Building a freelancing career is a wonderful way to break out of the nine-to-five and pave your own path. While freelancing offers plenty of personal freedom and opportunities for advancement, your earning power is limited by the number of hours in the day. You can only work so much! If you want to take your freelancing career to new heights, transitioning your gig into a full-fledged business should be your next big move. Here are five steps to make it happen!
1. Register Your Business as a Legal Entity
When you become a full-fledged business, you should seriously consider registering as a legal entity. Registering your business will enable you to work under a business name instead of your own, lending credibility to your company and showing clients that you’re not just a freelancer looking for short-term gigs. Establishing a legal entity will also separate you from your business and limit your personal liability. What’s more, structuring your business as a legal company will make it much easier to scale your venture.
You have a couple of options when it comes to structuring your business. For a number of reasons, most small business owners choose to form a limited liability company (LLC) over other business types. Forming an LLC will let you enjoy the flexibility and low taxation of a sole proprietorship with the limited liability of a corporation, so it’s a great best-of-both-worlds option for small business owners. If you want to start an LLC, review the legal requirements for your state and file your Certificate of Formation online!
2. Define Your Value Proposition
As you work to establish your business, remember that there are a million freelancers out there offering the same services as you. How will you convince clients to work with your business instead of hiring a more affordable freelancer? The key is to increase the value you provide — this is your value proposition. If your target demographic is other business owners, your value proposition may involve saving them the hassle of finding, hiring, and managing freelancers on their own.
Another way to boost your value is to narrow your niche. Choose a specific niche in your industry and stick to it! For example, web developers could specialize in e-commerce app development while writers could try offering healthcare copywriting. This will enable you to offer highly specialized services and get away with higher rates than those charged by general freelancers in your industry.
3. Create a Robust Online Presence
Developing an online presence for your business is a great way to boost the perceived value of your services. While you may have been able to get by without a website when you were freelancing, continuing to sell your services over freelancing platforms will hurt your business credibility. If you haven’t already, now is the time to build your own website and create social media accounts for your business. Switching from personal branding to business branding will also help you look more legitimate and attract higher-paying clients.
4. Establish a Scalable Bookkeeping Process
It may have been easy to keep track of your finances as a freelancer, but things will get a lot more complicated after establishing a business. You will have new expenses, tax requirements, and reporting obligations. Establishing a scalable accounting system now will ensure you can take on more clients and outsource work to freelancers as your business grows — without running into major bookkeeping issues. This will also help you organize your eligible business deductions for tax time so you can maximize your yearly profits. As Lisa Wells explains, separating your business and personal financial accounts will make this all much easier.
5. Find and Hire Freelancers
You may be really good at landing clients and doing your freelance work, but what about everything else that goes into launching a business? Think bookkeeping, social media management, marketing, website design, copywriting, and more! Do you have the skills — or the time — to tackle these tasks on your own? Outsourcing work to freelancers will help you get your business up and running quickly and leave more time for you to work on expanding your client base. You may even want to get a virtual assistant who can help you manage and tick off miscellaneous tasks on your daily to-do list.
Are you ready to take your freelancing side hustle to the next level? If your freelancing gig has plateaued and you’re looking for ways to grow, launching a business is a great next step! Turning your freelance job into a legitimate business will let you scale your venture unhindered by time constraints and finally stop trading your time for money. What are you waiting for? Start planning your new business today!
A few years ago, burned out and miserable from his job in corporate marketing, Lance Cody-Valdez decided it was time to invest in himself. He quit his job the following day and used his meager savings to stay afloat as he built a career as a freelance writer and content marketer. He created free-lance-now.com to help others use freelancing to escape the 9 to 5 daily grind.