7 Tips to Become a Successful Freelancer

Freelancers are often viewed in a different category than entrepreneurs, but the two career paths share a number of similarities.

“Freelancing isn’t just about selling your talents, advice or wares,” wrote Michelle Goodman in My So-Called Freelance Life. “Working for yourself as a creative professional also means playing chief executive, bean counter, sales rep, marketing maven, tech support, contract manager, and admin assistant.”

Juggling lots of roles, forging your own path, being the master of your own destiny — freelancers, like entrepreneurs, are no strangers to the challenges of running a business and the combination of exhilaration and anxiety that comes when you’re calling the shots.

So why freelance? Some people freelance to explore a side interest or passion that they can’t fulfill in a full-time career. Others simply aren’t a fit for a 9-5, corporate environment and would instead prefer to be the architects of their careers.

Whatever your reasons for freelancing, it’s important to recognize and treat your freelancing career as a business, even if it’s in a side hustle stage. Just as you make a plan to launch a business, that same diligence should inform your freelance career. We’ve compiled seven tips to help you do just that.

1. FIND YOUR NICHE.

If you’re thinking about freelancing, you likely have a particular skill or service in mind—graphic design, photography, videography, writing or marketing, to name a few.

Yet you can give your freelancing business an edge by reexamining what you offer and finding a niche. If you’re a writer, for example, perhaps you excel in a particular industry like finance, real estate or higher education. Or you’ve honed your skills in food photography or lifestyle images.

You don’t want to make your focus so narrow that you risk missing out on work, but by understanding what makes you different from other freelancers, you can more effectively target prospective clients and leverage that competitive advantage.

2.MAKE A PLAN.

Spend some time creating a condensed business plan that will help guide your freelance business. At this stage in the game, you may not need to dig deeply into financial or operational details, but you should identify:

  • Your vision — what are your goals?
  • Your services — what do you offer?
  • Your competitive advantage — what makes you different?
  • A competitive analysis — who are your competitors?
  • A market strategy — how will you launch and position your business?

It’s tempting to just dive in and start freelancing, but putting some strategic thought into where you are and where you want to go will help give you a framework that you can expand and refine as your business evolves.

3. MARKET YOURSELF.

Once you’ve identified your vision, your services and your niche, you can begin marketing your freelance business. Consider creating a basic website that showcases work samples (if available), as well as information about you and what you offer.

You’ll also want to use at least one social media channel, if you’re not already. For freelancing, Twitter and LinkedIn can be particularly helpful. LinkedIn can help you find prospective clients and showcase your work. And depending on your niche and services, you can likely find recurring Twitter chats that will help you virtually network and build your brand. You could also set up lists to follow prospective clients. Many freelance writers, for example, will follow editors on Twitter and keep an eye out for calls for pitches.

Don’t forget business cards (you’ll need those for our next tip!). And if, for some reason, building a website isn’t feasible right now, put together a portfolio that you can send to prospective clients that includes your best work samples. If you find yourself trying to juggle a number of attachments, try displaying your work in a PowerPoint deck, then including applicable links to see the full work or get more information.

Then, start spreading the word! If you’re freelancing while also maintaining a full-time job, promote yourself cautiously so that you don’t run afoul of your employer. Some employers don’t mind if employees freelance, as long as they’re not working on side projects on company time and there’s not a conflict of interest. If you feel comfortable asking, you might want to check with your supervisor or HR department.

Share the news about your freelance business on your social media channels. And if you have a group of trusted colleagues (that may also include prospective clients), it’s never a bad idea to send a quick, personal email to let them know more about what you’re doing. If you have a blog on your website—or you blog on a site like Medium or LinkedIn—consider writing a post that introduces your freelance business and what you offer.

4. BUILD YOUR CLIENTS.

Clients, of course, are the critical element of any freelance business. How you find clients may vary a bit by the type of work you do, but you can never go wrong with referrals—and that’s why a strong network is so important.

If you find yourself needing to build your network, consider setting a goal to attend one networking event a month. Look for groups or organizations that align with your services and/or niche. Let’s say, for example, you’re a photographer who specializes in residential photography. You might want to find a Realtor meet-up so that you can introduce yourself and let people know how you can help them.

