Becoming a freelancer is a way to work at home and be independent without needing to start an actual business. As a general rule, so long as you operate under your own name you do not need to register as a business (check your home state for any special requirements). This makes it possible to get started as a freelancer overnight without a lot of hassle and with the least amount of expense.
What is a Freelancer?
A freelancer is someone who offers services for a fee. In general terms, a freelancer works independently with no expectation of a permanent or long-term relationship with a single employer.
Why Would You Want to Freelance?
If you suddenly get laid off, you'll need to do something in order to keep an income stream coming in. The sooner you can do that, the less financial trouble you'll be in. While you can look and look for jobs and hope you get hired, you could decide to freelance on day one and try to find work independently.
If you've had an urge to be your own boss anyway, becoming a freelancer may be a good way to do it. You can even continue your job search while you freelance.
What Kind of Work Do Freelancers Do?
Freelancers can be asked to do just about any kind of work you might imagine. Here are just a few of the most popular types of freelance services:
- Freelance writer
- Freelance desktop publishing services provider
- Freelance virtual assistant or virtual professional
- Freelance bookkeeper
Basically, anything you might consider doing in your own business, you can do on a freelance basis under your own name. In most cases, even in those professions where a license is required.
What Do You Need to Freelance?
To freelance, you basically just need to have something of value you can offer to potential clients. Most people draw on their employment experience and offer freelance services in areas in which they are especially talented. The following items are also useful for those who want to freelance:
- A website to promote yourself
- A dedicated business phone or cell phone number on which prospects can reach you
- A business card
- Ideally, a business address (such as a post office box or mail box service)
- A portfolio of your best work
- Ideally, a few references, but you will build those as you go along
How Do You Find Freelance Work?
The answer partly depends on the type of freelance work you want to do. But here a few freelance job resources you might consider:
- Craigs List - www.craigslist.org
- Guru - www.guru.com
- ELance - www.elance.com
- VWorker (formerly Rent-a-Coder) - www.vworker.com
Some freelance job sites are free - some charge a renewable fee in order to bid for jobs. In some cases, a freelance job site might offer both free and paid membership, but in such cases the jobs on which you can bid as a free member are usually very limited.
Some freelancers join a union that can also provide job opportunities.
You can also look for opportunities to get free advertising your freelance services - including CraigsList and posting your profile on freelance sites.
If you can become part of a network affiliated with your services, that's always helpful. You should also post a profile on social networks, such as LinkedIn (www.linkedin.com).
How Do Freelancers Handle Taxes?
Like any job or business, freelancers need to meet their federal, state and local tax obligations. This means filing any estimated tax returns, just as you would if you started your own business, except that your taxes are filed under your own name and social security number instead of your business name and tax ID number. Any clients who pay your more than $600 in a calendar year are required to provide you with IRS from 1099 reporting your earnings.
Estimated taxes are filed with the IRS (and in most states, with your state) on a quarterly basis. The IRS provides forms to help you estimate your taxes so you send in the right amount. Not paying your estimated quarterly taxes can result in interest and penalties from both the IRS and your state.
What are the Major Advantages of Being a Freelancer?
If you freelance, you can usually set your own hours. You may be extremely busy one month and at a standstill the next month in your freelance practice. Use the slow times to rest up and to find new ways to find freelance gigs in your field. Also use the time to improve your website or investigate other ways you can market your freelance services.
Freelancing is what the "American Dream" is all about for many people. Low costs and little time and hassle to get started with a great deal of independence. In the vast majority of cases you will be able to work from home. You won't have to convince your employer it's a good idea to let you telecommute.
Freelancing is also a great way to help keep your head above water if you find suddenly find yourself unemployed. It can help tide you over until you find other work, all the while giving you valuable experience in client service and giving you exposure to a variety of projects. Who knows, after you've been a freelancer for a while, you may decide you like being independent and stop looking for employment!
What are the Pitfalls of Being a Freelancer?
Some people believe that being a freelancer means they won't get paid much and some employers who hire freelancers think they shouldn't have to pay much. That's because the competition is very tough and it's global - people from all around the world may offer the same services for less than half of what you can offer them. That's to be expected. Over time, your experience and your references will help you command freelance rates you can be proud of.
Keep in mind too, that a freelancer you are not obligated to accept a job. If you don't like what's being offered, keep looking for something that pays a bit more. Unfortunately, a fair number of employers who use freelancers end up taking advantage of them - by paying a substandard rate, not paying on time, etc. As you become an experienced freelancer you will learn to recognize which employers are worth your trouble and which are not.