Freelancing means offering your services to individuals, businesses, and public institutions as a self-employed professional. Freelancers work in all industries today, as many companies prefer to work with freelancers on specific, specialistic projects over hiring employees. Professionals such as artists, authors, professional speakers, or athletes also freelance. You can become a freelancer by establishing a sole proprietorship and promoting your brand to attract clients—or otherwise, by becoming a subcontractor to another business. 

Freelancing requires expertise in a certain domain and a great dose of self-management skills. After all, you need to be your own boss and salesperson! It can be highly rewarding though, both in terms of remuneration and the overall satisfaction from work.

THE GENERAL STRUCTURE OF THE WORKING ENVIRONMENT

Most freelancers start from working on their own and start looking for subcontractors after when they reach a crucial mass of clients that they cannot handle by themselves. Therefore, you need to be prepared that on this career path, you will need to start your journey from working alone. 

Of course, it doesn’t mean that you will build your business entirely alone—most likely, you will need to book services from other freelancers to help you with sorting out the bits of your business that you might not be an expert in, e.g., building a beautiful website, the Search Engine Optimization (SEO) for your webpage, help with online promotion of your services, etc. You can also rely on advice from your friends and family—you won’t be alone!

Some freelancers also join forces and form teams for bigger projects, but this is not a common practice. In general, other freelancers in your space can become your competition rather than your collaborators. 

However, if you have a network of freelancers who represent services that are synergic with yours (but not entirely the same), you can still help each other by creating affiliate programs and referring clients to each other. It is a common practice and a functional system—by referring clients to each other, you increase the joint revenue.

WHAT DAILY LIFE IS LIKE

The Necessity To Self-Manage

Well, you daily life is exactly as you choose it to be—which can be either good or bad news, depending on your level of self-discipline. The necessity to organize yourself, and keep a steady working pace is one of the most common inconveniences reported by freelancers. In most large cities, there are either formal or informal places where freelancers can gather to work and network together—open workspaces, bars, libraries. 

So, if you suffer from a feeling of solitude, you might consider joining one of these communities. As an alternative, you can also rent a desk at the nearest startup accelerator—it will be a little cost to take, but it will give you a real office experience and enforce you to keep a steady working pace.

YOUR OPPORTUNITIES

A High Degree of Personal Freedom

The most obvious benefit from becoming a freelancer is that you don’t depend on anyone, and no one depends on you. You can choose optimal working hours as well as the most comfortable working location. It can be anywhere, even at the nearest bar! Your clients will only care about the timeliness and quality of your results and not about how and where you worked on the project.

Of course, this freedom can be a benefit or a shortcoming, depending on your personality. For a free spirit who despises being told what to do, it is a perfect situation, while for a person who enjoys structure, security, and professional supervision at work, it is hell.

You Can Become a Well-Paid, Respected Professional in Your Field

Once you get experienced and acknowledged enough to secure many returning clients who are willing to queue for your services, your feeling of safety and stability at work will increase and be almost as high as the sense of safety perceived by employees of established companies and public institutions. This level of personal success might also free you from the necessity to network and sell yourself at some point. 

Of course, you will need to network for the first few years. However, if you become recognized for your work, build a brand, develop a strong image online, and get a base of happy clients who eagerly recommend you to others, then at some point, new clients will start finding you and knocking at your door without any further self-promotion from your side. An, there will be so many volunteers to order your services that you can gradually leverage your pricing plans and become a well-paid professional. 

Freelancing professionals who develop a personal brand in their area of expertise, can charge high fees for their services and live on a high standard. For instance, high-class software developers and life coaches can ask for $100-300 per hour. Professional corporate lawyers and business advisors can charge even more, in the range of $500 per hour and more. 

Funny enough, despite the stereotypes about the lavish life of entrepreneurs, on average, it’s freelancers who tend to be the highest-paid professional group. For instance, in the Netherlands, the median income among freelancers in 2019 was ~€49,700 net, as opposed to ~€44,100 net among entrepreneurs, and ~€43,600 among employees (Ruts, 2019). It is a consequence of two major factors. 

Firstly, most freelancers have almost no overheads as they don’t need to hire employees and rent expensive offices for their businesses. Furthermore, they have high flexibility is terms of their business operations. Namely, they can change the scope of their business operations in the Chamber of Commerce’s records (usually, online and for free), and move towards their new business activities straight away. 