Professional organizations can also be effective networking channels. Try searching this comprehensive list of professional associations. Or consider attending local events like 1 Million Cups or Creative Mornings. One other tip? Search to see if your community has an organization for freelancers. In Kansas City, the Freelance Exchange offers monthly educational sessions, networking happy hours and a directory of freelancers that’s frequently searched by prospective clients.

Depending on your freelance niche, you may also want to pitch ideas or services. Writers, for example, often pitch publications to land story assignments, typically in high-profile magazines or digital outlets. A pitch letter isn’t that different from a cover letter: you introduce your idea, why it’s a fit for that publication and why you’re the best person to write it. A book like the Writer’s Market can help you identify publications to pitch, including approximate pay rates and contact information.

Graphic designers, videographers and photographers may also find themselves in a position to pitch work. A graphic designer, for example, might compile a short list of dream clients, then send a direct mail piece that serves both as a work sample and a way to introduce themselves. Whatever the specifics of the pitch, make sure you thoroughly research the prospective client and create a thoughtful, tailored pitch package. This isn’t the time to copy and paste a form letter. Instead, you want a prospective client to know that you understand what they do and are the best person to help them with the work they need done.

You might also want to keep your eye on freelancing job boards, of which there are many. Just be careful to do your due diligence on a prospective client, if possible, and watch for under-charging, which can be a rampant problem in the freelance world.

5. TAKE CARE OF (YOUR) BUSINESS.

Whether you’re going full-on into freelancing or starting your freelance career as the smallest of side hustles, it’s so important to treat your freelance work as a business from day one.

To start with, you’ll want to set your rates. This can be one of the most difficult parts of freelancing! Do a little research or, if you know freelancers, ask around to see if you can get a ballpark figure. You’ll typically charge hourly, per project or as a recurring retainer, so it helps to think of all of those scenarios and be prepared for whatever a client requests.

Some clients will have you sign a contract, and possibly even a non-disclosure agreement. You can also create your own contracts to help protect yourself and your work. If working with an attorney is out of your current budgetary scope, try a tool like Contract Canvas that can help you set up basic contracts designed for creative professionals.

Consider creating some branded templates for documents that you’ll need as a freelancer, including an invoice, project proposal and scope of work.

And speaking of invoicing: prepare for the financial side of freelancing! Tools like FreshBooks can help you manage and track your invoices. You should also set up an introductory session with an accountant. Even if you’re not making much money from your freelance business at first, it’s important to understand how much money you should withhold to cover federal, state and local taxes, as well as know what sort of deductions you should track—including mileage and expenses—to help lessen your tax burden. If you do freelance as a side hustle, it can get complicated to mix w-2 with 1099 income, so let your accountant handle it. Plus, as your freelance business grows, you’ll already have the processes and knowledge in place so that you don’t find yourself with an unexpectedly large tax burden or other financial problem.

6. SET A SCHEDULE.

Freelancing brings with it a number of variables. Maybe you’re juggling freelance work with a full-time job. Or perhaps you’re learning to work from home, or setting up a remote office at your favorite neighborhood coffee shop.

Whatever the specifics of your freelancing, set a schedule, especially if you’re still working full-time. Decide how many hours you’ll commit to freelancing per day and if you’ll do any work on weekends. Projects and deadlines might temporarily derail your schedule, or necessitate more freelancing hours than normal. But if you can start freelancing with a schedule in mind, you’ll be in a better position to set expectations—for yourself and your clients—and make sure you’re giving yourself some downtime, too.

7. WHAT’S YOUR END GOAL?

Hopefully you gave this some thought while you were compiling your business plan. It’s highly likely your freelance business will evolve—maybe you’ll learn new skills to add to your services, or you’ll develop another niche.

Yet having a general idea of where you’re headed can help add structure and purpose to your work. If you’re freelancing as a side hustle, do you want to eventually freelance full-time? If so, you’ll need to consider how much income you’ll need to bring in to cover both your business and living expenses.

