A friend and former coworker of mine has branched out and become a full-time freelancer in the graphic design space. It’s an incredible time we’re living in. Technology has created the tools that allow freelancers like myself and my former coworker to quit our jobs, become our own bosses, run our own mini-empires, and maybe most importantly, AVOID TRAFFIC!
What’s really interesting about my former coworker and I, is that we’re doing the exact same work we used to do for the company we worked for, but now we’re making 100% of the profit. That’s one of the great things about freelancing; you get to keep the whole pie for yourself.
When you work at an agency, or any company for that matter, your work produces a percentage of the company’s overall profits. But those profits that you create don’t make it all the way to your paycheck. En route to your paycheck, the following people take a cut of the profits that your work created:
- Your boss.
- Your boss’s boss.
- Your coworkers who don’t pull their own weight.
- The sales team.
- Your boss’s landlord.
- And all the other overhead that the company has to pay for.
So for whatever profit you create for the company, a large percentage of that profit doesn’t make it into your paycheck.
But with freelancing it’s different. With freelancing, you’re the boss, you’re the salesman, you don’t have coworkers, you’re the landlord, and there’s no overhead. These added responsibilities mean that you get to take home 100% of the profits that your work creates. When done properly, freelancing is a beautiful thing, and you get access to all the profits that your hard work creates.
My friend recently asked me for some advice on freelancing, and the long email I sent her was a good read and after writing it I thought, wow this would be a good blog post. So here are some tips for new freelancers.
11 Tips For New Freelancers
1. Get a separate bank account.
Business is messy. And you need good accounting to keep things in order. When you’re in business for yourself you’ll have lots of transactions going in and out of your bank account. Money will be going out the door with your expenses, and new money will be coming in the door when clients pay your invoices.
The last thing you need is for your business transactions to be mixed with your personal transactions in one bank account. Go to your bank and open up a second bank account that you’ll use solely for your freelancing business.
2. Use QuickBooks for your accounting.
Accounting is the language of business. If you don’t know your numbers then you don’t know anything. Having a basic understanding of accounting really helps out when you are a full-time freelancer. So I advise you get a basic understanding of accounting before you start freelancing, regardless of what niche you freelance in.
If you need to improve your accounting knowledge, I recommend this book.
Once you read that book and have a basic understanding of accounting, then you’ll easily be able to use QuickBooks to manage your accounting.
I recommend using QuickBooks to manage the accounting in your freelance business. It couldn’t be easier or more convenient. And their dashboard is oiceery intuitive and it doesn’t cost that much each month.
You can link QuickBooks to the bank account that you use for your freelancing business and also to any credit cards you use for business expenses. Then, anytime a transaction comes across your bank account or credit card it will show up in QuickBooks and you can quickly categorize all revenue and expense items.
The result of this transaction categorization work is that you will be able to produce an accurate profit and loss statement for your business, for whatever time period you want to look at. Every sale and every expense will be recorded in QuickBooks, and you’ll be able to see if you’re profitable, how you’re making your money, and where your expenses are going to. Additionally, you can also use QuickBooks to keep track of the invoices you send out, so you’ll always know who still owes you money.
Having a basic understanding of accounting, and using QuickBooks to manage your accounting, can help you keep track of your freelance business operation and keep your business organized.
3. Invoice with Square.
Have you used Square yet? If not, then I highly recommend it if you are a freelancer sending out invoices via email. Square’s platform is much quicker, more convenient, and more intuitive than PayPal, and the invoicing fees are also lower.
I love sending out email invoices via Square, and I find using it a much nicer experience than using PayPal.
The one downside with Square is that as of this writing you can’t invoice to international clients outside the US.
4. Use Google Voice.
Google Voice is a must have if you’re running a one-person freelance business. With Google Voice you get to choose a phone number for your freelance business and when someone dials that number, Google Voice will forward the call to your cell phone. This allows you to send out a business number to clients and list a business number on your website without having to give out your cell phone number or set up a second phone line.
Google Voice is free. And it also has a few other cool features. When someone calls your Google Voice number and your phone rings, when you pick up, a computer voice says Call from and then it plays a recording of the person who called you saying their name. And at this point you can decide whether or not you want to take the call or send it to voicemail. And Google Voice also transcribes voicemails and sends them as text messages to you. Google Voice is so cool!
5. Use Google Calendar.
Another free Google product I love using for my freelance AdWords business is Google Calendar. When you’re a freelancer, you are constantly juggling multiple clients and projects, and it gets tough to manage sometimes.
