Pocket Fuel: 10 Essential Steps to Start Freelancing on the Side

Business.com / Careers / Last Modified: February 22, 2017

Here's how to start freelancing and begin winning high-value clients while you're still working a day job that pays the bills.

With more than 54 million Americans opting to forego traditional careers and start freelancing to gain more flexibility to create a lifestyle they love, 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 freelancing 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 freelance 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 percent of people in their 20s either own their own business or want to in the near future. Of those who are not already entrepreneurs, 55 percent 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 freelancing 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 and expenses that don't just magically go away overnight once we decide to chase our dreams. Choosing to become an entrepreneur comes with great responsibility.

Before you start a freelance business, you need to get very clear on why you want to start freelancing in the first place. Once you have your bigger picture goals in mind, how you utilize your limited amount of time will greatly determine your level of success with freelancing.

Related Article:Time Is Money: The 10 Best Time Tracking Tools for Freelancers

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 percent of what my salaried job pays me, before even considering quitting to pursue my 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 and 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 from trying everything in this post first).

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.

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. This is something Caroline Beaton has had a lot of success with when she got started with her freelancing business.

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 and 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.

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. 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.

Related Article:Investing In the Freelance Economy: How Can Freelancers Help Your Growing Business

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.

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 in your freelance business.

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 and display examples of your work.
  • List your contact information and 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.

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 your freelance 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.

I typically only retain two clients for my freelance business at a time. 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 freelance 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.

Hey FirstName,

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 Starting 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.

Ryan

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 the 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.

Related Article: Hire Like Uber: How to Leverage the Freelance Economy for Startup Growth

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 your freelance business during company time (seriously, do not do this).
  • Using company resources, computers, or online tools within your freelance work.

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