You may opt to freelance on the side for the foreseeable future, and there’s nothing wrong with that. Just be sure you’re attuned to your physical and mental health and giving yourself enough downtime. As your workload grows, you may also want to track your maximum output, whether that’s a specific number of projects, clients or another metric. It seems counter-intuitive to say “no” when you’re focused on growing your client base, but if you can’t feasibly produce the work—or if the quality will suffer as a result—it’s better for your business in the long-term to decline the work, or see if there’s something else you can take off your plate to accommodate the new request.

Deep breath. We’ve covered A LOT. And you probably have at least a few things to do as you launch your freelance business. Keep this resource in mind: Kauffman FastTrac. This online, self-paced course is designed to help entrepreneurs launch their businesses. And because freelancers are, in essence, entrepreneurs, there’s a wealth of insight and tips that you can apply to your freelance business: identifying a target market, developing your brand and marketing, understanding your competitors and setting financial goals. Register for FastTrac and you’ll be ready to freelance like a pro in no time!

How to Pick the Right Entity: LLCs v. Corporations

When you create a business plan, you probably talk about finance, marketing and similar topics. But have you ever stopped to think about what kind of business entity makes sense for your new business?

There are a lot of options out there including LLCs, Corporations, Non-Profits, Partnerships, and more. LLCs and Corporations are the most popular for entrepreneurs creating for-profit companies. And in recent years, LLCs have been the favorite. But they are not always the best.

Below are a few thoughts to help you decide if an LLC is for you:

FORMATION

It’s easier than ever to form a business online. Most Secretaries of State allow you to form LLCs and corporations through their website and most charge a relatively small fee to do so (usually less than $200).

You might be surprised that when you form an LLC you usually don’t have to provide too much information to the state. Some states only require your business name and registered agent. Those that require more often don’t have too many more requirements.

That makes LLCs pretty attractive because when you form a corporation you often have to provide more information such as information regarding stocks, officers, directors, and more.

INTERNAL GOVERNING DOCUMENTS

Every business needs a set of governing documents. For LLCs, this usually just means an Operating Agreement. That document will outline each owner’s rights and responsibilities with respect to the company, including voting rights, economic rights, and more.

This is another factor that makes LLCs attractive because your governing documents are relatively simple. Further, LLCs are flexible. You can have different types of owners, different management structures, and you can choose how you want to be taxed.

As a comparison, corporations often have Bylaws, Shareholder Agreements, and a small number of other governing documents.

OWNERSHIP ISSUES

One big drawback of the LLC form is that it can’t issue stock options the same way a corporation can do so. Accordingly, if your business plan calls for stock options, you may need to consider forming a corporation instead.

MANAGEMENT

You’ve probably heard about shareholders, boards of directors, officers, and the like. Those are typical of every corporation. It is owned by shareholders who elect a board of directors who hire officers (presidents, treasurers, etc.).

LLCs typically don’t have all of those roles. They usually just have owners (called members) and one or more “managers” who make decisions for the company. This is often a good thing because most new companies and most small businesses don’t want to deal with the complicated management structures in corporations. And further, if you really want a board with officers, you can always create those in your LLC’s operating agreement.

TAX ISSUES

Perhaps the biggest factor you should consider is tax issues. If you form a corporation, you’ll effectively be taxed twice–once on the corporation’s profits and once when you issue dividends to shareholders. For this reason, many corporations make an “S-Corp” election to avoid the corporate-level taxes. That is often a good idea for small businesses, but it is often a bad idea for high-growth potential startups.

This is where LLC’s come into play. When you form an LLC, you get to choose how you want to be taxed. More specifically, you can choose between sole proprietor taxation, partnership taxation, S-Corp taxation, or C-Corp taxation. This is a big benefit of choosing the LLC form for your new business.

NEED MORE HELP?

If you are looking for more tips on how to structure your new business for success, consider enrolling the free FastTrac program offered by the Kauffman Foundation. Their online courses dive deeper into these issues and more. Learn more and sign up for free at www.fasttrac.org.

CONTRIBUTOR: Chris Brown, Attorney/Founder, Venture Legal

Exhibiting at a Fall Festival or Event? Make the Most of it.