On the contrary, entrepreneurs who co-own companies registered at a notary, need to charge the notary act every time they wish to change the scope of the business. Or, they need to formally close the company and register a brand new one. Moreover, as a freelancer you can make strategic decisions without making compromises with other stakeholders, while entrepreneurs need to consult every single move with their co-founders, investors, and other shareholders. In that sense, as a freelancer, you are far more flexible than entrepreneurs. 

Secondly, entrepreneurs often get modest salaries accompanied by a pool of shares as a compensation for this low pay—in case the company hits bankruptcy (which is a likely scenario!), the value of these shares goes to zero.

People Come to You to Work with YOU

If you work as a freelancer, every client who knocks at your door, comes to you because of YOU. They are not there just because they got affectionate with the vision of the company you represent, or because they have an obligation to contact you. They contact you and order your services because they specifically want to work with you. If you are a type of person for whom this appreciation and trust motivating rather than stressful, you will be happy as a freelancer.

What it also implies is that, as a freelancer, you usually get into a direct contact with the beneficiaries of your services. After all, they order your services, pay for them, and collaborate with you in the process. Therefore, if you get especially motivated when you see a smile on the face of the person whom you’ve helped, freelancing career might be a fulfilling one for you!

Passive Income Opportunities

In many areas of the market, you can also build a passive income as an experienced freelancer. For instance, as an author, you can create ebooks and place them on Amazon (or, publish in a “traditional” way through a publisher). You will then receive royalties from every sold piece for as long as the copyrights hold—and, your descendants will also receive these royalties up to 70 years after your death. 

If you are a coach or a teacher, you can develop and publish an online course. If you are a software developer, you can spend a portion of your time programming software for some business in exchange for a pool of shares in the company—you’ll then get dividends for as long as you hold these shares, and eventually, you can also sell them. 

Naturally, if you have some pedagogic talent next to your programming skills, you can also develop and publish an online course dedicated to programming! There are many, many ways in which you can build a passive income as a freelancer.

Opportunity To Leverage on Your Living Standard by Working Remotely

If you live in a low-income country, you can gain an additional leverage by finding clients online and earning according to the local standards in the client’s area of residency while you live in a place where living costs are low. Many freelancers also travel for this reason: they choose clients in developed countries while enjoying sunshine and palm trees in developing countries.

You Can Refuse Projects in All the Creative Ways

As a freelancer, you have a freedom to refuse a project if it doesn’t resonate with your values, or if you don’t feel that it would help you grow in your profession. Unlike the employed workers, you don’t even need to give a reason for saying, “No!”

You can also refuse a project in all the creative ways, so that it leads to a win-win type of situation. For instance, if you find a given project an extremely boring and uninspiring, you might increase the quote for this project to ridiculous numbers, e.g., multiply your regular hourly rate by 10x. Then, whenever you hear “Yes” or “No,” it is a win-win!

You Can Do Well As a Night Owl

Last but not least, unlike in corporations and other working environments where the working culture is closely monitored, you can function well in freelancing as a night owl. Research has shown that night owls pressed to conform to the corporate lifestyle function below their natural capabilities (Facer-Childs et al., 2019).

So, if you are a night owl, freelancing might be your chance to finally spread your wings!

WHAT YOU WILL NEED TO ACCEPT IN THIS WORKING ENVIRONMENT

A Sense of Solitude

A freelancer is a lonely wolf of sorts—especially at the very beginning, before creating a safety net in their professional environment. Therefore, it would be an overstatement to say that it is a route for everyone—you need to have a specific type of personality to enjoy this lifestyle. When working as a freelancer, it is also important to make an active effort to keep in touch with friends and meet new people—otherwise, the sense of solitude will slowly eat you alive. 

Humans are sociable by nature. Therefore, after a few years of a lonely odyssey, many freelancers voluntarily come back to working on full-time contracts, even if that means that their earnings and the amount of personal freedom will drop.

Responsibility

As a freelancer, you need to take full responsibility for your projects and their outcomes. You and your company are one organism—if the given client is not happy about the service, you’ll need to take it on your chest, kindly apologize, and improve. And in the worst case, you might even have no other choice than offering to return your remuneration—to avoid bad blood that might backfire in the future. 

If the client is unhappy with your work, there are no other people or external circumstances that you could blame the situation for. And once in a while, you will encounter a client who will be unhappy no matter how good your work is—at least 1% of the population are haters and that’s a constant of the universe.