I literally don’t know what I would do if Google Calendar didn’t exist. It’s great for managing all your projects and tasks, and it’s very easy to use.
I like to give different kinds of tasks a unique color. And then when I complete a task I change the color of the task to gray to let me know that the task has been completed. At the end of the day when all my tasks are grayed-out, then I can rest assured that I’m on top of everything and that I’ve completed all the tasks I needed to complete that day.
6. Don’t worry about getting stiffed.
Over the last few years I’ve worked with hundreds of people, and I have only been stiffed once. Many new freelancers worry about providing work before they get paid, but if you deal with decent people, then you really shouldn’t worry about getting stiffed.
Now, if you’re a web designer or make software and you do huge jobs that cost thousands of dollars, then yea, you want to set up a payment plan and get paid in increments over the life of the project.
But if you’re an article writer, a graphic designer, or a proof reader and your projects only cost clients a couple hundred dollars at a time, then don’t worry about getting stiffed.
Some clients take longer to pay their bills than others, and sometimes you have to send a few respectful reminders, but hardly anyone out there in the business community makes it a habit of stiffing the people they work with.
The vast majority of people in the business community pay their bills. Don’t worry about getting stiffed. Just do great work and worry about making people happy.
7. Use an onboarding form.
One of the best innovations in my freelancing business has been the use of an onboarding form. I found myself constantly asking new clients the same questions over and over again, and it was a process that was eating up a lot of time. To save time and streamline my onboarding process, I create this form for new clients to fill out. Now, instead of sending emails back and forth and typing up the same questions over and over, I just direct new clients to my onboarding form, and this helps me save a bunch of time.
Another benefit of an onboarding form is that is separates the serious clients from people who just want to waste your time or get free information from you.
I used to have a problem where I spent too much time on phone calls with potential new clients. Some people would keep me on the phone and ask me tons of questions. I would give them all this free information, and then they wouldn’t even end up hiring me.
Now I’m able to talk with potential new clients for a few minutes and then get off the phone quickly and direct them to my onboarding form. If they’re serious, then they’ll fill out the form and we’ll move forward. And if they’re not serious, then I won’t hear from them again and I will have avoided wasting time on them and giving them free information.
8. Listen to actions, not words.
I’m a jaded old man these days. I’ve been lied to too many times.
Just like Rober De Niro in Meet the Parents, I have my own circle of trust. When I deal with someone and they tell the truth and act as a trustworthy person, then I put them in my circle of trust and I begin trusting them and their word.
But before someone gets into my circle of trust, I don’t believe anything they say. Before someone is in the circle, I let their actions, not their words, determine if they are trustworthy of not.
Everyone I talk to in the business world has all these big plans, ambitions, and they tell me all the great things we’ll do together, and then about 20% of people actually follow through on what they said they were going to do. For that 20% that tells the truth, I put them in my circle of trust and do business with them. For the other 80%, the all talk losers, I just ignore them and move on.
When you’re in business, you’ll come across many people. Most people are all talk and cannot be trusted. But there are some people who tell the truth and can be trusted.
Do business with the trustworthy people and ignore the people who are all talk.
And don’t believe anything anyone says until they are in your circle of trust. Before someone gets in your circle of trust, listen to their actions, not their words.
9. Don’t deal with idiots.
This is the most important tip on the list. Don’t deal with idiots. We’ve talked about this before.
10. Find feeder clients, and keep them happy.
I survived my first year in business and am thriving now in a large part thanks to my feeder clients. Feeder clients are clients who send you lots of repeat business. They can be a client that hires you over and over again for repeat work for their own business, or they can be the kind of client who hires you over and over again for outsourced work for their own clients. The distinction doesn’t matter. I classify anyone who hires you on a repeat basis as a feeder client, whether it’s for work for their own business or for their clients’ businesses.
The hardest part of freelancing is selling and finding new clients. So if you are able to find a client who sends you repeat business, love them and cherish them and work as hard as you possibly can for them.
Feeder clients are essential to running a profitable freelance operation, and there’s really no way to put into words how great they are.
Love your feeder clients, do great work for them, and keep them happy and coming back.
11. Time is money.
When you are a freelancer, you are selling your services for money. Providing services takes time. Therefore, time is money.
Let’s look at this in the form of an algebra equation.
Your services = money.
Your services = time.
Time = money.
Your time is worth money. Every minute you spend working but not providing billable services is time spent working but not getting paid. If you find yourself doing the same tasks over and over, figure out how to streamline and automate those tasks. Always look for ways to get better and more efficient at your work.
Time equals money. Never forget that. And never let anyone abuse your time, and always be respectful of other people’s time.