Temperatures are dropping, leaves are falling, and there’s a good chance a number of fall festivals and events are popping up in your area!

Exhibiting at a local fall festival or event is an effective way to build your brand recognition and your customer base. If you’re new to the market, exhibiting your products or services at an event booth can help you spread the word about your business and what you have to offer. And if you’ve been around for awhile, exhibiting at an event or festival can help you reach a previously untapped customer base, launch a new product or service, or conduct real-time market research.

One of the most stressful parts of exhibiting at an event or festival is prepping! We recommend making a list so that you don’t forget anything. And to help get you started, we’ve compiled four must-haves that you should bring with you, regardless of your business or industry.

4 THINGS TO BRING TO YOUR FESTIVAL OR EVENT BOOTH

1. YOUR ELEVATOR PITCH

One of the biggest advantages to exhibiting at a festival or event is that you’ll have a captive audience. A steady stream of people will be walking by and visiting your booth. And that means you need to be ready to (briefly!) tell them what you’re all about. If you haven’t yet developed an elevator pitch, they’re typically one minute in length. That’s not much time, so you should be able to clearly and succinctly articulate what you do and why you’re different. In an action-oriented setting such as an event or festival, you may also want to include a CTA. Will you have a product for sale that you want a prospective customer to try? Or could they sign up for your email list to get product or service updates? Think about what you’d like your booth visitors to do, then tailor your elevator pitch accordingly.

2. INVENTORY

Sounds like a no-brainer, right? But there are a couple of inventory-related questions you’ll want to think through before your event. The first is how much inventory you’ll bring. See if you can get an idea from event organizers or a fellow exhibitor about how many attendees are expected. Then, plan to bring inventory to cover 5 to 15 percent of the project attendance. As you exhibit at more shows, you’ll have the sales data to refine your inventory so that you’re bringing just enough. Depending on what you sell, you might also consider offering samples or testers. And think about how you want to display these items.  If this is your first event or festival, you don’t have to blow your annual marketing budget on your display. Your booth, like your website, is fluid and will evolve over time. That said, a few display fixtures and a table skirt (use a clean and pressed black bed sheet, in a pinch) can go a long way in making your booth look polished and professional. One more thing: make sure you can take payments, including credit cards. Bring change for cash payments and equip your smartphone with a Square reader or the PayPal Here app so that you can process card payments with your business account.

3. MARKETING MATERIALS

Business cards, brochures, informational postcards — you’ll want to be sure to have a few marketing materials on hand that prospective customers can take with them to learn more about your business, stay in contact and make a purchase. If you haven’t yet developed marketing materials, consider this as good a reason as any to create an introductory piece! Start with business cards and an informational postcard that tells people more about your story and what you offer. Include ways to connect, including your website and social media channels. You could also create a tailored marketing piece like a coupon that will help you track the efficacy of the event or festival. You’ll want to track your sales during the event, of course, but you might also consider giving people a coupon with a code for a percentage off a purchase, or another perk like free shipping. That way, you can decide if this particular event or festival is a good fit for your business and worth making a recurring part of your marketing and outreach strategy. If you’ll be exhibiting at multiple events or festivals, you might also consider in investing in booth materials like a branded table skirt and a pop-up banner. They’ll give your booth more polish and also help you draw in attendees to learn more about your business.

4. AN ASSISTANT

Let’s clarify: bringing someone with you to help staff your booth isn’t mandatory, but it’s definitely a good idea, especially for multi-day events or festivals. For one thing, booth hours can be long, and it’s nice to have company and conversation.If you’re exhibiting at a large event or festival, it might be worthwhile to have someone with you so that you can talk (and sell) to more people. Don’t yet have employees? That’s not a problem. See if a friend or family member will help out (ideally for compensation, rather than as a favor). Just make sure that if the person working with you isn’t an employee, they’re well-versed in your business so that they can confidently talk to prospective customers. Having someone with you can also help boost other marketing efforts, including getting photos and video to use on social media and your website. And you can flip a coin or play rock, paper, scissors to decide who’s going on food and coffee runs!

