name for yourself within your niche, if nobody knows you exist.
That's why within every piece of content I create on my blog, I regularly mention the brands, companies, and individuals I see myself potentially working with one day. Even if I'm not quite ready to take on new clients, or I'm not even qualified to go after such huge deals yet, it's never too early to start building good will and getting your name in front of the right people at your target companies.
Look ahead at the content you plan on creating for your website over the coming weeks, and keep a running list of the companies you want to feature whenever possible. Then, once you publish something that mentions them, take a few minutes to reach out and let them know about it.
I can't emphasize enough how integral this step has been, in helping me start a freelancing business and grow my personal brand so quickly.
Almost every time I do this, the person I email responds very quickly with thanks, they'll usually share it through their company social channels, and they won't forget it.
Most of the time, you’ll be leading with a cold email to someone you've never spoken to, but this push outside of your comfort zone is healthy.
Here are the essential elements of a meaningful cold email, and below is my personal template.
- Research the best point of contact to reach out to.
- Perfect your subject line for the recipient.
- Keep your ask short.
- Sell your strengths.
- Always include a call-to-action.
Here's my personal cold email reach out template, for giving potential clients a heads up when I publish something that mentions them.
I've been using (and loving) [Company/Product] for many years, and always recommend it to others when [relevant use case].
I wanted to give you a heads up that I featured [Company/Product] as a resource in my post about the 79 Essential Tools for Launching an Online Business and the post is starting to take off. Hoping it'll send some traffic and new users your way.
Would you mind taking a look at the post when you have a chance to make sure I'm giving a great description of the benefits of [Company/Product] and linking to the best destination for you? I'm happy to make some quick edits before I syndicate a version of the post to Inc.com.
You'll notice that I ask them to take an action within my email. The action is in their best interest, since I just want them to confirm whether or not I'm describing them as best as possible. Almost everyone I send this email, replies with either a thumbs up or a quick edit request.
Regardless, what's most important is that I've now established a connection with them, based on value I've already provided. The relationship is now there, which brings us to perfecting your selling abilities.
9. Learn How to Pitch Yourself.
No matter how skilled you are at your craft, if you want to turn your skills into starting a freelance business, you need to be able to communicate those strengths and convert your conversations into paying clients.
My entire course on Winning Freelance Clients is dedicated to the topic of how to find, convince, and convert new clients for your freelance business - by using carefully strategized proposals and reach out tactics.
Here are the basics of crafting an effective freelance proposal that lands you clients:
- Make a strong entrance with an elevator pitch email that already provides immense value & shows you've done your homework.
- Sell your strengths.
- Anticipate and answer any questions that may come up.
- Lean on relevant work samples and past projects to demonstrate your expertise.
- Use a visually appealing layout for your proposal.
Head over here where you can pick up a free downloadable copy of my freelance proposal template.
10. Don't Mix Your Day Job Priorities with Freelance Business.
Above all else, it's important to remember that your day job (and sole source of reliable income) is your number one priority.
Don't do anything to jeopardize your full-time employment, as you still need it to sustain you while you grow your freelance business on the side. My in-depth post on how to avoid getting fired (and sued) when starting a side business is definitely worth a read as you get started with your freelance career.
There are a lot of no-no's you'll need to avoid, including:
- Breaching any contracts or agreements you've signed with your employer.
- Working on freelance work during company time (seriously do NOT do this).
- Using company resources, computers, or online tools within your freelance work.
- And much more.
Now that you've got an understanding of how to start a freelance business, here's why I believe everyone (especially millennials) should be freelancing on the side. It's been one of the best business decisions I've ever made, and it's been by far my most consistent side business to-date.
I strongly recommend that anyone considering starting a freelance business or transitioning into being a consultant, begin first with freelancing on the side while still working full-time.
