How To Start A Freelance Business Part 2
(Business Entity, Contracts, Legal)
By
Professor Theodore Henderson
Let’s be real. The legal stuff is boring. I know you were thinking it and I agree. There, we said it, so now you do not have to! And, guess what? You’re right! It can be complicated and tiresome, and, honestly, checking out legal advice can be a terrific precursor to a nap. However, it is so incredibly essential to make sure that your business is acting ethically and lawfully. Understanding the legal components of freelance work can be a headache. However, it is nothing compared to how you would be feeling if you found yourself in legal or financial trouble.
When beginning a freelance business, among the things that you will need to become familiar with is the legal requirements for your industry. Likewise, for the region that you live in.
Although, there is a disclaimer: this blog post is not offering legal recommendations.
It will be providing some guidelines of things to consider. However, it is not a super extensive list on purpose. The laws and policies differ from location to location, so you should do your research and study appropriately. Also, when you have a moment, be sure to read my previous posts, Your 7 Minute Guide To Become A Freelancer and How To Start A Freelance Business Part 1. These are all part of my How To Start A Freelance Business series.
[the_ad id=”8164″]
Start a Freelance Business
Everything Legal; Taxes, Principles, And Contracts
Legal Elements
The traditional legal elements applicable to self-employed businesses differ from state to state, so you must completely do your research study. But, in general, you will require to think about registering for taxes and company registration– including business structure and ownership.
You might also require to get additional insurance. If you intend on working from home, some of the home insurers do not cover companies, so you may have to get extra business insurance coverage. Consult your provider and see what is possible for you– just in case.
[the_ad id=”10000″]
You might be required to investigate some other things: copyright law, exclusivity stipulations, and how credit will be awarded. You need to also explore information defense principles, along with how to cope with conflicts of interest.
It is much better to be safe than sorry when you go to start a freelance business. It will be well worth your time to do substantial research into your freelance business’s legal requirements in your location and market. When it concerns the law, being proactive is better than being reactive.
1 Business Conduct, Principles, and Values
Of course, there is a difference between legal and ethical things. Even if something may be lawfully acceptable, it does not imply that it is moral or ethically acceptable. While it may appear appealing to cut corners or disregard certain areas, everything will come down on you when you are a freelance business.
You are the only person on the line; your habits and your track record will make or break you, and, subsequently, your business could be at risk.
While clearly standard business principles and expectations still apply to freelancers. This, obviously, indicates that you should pride yourself on being trustworthy, productive, open-minded, and certified, along with displaying stability and commitment.
[the_ad id=”7341″]
You will require to keep communication open and honest. You need to always keep your client approximately date with your progress and keep them in the loop– you should think about yourself working with clients, not for. Do not offer unrealistic expectations about task due dates. It is far better to give yourself a more extended deadline and finish early than not. If something is unclear or you are not sure about something, do not be afraid, and do not just struggle through; ask questions.
Also, do not take or plagiarize, and ensure that you are honest at all times. Keep in mind, you are still an expert; do not become overly casual and sloppy as if you are in your pajamas (even if you are). In fact, to be sure it doesn’t happen, put on real clothes. They can be casual. When you start a freelance business the keyword in the phrase is business!
Contracts and Other Legal Documents.
Agreements explain precisely what you and your customers get out of one another. They can detail your work terms, for instance, the variety of revisions or edits you will use, or payment expectations.
Contracts can likewise describe the details of the work you will be delivering. This is vital so that your client can not demand uncompensated extra work. You must detail plainly what work precisely you will be providing. Also necessary to the process is a guarantee of timeframe. This way, you and your customer are on the exact same page. You should likewise layout the timescale of the job, along with any deadlines.
And obviously, the agreement should consist of the terms of payment. Will you be compensated by the hour or a lump sum? Will it be paid in segments or as soon as the assignment is completed? Clearly, it is crucial to describe payment terms.
You could just write a list of your conditions to send to your clients or connect them to a webpage describing your regards to service. You are not always required to create a distinct one for each client (though, depending on the service you should), but you can utilize a template.
Contracts can be utilized to secure and protect you from customers attempting to use you in some way. For example, trying to get more work for no extra money. Trust your instincts. However, make sure you are legally safeguarded.
If you utilize agreements properly, they can shield you from some trouble with any legalities. Guaranteeing that your potential issues in regards to service, requirements, and expectations are clearly described is critical.