Now that you’re feeling more prepared to exhibit at an event or festival, what’s the best way to find upcoming events? Try searching the calendar or events page of your area Convention & Visitors Bureau or Chamber of Commerce. You might also want to check with local entrepreneurial resources to see if they have a list of upcoming events that might be a good fit.

One last tip? If you get stuck on honing your branding or elevator pitch — or feel like you need a marketing refresher — register for our free Kauffman FastTrac online course, which covers a number of topics to help you launch your business. The immersive class is self-paced, so you can take modules whenever it fits with your schedule. Just sign up, grab your favorite fall beverage and dive in!

Should You Work From Home? Answer These 4 Questions

Break out your favorite coffee mug and your best pajamas: it’s Work From Home Week!

According to Fundera, 3.7 million employees worked from home at least part of the time in 2017. That number is undoubtedly higher for entrepreneurs, especially those who are preparing to launch or just launched their businesses.

There’s a lot to love about working from home: no dress code! Flexible hours! Play your music or Netflix shows as loudly as you want! And if you have pets, furry coworkers!

But there are some downsides, too — working from home isn’t for everyone, and sometimes it doesn’t make sense for your business.

As you ponder whether working from home is the best fit, answer the following four questions to help you decide your ideal office space scenario.

1. WHAT ARE YOU LOCAL ZONING REGULATIONS?

Start here, because this will determine if you can even work from home. Check your city regulations to see if they have any stipulations regarding home-based businesses. You may also want to check with your homeowner’s association or landlord to ensure that all of your bases are covered.

If you do find something that prevents you from working from home, it might be tempting to see if you can sneak under the radar, especially if money to secure office space is tight. Don’t do it! Part of being a successful entrepreneur is adhering to a variety of laws, regulations and guidelines, and you don’t want to risk getting your business in trouble.

2. CAN YOU AFFORD AN OFFICE?

Budget is one of the biggest factors in determining whether you work from home, opt for a desk or office at a co-working space or buy or lease your own office space. Early-stage entrepreneurs, who are still building capital and revenue, are more likely to start out working from home, then expand to an outside office space as their budget allows.

If you find yourself going stir-crazy or in need of human interaction but you can’t afford to lease or buy office space, do a little research to see what’s available in your area. Many coworking buildings, for example, will offer one day a week of free space so that anyone can drop by and work (space permitting). You could always post up for a few hours at your neighborhood coffee shop. Public libraries are another popular option, especially if you prefer a quieter atmosphere.

3. HOW MUCH SPACE DO YOU NEED?

Assess your business and your workflow. If you need room for production, assembly or shipping, for example, you may find that a home office doesn’t quite cut it.

As you assess your space needs, turn a critical eye to your home. Do you have any unused space that you could use for your business, not including a work area? We strongly suggest keeping your workspace and living areas separate, if at all possible. Work-life balance boundaries — already a struggle for entrepreneurs — can easily blur when you live and work in the same place. Your commute might only be a flight of stairs or even a few steps, but giving yourself a dedicated workspace can help you maintain the separation you need to keep yourself from overwork-induced burnout.

If you do have room to accommodate your workflow — at least to start — you can furnish the space without derailing your budget. Try a kitchen supply store for affordably priced, industrial shelves that are ideal for a variety of storage. A desk or table is, of course, a must, and if you do spend a little more money, invest in a quality office chair that provides plenty of support. Make sure you have a stock of office supplies, including printer ink or toner and paper, pens, mailing and shipping supplies, filing folders, notepads and a stapler, just to name a few.

4. CAN YOU MAINTAIN YOUR IDEAL OUTPUT (AND STAY ON TRACK) AT HOME?

One of the challenges of working from home is that it can be difficult to maintain a consistent schedule. You might find you have interruptions at home, for example, especially if the kids are home from school or your pets want some extra attention.

It’s also easy to let your attention wander at home. You might step away from your desk to take care of a couple of chores, or grab a quick nap. And then there’s that pesky TV that’s beckoning you to Netflix and binge.

