Freelancing: The complete guide for running a successful home based business

Whenever we talk about freelancing/working from home, we have 2 sides of the ‘story’: people who are currently doing it (successfully or not) and those who’d try to do it, but they’re still afraid of all the challenges. There are countless ‘myths’ when it comes to working from home and a lot of truths, but at the end of the day no one can provide a clear recipe on how to do it successfully, since it depends on so many things …

I have started my own web design business somewhere in 2007 (when I also registered as a business in my country), but took it more seriously in 2009. It’s been 4 years already and for me the entire experience has been wonderful. I love working from home, I enjoy scheduling my work and earning my own money, my family life has improved tremendously. I’m one of those who have been successful when it comes to freelancing and won’t consider getting a ‘normal job’ ever again.

Here are the things I learned to do and apply to get me to this situation. Get ready for a HUGE article, but I do hope it will answer most of your questions and worries. Please feel free to contribute your own conclusions and advice:

Find out what YOU can really do / like doing

Even if you’re starting from zero, there’s a lot of things you can do as a freelancer. You don’t have to be a web designer (if you don’t like it, have no skills/talent). You can write articles, do virtual assisting, create excellent PR campaigns for your client etc. Ah, you’re not that passionate about working online? If you’re a good baker, you know what to do. Maybe you are skilled as a carpenter or could really create a good baby-sitting business. FIND YOUR CALLING (everyone has a talent – usually more) and prepare to turn it into a lucrative business.

Never stop learning – keep up with the trends

I am personally pretty ‘iffed’ with all the new stuff appearing in the web design world. My start in this was about 11-12 years, so I really went through a lot of new trends/technologies. Back then a layout would be created based on tables. Afterward we started working with divs. A, wait, now we need cleaner code, we’re working on responsive layouts etc. Always keep up with your industry, no matter how annoying it is to re-learn stuff every few years. This will allow you to provide your clients with THE BEST service and can make the difference between barely making it and thriving as a small business owner.

Create a portfolio / business site

It’s 2013 now, let’s get it straight: you need an online presence. So, even if you run a carpet cleaning business, do yourself a favor and have a small site built. If you’re on the online services side, have your own portfolio. For years I just didn’t bother with a portfolio and would use my work on various sites to showcase my skills. BAD CALL. Now I have my own web design site up and running and can slowly promote what I do, the designs I have created etc. It’s easier to tell you to visit bydojo.com than to link you to all kinds of freelancing sites I work with.

Promote and network

Some of you might be introverts, so it’s quite difficult to get ‘out there’ and meet like-minded people. Do yourself a favor and make an effort. If there are any industry meetings/conventions, go there. Sure, you could spare the money and maybe you don’t care for all the people there. But these people might be interested in your service and you never know what can happen next. Be present in the social media, be present on niche blogs and forums. Do not spam, do not annoy people, just be there, post useful and helpful content and you’ll have only benefits from this.

Read everything you can about running a business / cash-flow / money management etc.

I tried to study Economics on my first year at the Uni and gave up after one year. I HATE IT and everything dealing with money, economics and all this stuff. And yet, after deciding to create my small business, guess who’s reading all kinds of books related to freelancing, personal finance and everything in between? My year at the Uni was horrible and the courses really boring. But now, as I NEED to perfect my business, I’m like a sponge. All the books I read about this helped me learn more and achieve success faster and easier.

Work on a schedule

Most people think that freelancers and other home based businessmen work mindlessly on any task that needed to be done 2 days ago. The ‘normal’ image of a freelancer is that of someone who’s looking like they’re gonna lose their minds, who are pumped up with caffeine and working 24 hours with no plan. If you’re that freelancer, you need to change your ways.

Learn to keep a schedule, WRITE DOWN ALL THE TASKS and client meetings (believe me your brain is not the wonderful ‘HDD” you think it is), know your deadlines. Sure, some of you might work nicely on a 9-5 schedule (no one said you can’t apply ‘corporate world’ tricks and ways into your working style) or have a more flexible schedule. No matter how flexible it is, HAVE that schedule. It will help you so much, when you have your day nicely planned and can achieve the tasks you have to achieve.