2 Why It Is Essential To Value Your Work And Your Time
Pricing and how to charge can be complicated for freelancers to identify. You must value your time correctly yet, still be inexpensive for your client targets.
Clients often expect you to provide the world yet only want to spend a few pennies. This is a lousy analogy. However, some clients will require you to do what seems like running around the globe and back for them. Yet will not want to compensate you enough to pay your rent or keep the lights on. Is that any better?
The nature of the analogy is that some clients will try to take advantage of you. Your job is to both recognize the behavior and not let that happen.
There are plenty of freelancers out there, and clients typically want to pay the least or lowest rate possible for work. Unfortunately, opportunities are, someone will continuously be willing to do something for less than you.
Nonetheless, it is necessary to pick a rate that you feel is equitable and appropriate. At the end of the day, you have living costs, and you are entitled to be compensated for your labor. Remember, it does you no good to put forth the effort to start a freelance business but not have it pay enough to make a decent living.
[the_ad id=”7070″]
Selecting a niche.
In some cases, budding freelancers appear to think that it will get them more work by being less specific about their work. This is not always the case. When you start a freelance business, as with any other business, you must select a proper niche to give yourself a better chance of success.
For example, calling yourself a general content writer vs. leading-edge tech content writer. It makes you sound more professional and will impart more self-confidence.
Having a specific niche implies that you can charge a premium price for a specified service. You do not have to define your niche immediately. However, it is something to do when your service grows.
Time management.
While this can seem like a no-brainer, time management is vital to effective freelance work. Naturally, time management will play a part in your pricing. Obviously, it is slightly unreasonable to charge your customers for the cost of your putting things off! Charge your clients so that it makes good sense for you yet still allows you to be as productive as possible.
There is a risk of taking excessive benefit of the flexibility and utilizing it as a reason to relax and put things off. Having actually devoted days off and setting exact times to unwind or have leisure time is the best way to increase your performance.
Some freelancers pick a per-hour rate. Whereas others may be a per-job cost. It is totally up to you. Consider the hours of the day that you would ideally be working, and structure your income and working hours to match this.
You likewise are required to be focused and disciplined. There are numerous excellent time management and organizational strategies that can be executed. Lists and calendars are no-brainers. Setting deadlines, also, providing project updates to your clients is a great way to stay on task while demonstrating professionalism.
Having a clear structure for your day, dividing your tasks into subtasks, and setting timers are little methods to handle your time. Determine which times of day you are most productive. Is it right after your morning coffee? If so, do your high-energy jobs that need the most effort then, and after that, do less extreme tasks in the mid-afternoon lull.
In essence, however, find what works for you. There is no one size fits all technique to freelance work; you get back what you put in. Please don’t be like so many who start a freelance business and not implement a time management system. It will cost you time and clients if your time isn’t managed properly.
Value your time.
As the expression goes, time is money. You deserve to be paid well for your work. Do not undervalue your services.
Make certain you have actually done some research into what your comparable competitors are charging. Also, look into what “standard or regular” workers would charge for the same item. If you are spending extra time on your jobs and doing things outside your work scope, you should work out payment increases.
If customers approach you asking you to work for less (or totally free), use your best judgment. You have no responsibility to work for any less than you feel that you are worth.
At the end of the day, you are an expert in your field, and you have valuable skills and experience, and you are worthy of being paid for these things. Do not forget to think of your long-term monetary objectives, too.
Additional Resources – Start A Freelance Business
Fiverr – Start your business immediately and offers free training for new or established freelancers.
Flexjobs – FlexJobs is a subscription service for job seekers that features flexible and remote jobs.
Virtual Vocations – A job service that provides job seekers with hand-screened remote job leads
FocusMe – Time management and productivity application.
Are You Ready to Go Freelance?
Visit our Recommended Business Tools page to review several excellent online business & marketing applications.
About The Author
Theodore Henderson works with business owners, entrepreneurs, and corporate professionals on their business skills, marketing, and leadership strategies. He is an Amazon best-selling author, a Certified Career Coach, Business Skills & Leadership Coach, and a Certified Social Media Security Professional Powered by CompTIA.
–
Visit The Wisdom4Business Blog for the complimentary series on business startup and entrepreneurship.
–
Also, visit TheHealthyBusinessOwner.com for timely and useful tips and strategies for living a healthier lifestyle.