You’ve decided that you want to stray from the traditional 9-to-5 route and work from home as a freelancer. You’re eager to hit the ground running and begin raking in some cash — all while in your pajamas, no less.
But, not so fast. There’s quite a bit of groundwork that needs to happen before you ever see so much as a dime roll in. And, it’s better to get that foundation laid sooner rather than later.
Here are five basic things to consider:
1 Figure out your accounting system
Unless you’re a freelance accountant, numbers, spreadsheets and invoices aren’t the stuff that your freelance dreams are made of. But it’s a necessary part of the job.
Ideally, you’ll have your accounting system set up before you accept a single paid project. Starting right from the get-go makes it that much easier to track your income and expenses, which will be important data to have when it comes time to pay your taxes.
It’s also worth taking some time to think through other financial basics of your newfound freelance life. What does your payment structure look like — will you bill per project, per hour or by some other factor? What sorts of payments do you accept? How often do you invoice, and in what time frame do you accept payment?
2 Enlist a team
This doesn’t deal with a team in a traditional sense: Think of it as a roster of professionals who can help you with the aspects of your freelance business that you might not be so skilled with.
Perhaps you plan to work with an accountant who can take the stress out of tax time. Or, maybe it’s a lawyer to help you draw up your initial contracts, or a web developer to get your site up and running. You may also need to show that you have the requisite insurance in place depending on what type of services you provide or whether you employ other people.
3 Establish your workspace
It’s worth analyzing where you think you’ll be more productive. Will you struggle to focus when distractions like the television or those piles of laundry are calling to you? Or, would you get more done in an area away from your house?
There’s also the financial aspect to consider. Office or co-working spaces involve a fee (which is tax-deductible in most cases) whereas working in a home office is free and provides the opportunity to write off a portion of your living costs for business.
If you’re uncertain, it’s worth having a conversation with your accountant to see what might make the most sense for your business and situation.
4 Handle the fundamentals
From establishing a business entity (an LLC, for example) to ordering business cards and opening up a business checking account, there are plenty of necessary fundamentals that go into getting your business off the ground.
This is why it’s smarter to do these things early on, before you have a schedule packed with client work. In fact, the smartest strategy is to take care of these things before you take the leap into freelancing and are still employed full-time, so you can get them handled while you still have the benefit of a regular paycheck coming in.
5 Set up a schedule
Before you nosedive into the siren song of freelance freedom, it’s smart to sit down and set out a schedule for yourself. How many hours do you aim to work each week? Is there a specific time you want to get started and shut down? Will you work weekends?
It seems like an unnecessary step — not to mention a bit of a buzzkill when you’re so looking forward to increased flexibility. However, being proactive with your work schedule will help to keep you accountable and ensure that you treat your new career with the level of dedication it deserves.