Why You Should Start a Freelancing Business While Working Full-Time
1. Testing Out Self-Employment Stress-Free.
You need to build up a runway of clients and income already flowing in before you up and quit your job, unless you're willing to blow through potentially a lot of savings or take out a line of credit to prop yourself up while you're not generating much income with your freelance business or startup.
I'm all for calculated risks, so this one is simple to me: I need to bring in as much income as my current job affords me, or close enough to it (my personal rule is that my side business needs to generate 75% of what my full-time gig pays me), that I can justify quitting to focus full-time on client acquisition, before I even consider leaving.
By spending 10-20hrs/wk landing freelance clients and working on their projects, you're going to get a very clear gauge on how much work it is running your own business. You'll learn all the different hats that need to be worn, what your strengths and weaknesses are, and you'll even learn How to Write a Winning Freelance Project Proposal (hopefully).
Most importantly, you'll be perfecting all of your business practices without the stress of needing the income - because you still have your job for that.
I'm very lucky that I love the work I do at CreativeLive. It's not only meaningful, but on a daily basis, I'm making great relationships and building my own personal brand while simultaneously driving outstanding results running the marketing for our Money & Life Classes. I'm not in a position where I need, or even want to leave my current job, so I have the benefit of being able to bring on freelance clients on the side without the stress of being at a job that isn't fulfilling.
2. Increasing Your Income.
One of the nicest benefits of testing your way into starting a freelance business while you’re still working full-time, is the additional income.
Whether it’s a few hundred dollars, or several thousand, it’s important to keep very careful track of everything you’re making through your freelance side business. I recommend using a tool like Batchbook, a CRM system for monitoring your clients and tracking the work you’re doing, in addition to keeping tabs on the value of each contract you’re working on.
While you’re steadily ramping up your freelance income and signing more clients, I recommend saving 100% of your earnings from your new freelance business. Before you even get started, be sure to set up a new checking account as your destination for getting paid by freelance clients. This is extremely important for several reasons. You’ll be very clearly tracking how much monthly income your freelance business generates, it’ll be in a separate account that you’re not tempted to draw from, and you’re actively building up a safety net for potential lean times ahead.
3. Building Your Skills.
Arguably the most important reason to start a freelance business while you’re still working, you’re going to be getting a lot of experience very quickly – and you’ll be honing your abilities under circumstances that are within your control. You’re not under the gun to immediately take on an overwhelming number of clients. Instead, you can focus on delivering very high quality work on a small number of projects that’ll help you continue to get better at your profession.
As a writer, I know the importance of keeping up with trends and regularly practicing my abilities. Whether I’m writing for my own website or for a freelance client project, I get to go through the exercises I want to continue to get better at, on a daily basis. By freelancing my services, I’m getting paid by others to improve my skills.
While researchers have never agreed upon a set number of hours of practice needed in order to become an expert on any subject, the more time you spend perfecting your skills and developing your own personal style, the better. A recent study at Princeton showed the amount of deliberate practice one gets may not correlate as closely with performance, as previously thought. Nevertheless, you'll undoubtedly experience immense benefits from working on your favorite skills.
From Michael Jordan to Bill Gates, they became extraordinary at what they do, not because they put in an incredible amount of time into practicing, but because they cared deeply about improving their abilities and being the best.
Start practicing as quickly as possible and you’ll be able to command higher rates as a freelancer down the road.
4. Nailing Down Your Pricing Strategy.
When you first start a freelance business, most people tend to greatly undervalue their services and set the bar very low at the beginning. This is often justified by trying to set rates that are based on "market value" or comparable to others within your industry. This is totally backwards, as you need to be pricing your services based on the value you provide. Yet, many freelancers have to learn this lesson the hard way.
When you’re bidding on a freelance project, always start higher than you think you should. Focus on communicating how much value you’re going to deliver for the client, and lean heavily on accomplishments & results you’ve already generated for other clients, or at your job.
In this course, I’ll teach you exactly How to Write a Winning Freelance Project Proposal.