Set yourself a realistic hourly rate and stick to it

Many freelancers undercharge or overcharge. As you start out and don’t yet truly value your time, you’ll probably charge too little. I know many people who compare their current hourly rate with what they’d get as employees and try to get close to that. Don’t do it. You are now paying your taxes/benefits, you will not work 40 hours/week, not to mention you’re supposed to do better as a freelancer, not work for pennies. If limited earnings is what you’re looking after, get back to your past job.

Make sure you get to a middle-ground. Don’t go too much overboard (you probably need the work anyway), but don’t undercharge either. In time you’ll get a ‘sense’ of what to charge and can slowly increase your rates, as your experience level/portfolio grows.

Once you have your rate, stick to it. Sure, everybody wants to work with you, but some might not ‘afford’ it. If you can use the money, you can take work on a smaller fee. If not, look for the clients who can afford your service. You’d be shocked to see that many can actually pay your rates. Why bother with someone who’s trying to squeeze the last cent from you, when there are countless clients who understand your value and want to pay for it?

SAVE MONEY

OK, this is all caps. One of the things most freelancers (aspiring or experienced) fear is the so called ‘feast & famine cycle’. What does this mean? It means that you don’t have a salary anymore, so there are months when you literally make nothing (or close to) and months when you earn 4-5 more times than in a ‘regular’ month. The best way to not starve during the ‘bad’ months is to save the excess money.

A good freelancer/small business owner should know how to VALUE money. I was very irresponsible with money before starting my business, because I knew that, no matter what stupid things I did, on the 4th of the next month I’d get my pay. Well, as a freelancer, this has changed. Now, if I squander money I squander MY money. I know how much work and effort I put into each cent, so I’m not that willing to part ways with it this easily.

By saving money I don’t have to worry about a bad month. And let’s say that my freelancing / advertising income is supporting my business, my husband’s side of the business (as he’s slowly growing it to be ‘self-sustainable’) and a good chunk of our family expenses, savings, money for our upcoming baby etc. There’s a lot riding on my shoulders, but knowing to budget/save covers us all for the bad months.

Understand the ups and downs of the business

In my case the first 3-4 months were HORRIBLE. I had another ‘dry-spell’ somewhere in 2010 (spring). Had some amazing months too and many ‘normal’ ones with almost a steady income. As a small business owner you need to understand that no months are alike. You can make it big this one and then ‘starve’ for the next 2. It’s absolutely normal in a business, so it shouldn’t bother you that much. By using your spare time wisely and SAVING money, you can go through the more difficult months and not suffer too much.

Use the time ‘off’ clients to develop your portfolio / business

You’ll be swamped with client work. Then you’ll have no projects for weeks, maybe, or just days. Use that time to spruce up your portfolio, to promote more (you should promote all the time, even when the business is great), learn new skills, re-think your strategies etc. Don’t just sit on the couch and watch TV. Keep your working schedule up and running, even if it means focusing on your business and education.

Do your best to provide a good service

You won’t be pleasing your clients all the time. No matter what you do, someone will be displeased with you and your service. I have clients who are absolutely in love with my work (and have recommended my services as much as they could) and I also had few contracts that didn’t end to my client’s liking. It’s normal, you will make mistakes or will be misunderstood by the client. No matter what, do your best to provide your client with a good service. As long as your heart is in the right place 99.9% of the people who’ll work with you, won’t ever regret the decision.

Join the payment processors your clients use

I live in Romania, so PayPal was pretty ‘weird’ for us years ago. We weren’t accepted at first, then we could make payments only, then we were accepted properly. As soon as it was available in my country, I joined it. Same with banks. If most of your clients want to pay with checks, then make sure they can pay you. If they all use PayPal, create the account. Sure, you might not want to join a god forsaken processor no one uses just for a client, but even in that case if you can do it, think about it.

ASK for your money – invoice clients and make sure they pay

Don’t be ashamed to ask for what’s yours. You have delivered the work, you need to get paid. Many clients just forget (they’re busy people after all) so a gentle reminder will get you paid. Very few want to scam you, but, even in this case, make sure you insist on getting paid. A great idea to avoid all this circus is to either have them escrow the money for the project (so that you can take it after it’s done, eve if the client ‘vanishes’) or get paid in stages (and each payment should cover future work: 30% upfront, 30% BEFORE the next step, 40% before you submit the files/install the site etc.)

