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The Nuts and Bolts of Launching a Career in Freelancing or Consulting

“I’m going to work for myself.” For many people, the dream of independence can be turned into a reality. Freelancing and/or consulting is the most straightforward path toward working for a great boss — you. Because it is a tremendous commitment, however, it’s important to think logically and take steps toward this career move seriously.The most important thing to consider is the purpose of freelancing/consulting. Are you looking to fill some free time? Do you want to earn extra money? Are you looking to work for yourself? Want to test the waters in a new career? These are all questions central to the issue of income expectation. Decide whether you will freelance/consult on the side, as a part-time position, or as a full-time move. It’s wise not to quit your full-time position until you’ve been consulting on the side for a few years and have a good sense of the flow of your intended business.Another thing to consider is pricing. If you browse around the freelance boards you can see that there is stiff competition for US freelancers from offshore providers. Obviously, they can offer much lower prices than US providers. There are some things you can do to give you a competitive edge and compete at higher prices.

Collaborate.

Know your clients strategic plan. Your clients and prospects most likely have a business plan. Talk to them and try to find out their goals and objectives. It’s a lot easier to support their goals if you know what they are. Once you know what their objectives and goals are, craft your proposal to address their goals, including how your services or company supports their goals and objectives.

Sell Yourself.

If you use the freelance boards listed below, you will need to write a proposal to bid on projects. Writing effective proposals is critical to winning bids and commanding a better price for your services. Customers cannot know the value you provide unless you tell them. Track your experience, knowledge and skills and keep it current so that you can quickly and easily use it to tell your clients and prospects what you bring to the table.

Show your results. Don’t just tell prospective clients what you can do for them … show them results. Keep a log of the benefits of your services for past clients. Writing a good proposal to win a project on a freelance board is similar to writing a good resume. Rather than just a list of skills, a list of results and benefits is far more effective.

Self Promotion. If you don’t sell yourself, who will? Don’t feel like your bragging when you sell yourself. Be certain (without making their eyes glaze over) that prospective clients understand what you do.

It’s about your skills.

Be an expert in your area of expertise. Take classes, attend seminars and conferences, keep your skills current and learn new skills. The more you have to offer, the better your chances of winning are. In addition, while you may be submitting a proposal for one particular project, companies have ongoing needs and if you can provide additional services you will keep your clients for a longer period of time.

You don’t really want to quit your “real” job unless you:

1. Have enough money set aside to support yourself (and others, if applicable) for a year, plus costs for starting up your business, such as a tax advisor, lawyer, copy machine, and office supplies.
2. Are independently wealthy and/or have a spouse who can provide all of the above

If you don’t plan to quit your real job, you have more options for success benchmarks. When you have a steady source of income outside of your consulting/freelancing work, your timeline for finding clients can be longer, you can be choosy about clients and projects, and your financial needs are covered during the start-up periods and inevitable dry spots all new businesses face.

Things to Consider First

1. Think about the market and think out of the box. Sure, you are a great Web-page designer. Unfortunately, since the great dot-com bubble burst, there are literally thousands of Web-page designers out there. Instead of designing Web pages, why not teach high school students about design? Assessing the market is extremely important. If your intended market is saturated with competition, it’s important to be realistic about your ability to find and sustain a client base.
2. Think about non-compete agreements. Many companies ask you to sign an agreement saying, in many cases, that you will not compete with the primary business of your employer. For a recruiter hoping to go freelance, for example, a non-compete agreement may mean that you signed away your rights to recruit in a particular city, with anyone currently on your employer’s client list, or anyone within a certain physical distance to your employer. For other employees, such as a hair-stylist, a non-compete agreement may mean that you cannot take your clients with you when you leave. Carefully check your employment records as part of your pre-change strategy.
3. Check into no-moonlighting agreements. Although less common than non-compete agreements, some businesses ask you to agree not to work on your own after traditional work hours. Again, be sure to check if your employer has this policy. Some states allow businesses to prohibit moonlighting. Check with your state’s Division of Labor if you have questions.
4. Carefully study tax and record keeping implications. Before you hang out your shingle, it’s important to understand the tax ramifications of self-employment. As a self-employed taxpayer, you may have to file paperwork completely unfamiliar to you. For independent contractors, the equivalent of the W2 form issued to employees is a 1099, generally issued for fees paid to you in excess of $600. See irs.gov for information about tax filing status and record keeping.
5. Call in the experts. IRS.gov has an on-line site for small businesses and self-employers. Most mid-to-large size cities have small-business associations and even start-up loans, grants and classes for new businesses. It may also be a worthwhile investment to speak to a tax advisor or financial planner. Finally, think carefully about your legal needs. Will you need a contract for each client? If so, a lawyer may be able to draft you a template to use with each new client. It’s important to consider issues such as liability, cancellation policies, arbitration agreements, and payment terms.
6. Do you need insurance? What costs are associated with insurance to cover you and your assets? Insurance needs vary depending upon the kind of business or activity you are conducting. It’s important to carefully research this topic. Most folks starting on their own as freelancers rarely think about negative scenarios. Are you looking to become a masseuse? What if your client falls off the table or has an allergic reaction to the lotion you use?
7. Consider the licensure requirements. Thinking about starting a resume-writing service? Are most resume-writers in your area certified? Should you be in order to be competitive? What are the costs associated with certification?

Finding Clients and Customers

Elance - The largest online freelance site. Probably the best site if you want a large professional job. However if you are looking at a smaller job or you want to cut costs to the bone you may be better off with Rentacoder or Scriptlance. Elance charges the freelance providers to just be listed on the site, whereas Rentacoder and Scriptlance only charge the providers once a project has been selected.

Rentacoder - Probably the second largest coding freelance site. Worth checking out. When you get a project done through Rentacoder you put the entire project fees into an escrow account. You don’t release the fees until the project is complete. This is good because it gives reassurance to the coder that they are going to pay you, but it also can be difficult if you have a large project, because you have to pay the entire amount into an escrow account, although you can put the project into stages and pay based on each stage.

Scriptlance - This site has the lowest costs but it doesn’t have some of the features of Elance and Rentacoder. Not as professional but good if you want really cheap coding.

Getafreelancer.com - Another reasonably good freelancing site

Guru - quite a large outsourcing site

Contracted Work - a reasonably sized contracting site

Sologig - a reasonably sized contracting site

Freelance.com - Freelance IT jobs.

Freelancers.net - Freelancers.net is UK focused and lists many jobs and projects open to UK freelancers, however clients from across the globe use Freelancers.net regularly to source freelancers outside of the UK.

ProjectSpring.com - Freelancing site for computer programmers

Hotgigs

Freelance Jobsearch

AllFreelance.com

iFreelance.com

Project4Hire.com

Freelance Jobs

GetaFreelancer.com