Let me guess, you’re a side hustler wanting to know how to start a freelance business. That’s fine! I can’t see into the future; I just know that’s the case from experience. I have coached hundreds of freelancers and entrepreneurs and a very common reason why people hire me to help them is because they like their side-hustle gig more than their salaried job and they want to do it full time. So, let me show you how to start a freelance business in the quickest and easiest way possible. If you prefer, feel free to listen to my podcast on this topic.
Show Me How to Start a Freelance Business
This post will showcase the most essential tips to what you have to do to start bringing in clients. If you already have clients and you don’t do some of these steps, you should start doing them.
The first thing you need to do is to determine your expertise. I don’t just mean “I do design”, that’s not an expertise. That’s a skill set that you have, but how are you going to serve your clients? What exactly are you going to sell?
“The first thing you need to do is determine your expertise”
Take graphic design for example. Do you do trade show events? Do you do logo designs. Do you do animation? If so, what type? 2d or 3d? You have to niche to a very specific level and you have to know exactly what you sell. The more you can niche down, the better. And I don’t just mean your skill sets, it could be the type of client you serve. Is it a company? Is it an individual? If it’s a company, what size company? 1 million in revenue, 10 million-plus in revenue? What industry are they in? What location are they in? You have to get all that information down. Because once you understand what you service, and then who you service, it’s easy to make that connection, got it? Great! That step might not be so easy, so take time with it and try to align it with your passion.
How Can I Growth Hack My Way to Some Great Income?
Once you determine your expertise on what you do and who you sell it to, you have to growth hack your startup. There’s a lot of buzz around the growth hack word, it’s not very well defined. So, understand what growth hacking is, it’s the quickest way to get the result that you want. For example, most freelancers get a website, they determine their brand, they might even hire a branding consultant to get their brand down and understand what colors and fonts they want to use. They will get all their email templates and back-end processes done. You really don’t need any of that stuff. If you are truly growth hacking, just do the basics. If you just want to bring in some freelance work on the side or your first client, just do the bare-bones minimum. Literally snap a selfie picture of yourself. Sign up for an account on Upwork.com or another site like Freelancer or Toptal. Simply create your profile to the best of your ability. Fill it in completely because no matter what freelance platform you’re on, the algorithms that put your profile on the top of search engines rank your results on how well your profile is filled out. Now that’s growth hacking, simply a filled-out profile on Upwork and start bringing in clients.
Is Education Important?
Heck yea education is important! I might be biased because I run Freelancer Masterclass. There are two types of education you absolutely need to invest in that will give you your money back many folds over. First, invest in your education for your skillset in freelancing as a whole, and second, invest in education centered around your specific trade. So in your trade, we talked about design for example, always stay on top of the latest tools. If you need to know Photoshop, you need to be up to date on all the latest releases and features.
Don’t Forget to Systematize
Systematize everything. Understand exactly what you need to systematize taking on a client.
- How are you going to prospect for clients?
- What does your onboarding process look like when you bring on a client?
- Are you going to invoice clients through PayPal or QuickBooks, or something else?
- How will you follow up with your clients after you completed your project with them?
- How will you follow up with prospects who are interested in working with you?
- How are you going to ask for referrals? How are you going to ask them for future work?
- Do you have to have a system in place for continued engagement, like a newsletter?
Systems like these are crucial for freelancers. Did you know it is 19 times easier to get money from an existing client than to find a new one? Yea, there is a BUNCH of gold in your database, you have to know how to harness it. I know a freelancer who sends gift baskets to all their new clients that onboard with him. Will you do that? You should make all these decisions before you start your freelance work.
Utilizing the Benefits of Being a Freelancer
One of the best benefits of freelancing is that you have the freedom to choose your terms. Most clients will allow you to work on your own schedule and pace, provided that you deliver quality output on time. This leniency can give you more time for yourself doing your hobbies or spending time with your kids. But beware of procrastination- it’s your biggest enemy! When you delay doing what you need to do, you are wasting time and money. Do your work first, spend some time prospecting, then shut down your PC and enjoy your life.
I say enjoy your life because that’s the reason why you’re working to begin with. I have a friend whose philosophy is, every minute you’re not working; you’re losing out on money. He has all his employees work for more than 60 hours a week. I told him to go easy on them because too much of a workload can burn them out. I was right. He had high employee turnovers and was constantly spending time recruiting new ones. What a waste of time. My advice, find you’re a-players and treat them like gold.
Make sure that when you become an employer, respect your team’s time to rest. Let them have a life after work. As long as they know their work output and deadline, then many things will fall into place.
Make it Official
Get an LLC or Inc. Getting an LLC is a great way to protect your assets and all the things you’ve worked hard for. I have a friend who was so lazy to get an LLC. When she took on a rough client, the client sued her. Since she didn’t get any insurance, all her assets were put at risk of being confiscated by the bank. It turned out to be a stressful situation for her and her family. All that because she thought “it won’t happen to me”. Guess what? Like life, business is full of surprises.
No matter how good you are, something will go wrong. You need an LLC or Corporation to protect your assets when those times arise.
Monitor your Reputation
High-paying clients will investigate your reputation online. If your company has many one-star reviews, that’s a red flag for them.
If you receive bad feedback, try to mitigate it as soon as possible. Do whatever you can to remove it because it can destroy your reputation. If it means refunding your client’s money, do it, unless it’s a major project.
To get positive feedback, don’t oversell or overpromise yourself, and don’t take on work that you can’t do.
Know your Numbers
Do you know what CAC, LTV, and Profit Margin mean? If not, you’re missing out on potential revenue. For your sake, here are some terms you need to know:
CAC= Customer Acquisition Cost. How much does it cost you to acquire a customer? If you use Upwork, maybe its zero, unless you sign-up for a premium account. Let’s say you have a premium account which costs $10, and you only get one client, your CAC is $10 ($10/1=$10).
LTV=Lifetime Value of a Customer. How much does the customer provide you, on average, in terms of revenue? You don’t want to spend $1,000 worth of marketing if your LTV is only $500 because it means you’re losing $500 per customer.
There are other terms that you can search for online to see how they affect your business. These terms include Profit Margin, Net Profit, and Revenue.
Treat Your Business Like a Business
One of the big advantages I have as a freelancer over other freelancers is that I have always treated my freelance business as an actual business. I put time on my calendar weekly to review my numbers, review my goals and review other important metrics about my business. If I were to estimate based on the hundreds of freelancers I talk to every year, I would say without a doubt, that less than 1% do what I do. This MUST be done if you want to make a full-time career as a freelancer. I give this analogy, if you wake up every day and just do your work as usual, it’s like getting in a car with no destination in mind. By reviewing my goals, I am consciously and subconsciously pushing myself to achieve those goals. The goals don’t have to be revenue related either. A goal could be to only work 4 hours a day and be able to replace your existing income. A goal could be to spend more time with your kids or spend more time playing tennis or golf. Your goals should align with your passion.
When you take your job seriously, your prospects and clients will be able to see the difference too. Many times I am told, “Mike this sounds great, but I am too busy to schedule a time to reflect on goals”. Don’t think about it in terms of lost time, think about it as an investment in your time.
So if you really want to know how to start a freelance business, it’s not easy but it’s certainly worth the effort. If you will follow the advice I laid-out for you, you can get there.
If you haven’t yet, check out our Masterclass course and start building toward your goals. Share this article and comment below on some tips you have to starting your own freelance business.