Sign contracts

I was always pretty lenient with this and got burnt couple of times. Have a clear contract (get someone who knows how to draft it help you create a good one) and have the client sign it. If anything goes wrong, they’re less likely to do ‘nasty’ things, since they know they signed a contract and it might turn out ugly. Yep, it’s more paperwork, but it can help you down the line.

Don’t work for free

If you don’t have a current portfolio, do ‘dummy’ work. Create a design template for a fictional company, write an article for an imaginary client etc. I never worked for free and it didn’t happen because I set my mind to it. Few years ago there was some work I could do for a charity. They wanted my design services for free, which I almost accepted, until I found out that the ones who ran the charity made sure they keep some of the donated money to cover their time/effort. Aha, so you make sure you don’t work for free in your OWN charity, but I’m supposed to. I might help few friends with small tweaks/advice, but we’re talking people I care about, not just someone who wants me to do a job for free.

Set time for work and let your family know about it

When I first started working from home, my folks were crazy happy: ‘ah, so you can do this and that around the house‘. Took few days to ‘train’ them to understand that I WORK and not play at the computer. Now they understand I also have a schedule and all the chores have been set so that my working hours are not affected.

Create your own working space

The ‘work from bed’ image is in many cases just an image. Most of us can’t work from our beds (and won’t). We have an office space set in the house and work like ‘normal’ people from a desk, not god knows what kinds of settings. Having your own ‘space’ helps you focus better and enter the ‘work mood’. Keep it clean and well organized and make sure you are working in a properly ventilated room, too.

Think about your business, study how others do it

Running you own small business or freelancing career doesn’t mean you’re separated from the entire world. Sure, you’re probably working on your own, but there’s a lot of things you can learn from other successful businessmen. See what works for them, understand where they make mistakes. Use some of your spare time to plan your business, think ahead and find new ways to monetize.

Track your income – see what works and what doesn’t

You’re probably not providing one product/service only, so you’ll notice your clients are not always interested in all your can provide. I for instance provide web design services, content creation, hosting etc. In time, keeping track of my income, I was able to see what works better, what sells more, tweak my pricing, provide more related services etc.

Keep up with the paperwork

In some countries (mine included), you cannot run a business unless you employ the services of an accountant. So for me it’s pretty easy, she’s handling the messy paperwork. Sure, I do keep up with it, make sure it’s all in order, so that we don’t have any issues. Freelancing is not all glamour and this is clearly a thing I personally despise. The fact I hate keeping my bills and invoices organized, doesn’t mean I don’t do it.

Schedule time for fun and entertainment

I know you are running a business and time off work means time off earning money. This doesn’t mean you should turn into a robot though. Make sure you have time to relax, spend some hours with your family, exercise and enjoy life. Freelancing is a great system to also make sure you get to enjoy the life you’re building with your own ‘hands’.

Create your own ‘work system’

The web is full of recipes: do this, create this, work like that. Take everything you read/learn and devise your own system. Maybe you work better in the mornings (early mornings). Maybe you are not distracted by music and are more productive when it rains. I don’t know, you surely have your own particular way to deal with your work and deadlines. Find out what makes you tick, see when you’re the most productive, when you get the best results. Study your progress and slowly create your own system. You don’t have to be a ‘monkey’ who does exactly what others tell you to do, you get a lot of possible ways and solutions just so that you can then ‘mold’ your own ways to get things done.

Don’t overwork yourself

I know it’s easier said than done and most of us have been through the stage when we worked like crazy. In my first 3-4 months of freelancing I’d work for 14 hours. I’d sleep for 8 and the rest would be to walk my dogs and maybe see my boyfriend (now husband). I was tired and realized it won’t be possible to keep it like this, but it worked for the little time I needed to push my business forward. If you’re ‘killing’ yourself with work, make sure it’s not for a long time, since otherwise you’ll really mess up your health. As soon as you see the ‘ball rolling’ start creating a better schedule and rest as much as needed.

Think about some passive income streams

When providing services as freelancers, if we don’t work, we don’t earn. So you should think about ways to make money ‘when you sleep’. Premium themes or scripts, a web site that earns you ad revenue, e-books etc. There are many things you can create so that you won’t only be trading your time for money.