You Need To Price Your Work

As a fresh freelancer, you need to learn how to price your work. Typically, you will need to set the price on the project every single time. Some freelancers work in a system in which they price the whole project (e.g., they out a price tag on the website that they agree to develop) while others charge per hour. In either case, you will have the same struggle: how much can I request so that both sides are happy?

Many budding freelancers tend to put too low numbers on their work in the beginnings of their freelance careers. They agree to deliver their services at a little to no price for the sake of building their portfolio in the early stages of their business. In some areas of the market, this might be necessary as your image will depend on testimonials from your former clients. 

This is often the case if you are thinking of services heavily based on the human factor, as they are subject to the client’s personal opinion and valuation, e.g., coaching, teaching, photography, graphic design, or writing—as opposed to services that have more objective market value, e.g., data science, web design, or accountancy. 

If you are thinking of going in this direction, remember that you still need to start pricing your services as soon as you possibly can—preferably as soon as you collect a few testimonials, and way before you reach the limbo in which your clients get used to the fact that you work for (almost) free, and are no longer willing to pay. Also, mind that clients who pay, are more committed. Furthermore, paradoxically, they tend to value your work higher than those who get it for free. And if they are happy with the service, they recommend it to more people on average than those who got a freebie. It is a counterintuitive, psychological effect that you should be aware of.

But there is yet another, even deeper problem than just “Which price tag shall I put on my services?” Many professionals never start their freelancing careers only because they don’t believe that they have competencies that they might put a price tag on in the first place. They are asking themselves, “Would anyone want to pay for my services?” 

Well, if you ever had a job, it means that you do have the competencies necessary to do the job already—the difference between working as an employee and working as a freelancer only lies in the way of organizing your work and building relations with the beneficiaries of your work. If you never had a job but you have a gut feeling that freelancing might be for you, it is probably good to first go for some internship to get industry experience in your area of interest, and within that period, intensively work on building your professional network. 

If you still feel insecure about your chances to become a successful freelancer, just ask yourself, “Have I ever ordered freelance services?” All of us did—at least a few times in our lives. Handymen to fix our houses, private tutors to prepare us for important exams, gardeners, graphic designers, web developers, legal advisers, tourist guides, wedding photographers, nannies to take care of our kids, specialists in thousands of other fields. 

And now, the question is: what are the good memories that we hold after all these encounters? Do we remember our favorite freelancers because they were geniuses? Or rather, because they were kind, witty, dedicated, collaborative, optimistic, patient to take all our comments on board, willing to improve when necessary, ready to leave their comfort zone and learn something new to meet our expectations. Are you a person that fits this description? There you go! 

No Leverage

As a freelancer, you might experience stress related to the fact that you have no leverage—at least in the beginnings. Namely, you have no passive income, no paid vacations, and no one who could take over your responsibilities while you are away (well, unless you can already hire some subcontractors to work for you). 

It means that in case you experience dark times in which you are unable to work, e.g., for health-related reasons, you have no income at all—unless you are lucky to live in a country that has a strong social security system. Also, since you lead a sole proprietorship, there is no one around you who knows how hard you work and who could take care of your well-being when things go sideways—either with your business or with your health. 

For this reason, many freelancers end up as workaholics who feel guilty for every hour spent on leisure. Therefore, to become a happy freelancer, you need to develop some level of self-awareness and mental hygiene to say, “Stop!” and take free time when necessary.

Rejection and Competition

You can experience a lot of rejection and competition—especially at the beginnings of your freelance career, before you develop a strong personal brand. Also, you need to watch the market closely as changing trends might require you to change your offer or marketing strategy once every few years, or even once every few months. 

In the worst case, it might happen that your current services won’t be even necessary on the market in a few years from now—in that case, you will need to think about learning new skills and changing the scope of your activities. Web design could be a good example. Between 2000-2010, creating custom commercial websites was a good source of income. 

Today, there are so many hosting platforms offering cheap, convenient, user-friendly tools to build your own professional website (such as Squarespace or Wix), or completely free solutions such as WordPress, that the space for freelancers in this area has considerably shrunk. Therefore, many web developers had to change their offer and start a brand new business.