In addition to undervaluing your services, it’s easy to significantly underestimate the costs that go into running your own freelance business. $35/hr at your 9-5 job is not the same as charging $35/hr for your freelance services.
Now that you’ll soon be self-employed, it’s time to familiarize yourself with all of the new taxes, fees, expenses, and costs of living that’ll soon be placed upon your shoulders now that your employer will no longer subsidizing any of those costs. This infographic I created on How to Calculate Your Hourly Rate as a Freelancer is a great starting point.
5. Creating Your Own Personal Brand.
I'm a firm believer that you're developing a personal brand for yourself in everything you do. Deciding to start a freelance business and tie your name to the work you do for a broad range of clients, is one of the best ways to start getting your name out into your industry.
How do you want the world to see you? In starting a freelancing business, you'll naturally need to develop an online portfolio to display your works and show off what you can do for potential clients.
You'll need to create project proposal templates, sample works, and pricing guides before you go out and start pitching clients. What better time to begin creating these materials than while you still have a steady income from your day job?
6. Developing Valuable Connections.
As Jeff Haden, best-selling author and speaker simply puts it, "don't build networks, make real connections."
Look at your freelancing business as an opportunity to make deeper connections with clients through delivering genuine value to their businesses. You're building relationships that have the potential to last a lifetime. The relationships you can make while freelancing extend far beyond those of just your clients.
In my pursuits as both a freelancer and as a content marketer at CreativeLive, I've come across countless amazing resources for learning how to start (and grow) my freelance business and I've sought to build meaningful relationships with the people behind them. Preston Lee who runs Millo.co and Randle Browning at Skillcrush are putting out some of the most high quality, actionable content on how to go about perfecting your freelance business.
Because I love the educational content they're spending countless hours creating for their readers, I'm very actively aligning myself with them in everything I do. It's a strategic decision that helps me build my personal brand in the direction I'm seeking to grow into. If I'm able to eventually work with them in my freelance business, that's merely a side benefit to building a strong relationship founded on genuine mutual interest.
7. Discovering Your Passions.
If you’re spending your limited hours of free time each day getting clients and working on multiple projects at a time, you’ll learn very quickly if you’re passionate about writing, designing, or whatever task you may be doing. Take these 8 steps to discovering your strengths and passions, and it'll help you evaluate whether or not your freelance work is truly meaningful to you.
As you start your freelance business, you’ll also learn the types of industries you enjoy working in and the demographics of the customers you work best with.
Knowing what you’ll enjoy working on and who you want to work with is crucial to setting yourself up for success. It can mean the difference of being passionate about a project, or viewing it simply as a paycheck. Take a look at your personal hobbies and see if there are any ways to align your freelance business with clients that are somehow associated with those interests; your hobbies can tell you a lot about your passions.
8. Learning Discipline.
When you start a freelance business, you need to have a fierce dedication to delivering great results for your clients regardless of the circumstances going on in your personal life.
Procrastination can be the ruin of you. Pick up these 5 tips for preventing procrastination on Freelancer's Union, and learn how to prioritize your most important, short-term goals in real-time. This prioritization is a huge component of my "Just Say No" Time Management System.
There are no excuses for coming up short on a freelance project, other than the fact that you failed to deliver. Naturally, if there's something serious going on that halts progress on your work, it's understandable with most clients. However, the responsibility of clearly communicating unforeseen emergencies as quickly as possible (with revised expectations & due dates) rests on your shoulders.
If you can find a way to dedicate a few hours each day to your freelance business while you’re still working full-time, you’ll have no trouble running your own business and keeping up with deadlines in the future. Whether you get up at 5:00am or stay up late to work on your projects, you’re training yourself for how disciplined you’ll need to be once you’re freelancing full-time.
If you're starting or looking to grow your freelance business, you know how important it is to be able to close the deals and land the clients you want. Join me in my course, Writing a Winning Freelance Project Proposal today.