Working from home is a common dream that is quickly becoming a common reality for many as freelancing and entrepreneurship take the employment world by storm. But while working from the comfort of your house can seem like the perfect set-up, it’s only a positive experience if done properly.
In this post we’ll cover the basics of setting yourself up as a work-from-home freelancer, including the financial, business, and administrative details that you need to consider so that you can be sure to start yourself off on the right entrepreneurial foot.
Step One: Business First
Can you legally work from home?
First things first—you need to figure out if you can legally do what you want to do from your home. If you are just going to work independently, meaning for yourself with no employees, you should be ok to set up shop in your spare room.
But if you plan to enter into a partnership or to incorporate your business, you will need to look into commercial zoning within your neighborhood to see if you can conduct business in your area and then create a solid and binding agreement.
Since starting out as a contractor is the easiest and most straightforward way to become an entrepreneur, many people prefer to start out as independent contractors and then to scale accordingly as the business grows beyond the confines of their home.
How do I plan to scale?
The next thing to think about from a business perspective is your scalability. Do you have enough clients to make this a full-time gig, or do you want to take it slow and start out part-time until you feel confident that you can make this work?
What is your initial budget like? Can you afford to get a website and business cards now, or can you do without until you have solidified your new position?
How you answer these questions depends on what you are offering, where you can find your target market, and whether you are creating a new business altogether or simply moving from part-time to full-time freelancing.
In any business, it is recommended that you scale slowly and with purpose, so keep that in mind as you make decisions that will affect the longevity and continuity of your enterprise.
Financial tips for freelancers
You’re going to be making a lot of choices, so it’s only natural to assume that you may forget a thing or two during the transition, so let us give you a hand by reminding you to:
- Set an appropriate portion of your income aside for taxes.
- Make a point of keeping any and all receipts related to your business.
- Find out what you can and can’t write off come tax season and keep your bills.
- Get up close and personal with your advertising and marketing budgets.
- Spend slowly and wisely by limiting your weekly business purchases to a certain amount. If it is over that amount, hold off until the next week so that you have time to mull it over.
Step Two: Technology
As a freelancer, you need to be versatile. Since you want to work from home, you have to make it easy for your clients to contact and communicate with you. That means staying on top of new technology and figuring out exactly what you need.
If your clients prefer to have video meetings, you’re going to need a decent webcam and a stable internet connection. It’s hard to get excited about your new marketing ideas when your face freezes up and your voice sounds like a YouTube remix.
Chances are you’ll need a healthy computer, a cell phone or office phone with long-distance, reliable internet, and any other hardware your profession requires.
Be Software Smart
When it comes to figuring out what software you really need in order to do your job, start with the basics. Most will need a word processor and email application at the very least, while others will need graphic design or video editing programs.
Don’t think about what you want. Instead, think about what you really need to satisfy your clients’ needs while keeping your spending within reason. Remember, scale as necessary. Maybe you don’t need that full design suite right now, but when you do, you can always get it then.
Tech Tips for Freelancers
- Stick with the gadgets, programs, and applications that you will use daily.
- If you need a specific program for one client, ask them to cover either a portion of or the total cost.
- Look for free applications and programs before purchasing a paid one.
- Get software that supports you. For example, if you are great at writing, but not the best at billing, get some accounting software to help you keep track of your cash flow.
Step Three: Office Administration
One of the best and worst parts of freelancing is that everything is your job. You are the secretary, accountant, marketing manager, and more. The more efficient you are at these different roles, the more likely it is for your business to run smoothly.
One of the frequent pitfalls of freelancers is keeping up on paperwork. From contracts and invoicing, to payment requests and taxes, your responsibilities on paper can become overwhelming, but can ultimately save you time and money in the future.
Try to pick a consistent billing date for all clients, such as the last business day of every month. Spend that day creating and sending your invoices. Decide when payments are due and make a note of that in the email or mailed copy of the invoice. A good timeframe for payments is two weeks after an invoice is sent.
It’s also beneficial to stay up-to-date on your contracts. Make sure to note when any are expiring and when to decide whether or not to renew. Keep signed copies of all of your contracts in a file with anything else relevant to that client, like their invoices, copies of their payments, etc.
Keep it organized by year and by client so that when it comes time to add up your numbers for taxes, you’ll be able to do so without too much trouble.
Set your hours
Run your office like any other office would run. Pick your hours and stick to them. When you turn off the light at 5pm (or whatever time you choose) let your work be finished for the night.
Don’t take calls or emails outside of your available times, and politely but clearly indicate to clients when you are and are not available to them.
To define your work time even more strictly, set aside space for an office. Whether it’s in the basement or the spare room, make sure that it’s an area that does not co-mingle with home/family time. It is still important to separate your work life from your regular life so that you don’t overwork yourself or stretch yourself thin.
Have a routine
When in an office, routine generally sets in at some point. You wake up, get ready, and once you get to the office you might spend an hour checking emails or checking in with your team, and then you move on to something else. Most of your days follow the same pattern, letting you experience structure and consistency.
Try to do the same thing at home. Wake up, take a shower, get dressed (try not to dress in pyjamas everyday), and create a schedule that you can follow. Perhaps you prefer to take care of social media posts in the morning, while working on coding in the afternoon or evening.
Focus your schedule on what makes your comfortable and suits your personal productivity. If you like to sleep in, allow yourself to start your workday a little later. This is the freedom that makes working from home so desirable.
The Freedom of Freelancing
Once you have all of the basics in place, you’re ready to get started. If you don’t feel fully comfortable, don’t worry—that will come with time. You will learn as you go. Just remember that freelancing is not a one-size fits all experience.
Take care of the basics, make smart decisions, and plan ahead to get the most out of your freelancing experience.
What other work-from-home tips do you have to add? Do you freelance, or have you in the past?