At the same time, new opportunities might suddenly emerge—that’s why it is so important to be open, vigilant, and flexible as a freelancer. For instance, in the corona crisis, a demand for multiple new services has emerged. As a simple example, millions of employees were forced to work from home for the first time in their lives—and they has hard time adapting to this new situation. Those freelancing coaches who quickly spotted the demand and extended their services in this direction, earned a new base of clients and are now successful.

Hard to Get Noticed, Especially In Some Branches of the Market

There many branches of industry in which the careers to entry for freelancers are low. “Coaching” is a classic example—today, anyone can put a label of a Life Coach on their private website and on their LinkedIn profile, and start offering coaching services, so how to even stand out? Especially in such areas of the market, you will need an extraordinary level of persistence and consequence to stand out from the crowd and build your base of clients.

Unfortunately, many freelancing experts get a burnout and drop out prematurely. They just cannot mentally handle the dip where you are already invested in your little business for a long time, but it doesn’t yield expected profits just yet.

The Necessity To Sell—Day In, Day Out

As a freelancer, you will need to quickly learn about salesmanship—to an even higher extent than in consultancy jobs. Even if you are not a natural salesperson, in freelancing, no one can take care of sales but you. You will need to learn the basics of building an image online: Search Engine Optimization (SEO) techniques, and perhaps also arranging Google-, Facebook-, and LinkedIn ad campaigns, etc. It will also be beneficial to build a following on Twitter, LinkedIn, and other social media.  

You might also need to invest a lot of time and resources to attend professional meetups and conferences where you can meet your potential clients. Freelancers often feel frustrated when they discover that they need to spend 80% or more of their time hustling around and looking for clients, while the billable hours are a tiny percentage of their working time.

There is one exception from the necessity to be a salesperson as a freelancer. It’s the situation when you become a subcontractor to a particular company or organization—mind that in that case, you will be dependent on one client though! That also has its downsides.

Many Con Artists Will Try to Lure You In

Related to the previous point, many con artists prey on the fact that many freelancers who are good specialists are not necessarily natural salespeople and business developers—and for that reason, they have hard time starting their own business. Therefore, they will try to sell you a “system” for becoming an online success and generating passive income.

You should know that no matter what all these people say, there is no easy way of starting a profitable online business. Please beware of all the con artists who shill for their “easy, bulletproof systems for building six- or seven-figure online businesses” these days. They market everywhere, from YouTube, through Google Ads, to Facebook—and they promise to sell you the “blueprint for how to launch a highly profitable online business in a month.” Or, even in a week! Drop shipping, online trading, opening online stores, running YouTube channels by posting free content, building MLM systems… Online businesses of all shapes and colors! 

The rule is: you don’t need to be an expert in anything, and you don’t need to know anything about business development. You just need to pay for taking part in the program (usually, priced at $2,000+ but you can also easily find programs price at $10,000+). Please don’t fall for these traps.Building an online business that generates passive income is possible, and certainly within your reach. However, it needs time, proper market research, and consequent marketing to build a functional model in which offer your clients your top-notch expertise to solve their burning problems—rather than just conning them into buying anything that might potentially sell.

The Taxes

As a freelancer, you need to handle your own accountancy and taxes. In most countries, you will need to pay your income tax and the sales tax (also known as the Value-Added Tax, or VAT) separately. The income tax is typically paid once per year, while the sales tax is typically paid on a quarterly basis. Most budding freelancers initially handle the taxes by themselves as professional accountancy services are too expensive for them at the start. As an accountant, you need to be timely and precise, as delays and mistakes can result in painful fines.

HOW NEW POSITIONS ARE ANNOUNCED

As a freelancer, you typically hunt for clients rather than positions. However, companies and public organizations also order freelance services. If they publicly announce a demand for certain type of service, you might send your offer. They usually work with a number of subcontractors whom they audit on a regular basis. If you are willing to work with companies that relate to your field of expertise, you will most likely need to network and cold-email them your offer attached. It is because companies rarely announce their process of searching for subcontractors to public.

Governments are also willing to work with external companies (including sole proprietorships!) and order services from them. Usually, Business-to-Government (or, B2G) model is convenient to small businesses as governments are loyal. Once they certify you and sign a contract with you, then most likely, you will stay in the loop and be able to offer your services to them for long years to come. In order to check if in your country, the government is currently interested in ordering services within your field of expertise, you need to visit the national tender registry online. 