Of course, maybe you’re incredibly disciplined and you can work anytime, any place, no matter what’s happening around you. (If so, teach us your secrets!) But it’s worth keeping an open mind as you start working from home. If you’re curious about how much you’re working, try using a time-tracker app. And don’t be afraid to set (and spread the word about) your schedule. Let’s say you worked 8 a.m. to 5 p.m. in an office. Family members, friends and peers would generally respect that time, right? It shouldn’t be any different when you work from home. Establish your working hours, and give yourself a couple of short breaks and lunchtime.

And if, after a few months, you find that you really can’t get much done working from home, that’s OK. Check your budget and see what your options are for office space.

Ready for a bonus tip? If you do work from home, be sure to check with your accountant to see what expenses you might be able to deduct from your taxes. This is when dedicated office space within your home comes in handy: you can measure the square footage of your work space, then calculate (and deduct) that percentage of your rent or mortgage. Again, check with your accountant to understand all of your options and ensure you’re maximizing every possible deduction.

Now you’re ready to make an informed decision about whether working from home is right for you and your business. To those entrepreneurs who already work from home, we raise our coffee cups to you. Happy Work From Home Week!

An Intro to Non-Disclosure Agreements

While perfecting your new business plan and starting a business, you’ll need help. And along the way, you’ll need to share your secret sauce with people outside of your inner circle. When you do, you should consider using non-disclosure agreements (NDAs) to protect your confidential information.

In this post we’ll look at five things you should consider when working with NDAs.

1. MUTUAL OR UNILATERAL

There are two types of NDAs:

  • In a unilateral NDA, only one party is agreeing to protect the other party’s confidential information.
  • In a mutual NDA, both parties are agreeing to protect the other party’s confidentiality.

Which type you use is dictated by the circumstances of the deal. For starters, if only one party is disclosing confidential information, a unilateral NDA is probably appropriate. However, if both sides are disclosing their confidential information, then a mutual NDA may make more sense. But you should note that you may not always be able to get a mutual NDA. For example, some larger companies refuse to sign NDAs with smaller companies simply to reduce their risk.

2. “CONFIDENTIAL INFORMATION” DEFINED

Almost every NDA will include a definition of what is, and is not, “confidential.” Sometimes it will be very explicit and include a large list of items. Other times it will be simplified to something along the lines of anything that a “reasonable person would deem confidential.”

In either event, you need to ensure you know what is going to be considered confidential. And further, you should consider whether you need any exceptions to the definition (for example, information that may have been confidential at one point but later becomes publicly known).

3. RESTRICTIVE OBLIGATIONS

The next thing to consider is what the recipient is actually prohibited from doing. Depending on the complexity of your NDA, you may see one to three common restrictions:

  • The recipient may be required to use commercially reasonable efforts to protect the confidential information they receive under the NDA.
  • The recipient may be prohibited from disclosing the confidential information to third parties.
  • The recipient may be prohibited from using the confidential information for any reason not authorized under the NDA.

However, you should also consider whether there should be exceptions to those restrictions. For example, you may want permission to disclose the confidential information to third parties (but only if it is in the ordinary course of your business and only if they agree to protect the information in a similar NDA).

4. DURATION

There are various approaches to the duration of NDAs. Some NDAs will be perpetual in length, but more commonly you’ll find some pre-defined term. Often between one to ten years (five may be the most common).

The length may depend on the nature of the relationship. If you are just exploring a potential relationship, it might be five years from the day you sign the NDA. However, if you are going to be working with someone for a few years, it might be the length of the relationship plus five years. Further, consider adding a statement that the NDA should not be used to reduce any obligations a party may owe the other party under applicable trade secret laws (which exist separate from the contractual obligations under the NDA).

5. “HIDDEN” TERMS

And last, but certainly not least, always consider if there are additional terms that might be “hidden” in the NDA. For example, in a stand-alone NDA (one that exists separate from other service-related agreements), the NDA probably shouldn’t transfer ownership of IP or grant a license to IP. And it probably shouldn’t include non-competes, non-solicitations, and the like. If you need those provisions, then you probably need more than just an NDA.

DON’T STOP HERE!

In addition to legal topics, you have a lot of ground to cover when starting a new business. To help, you can enroll in the Kauffman Foundation’s free FastTrac program at www.fasttrac.org.