HOW TO START

Start From Learning About the Local Requirements

In some countries, freelancing requires registering a formal business (e.g., as a sole proprietorship) in the local Chamber of Commerce. In some countries, you also need to set a website for your business before you can start your business activities—it is, however, not a rule. In other countries, you are allowed to invoice your clients up to a certain yearly amount without formally registering a company. You need to learn the local rules before you start invoicing your clients!

There are also additional local rules that you might need to learn. E.g., in the Netherlands, you are not allowed to work as a freelancer if you aim to have less than three clients. This system aims to protect the employee’s rights: it prevents companies from contracting full-time workers to work as subcontractors and get paid per hour (which is, in general, more beneficial for companies as it makes workers disposable) instead of hiring them as employees (which is, in general, more beneficial to the workers as it gives them working stability). 

On the contrary, in some other countries, e.g., in Poland, employers often give you a choice—you can choose whether you prefer to receive an employment contract or rather, work as a subcontractor at a given position. For tax reasons, working as a freelancer is more beneficial in financial terms and thus, preferred by many professionals—despite the lack of benefits associated  with employment.

Therefore, before you decide to take this route, you will need to learn what the local regulations are, what form of employment is the most beneficial for you, and how you can legally start working as a freelancer.

Find Your First Clients

Well, as a freelancer, you formally won’t need to go through the recruitment process. For many freelancers, it is one of the main perks of this career path!Unfortunately, in reality, the process of getting your first clients and making your little business profitable requires much more effort than just formally setting the company. The difference is more or less like the difference between getting admitted to studies at a prestigious university, and making all the effort to successfully graduate. As mentioned before, to invoice your first clients, you will need to put your personal network to use, hustle around at events, and in many professions, also offer some services for free.

You can also promote your services using online marketing, although it looks much easier than it actually is. These days, most people suffer from the information overload, habituate to the excessive amount of marketing content and no longer react to online advertisements. If fact, they do everything they can to avoid contact with online marketers, e.g., by buying into paid streaming platforms like Netflix or buying into YouTube subscription only to avoid advertisements. 

Moreover, online marketing is a large branch of industry—doing it right requires extensive amounts of time, years of practice, and sometimes often a specific type of talent (e.g., a talent for copyrighting). It is also why startups usually delegate one person who is the most talented in sales to take over the marketing side of the business (it is usually the linchpin on the team). If you want to freelance, taking the linchpin’s role on the side might be a huge burden and the chance is, it might not give you the expected results.

Beware of the Con Artists Who Feed on Freelancers and Small Entrepreneurs

One warning that should be made here. Today, especially ever since the corona crisis broke out, there are tons of expensive coaching programs offered online. They target budding freelancers who aim to build their own little businesses. These online gurus promise you that at a special rate of US$1997 (on offer today only, of course!) or whatever other price, they will “give you the blueprint” (oh, that’s their favorite phrase!) to set up your own business in a way that you will never need to worry about finding clients anymore. These systems usually don’t work as expected—and most of the time, their creators are fully aware of it (which makes them con artists). 

Therefore, if you aim to build a viable model that will allow you to find your potential clients online and attract them to your business, you will need to learn the principles of online marketing, and then experiment with multiple marketing channels and come up with your own model. It takes a lot of time and can consume some financial resources as well. Therefore, the best way to start getting clients is through slow and systematic growth: networking, collecting testimonials, and building content on your website.

As a freelancer, you cannot easily predict how much time it will take you to develop stable working and financial situation. Therefore, as a rule of thumb, it is better not to produce unnecessary overheads early on (such as, i.e., renting an office in prime location or bearing some other representative costs) before making sure that you can successfully land your first clients. 

OFTEN-ENCOUNTERED HABITS YOU SHOULD KNOW ABOUT

Cultivating Freedom

Freelancers often cultivate their freedom. After all, they worked so hard to get where they are now that they want to finally live life! Some of them travel around the world, living the “4-hour week” lifestyle after Timothy Ferriss’ famous book (Ferriss, 2007). Some of them form communities of freelancers and travel together. It is so much funnier and more fulfilling to live a nomadic lifestyle in a group!

Mutual Support

Freelancers also set online support groups and keep in touch with other freelancers in their area through dedicated Slack/Discord/Telegram other groups. You never know where and when you’ll be able to get another contract just because someone else in your network is too bombed with their work and needs to delegate some project to someone else.

And vice versa: maybe it is you who is going to get overloaded at some point and will gladly delegate your client to someone else as an exchange for some nice kickback fee. Sharing is caring!