Always be nice and respectful to your clients, even if they don’t deserve it

Do you have an abusive client who’s treating you like garbage? Be respectful, even if he probably deserves a beating more than a polite word. Under no circumstance should you lose your ‘cool’ and start being disrespectful. You can always fire a bad client, but never get down to their level, you never known when your bad attitude (even if the client deserved it) will come back to bite you. Do NOT talk bad about your clients. You never know how this goes out and it can again affect your image.

Establish yourself as an authority

Create articles in your niche, help out clients, even if they’re just prospective and can use some good advice. I got quite some work all these years from people who knew I’m ‘good with blogs’ or forums. Many would ask me just some random questions and then after a while, when they needed some specialized help, guess who got the contract? Keep a blog, be open with a good advice, you can then really build a business nicely just because people know you’re the ‘go to guy’ when it comes to your specialty.

Keep your expenses as small as possible

You don’t need a fancy office or 20 employees (at least not right away). I know people in the same business as myself whose overhead is so big, they’re left with little money every month, while I keep more ‘dough’, even after paying for the business expenses, taxes etc. Sure some laugh when hear that I work from home, but I just think about the rent I don’t pay for my office in town (even if our work can be done from the kitchen table) and all the other expenses and laugh last.

Don’t be ashamed to work from home

Just as mentioned before, there will be people who’ll give you a hard time for being the ‘pajama guy’ (as if we actually worked in our pajamas), while they have employees and a nice office. When it comes to personal finance (yes, even your business), what matters most is what works for you and your family. I’d rather pocket the money I don’t pay for all kinds of ‘frills’ than just brag with my cool office I never needed anyway. So mind your own business and finances, it’s not important where you work (unless this is a vital aspect in your business and for your clients), what matters is to do a good job and have happy clients.

Rest properly during the night

You’re not a frat boy/girl anymore. No more sleepless nights and messing up your schedule. In most cases we do get more things done during the day, so use the night to sleep. I get at least 8 hours of sleep/night and it might seem huge for some of you, but it helps me keep my ‘engines’ running. I had few sleepless nights in college (weird enough, not for partying, but for studying) and it made me realize that my performances were pretty bad the next day and it would take 2-3 days to really get back on track. That’s when I decided that sleep is important for me and I go to bed at 11-12 (the latest).

Break down big projects in smaller manageable chunks

Part of knowing how to plan/schedule is to also break down the bigger projects in various work stages. This helps you get more of the tasks done and the client is also better informed and can understand how it’s all organized. Based on these smaller stages you can now tackle the mammoth project/service and never feel overwhelmed.

Keep away distractions

It’s not easy to focus, especially when you don’t have someone to yell at you to do your job and stop procrastinating. Make it a habit to work, when you’re supposed to, keeping your social media accounts closed, email notifications disabled etc. Believe me the world will still turn if you don’t respond to an email in under 30 seconds since receiving it. If you’ll try to be more productive even in shorter bursts, you’ll realize that you get more work done in 3 hours than you’d normally do in 10. There’s no use to drag your feet for an entire day (you’re not at the office anymore to ‘pretend’ you work for 9 hours to get a paycheck), your main focus is to get the work done and enjoy life.

Don’t leave most of the work on the last minute

We have a saying in Romanian and I’ll try to loosely translate it: you cannot fatten the big on the Christmas Eve. While sometimes working like crazy 2 hours before the deadline can be productive and the work not sub-standard, most of the time you have a deadline to know how to PLAN your time until it. So don’t leave all the work on the last minute. You’ll stress out and do a poor job (unless you don’t have something happen – sickness or unexpected life events – and make a fool out of yourself in front of the client by not finishing the job).

Know how to ‘disconnect’ from your business/work

I don’t have a smartphone that’s connected to the internet, just because, when I’m offline, I plan to be offline. After I finish my work in a day, I’ll jump in my car or take a walk to a destination (shopping, seeing my family, a nice relaxing walk with my husband etc.). I don’t check my emails, I don’t obsess about my work. Those are the moments when I’m not Dojo anymore, but Ramona, a wife, mother to be, friend, daughter, grandchild etc.

Learn how to delegate

Little by little you’ll realize you can’t do everything on your own, so it’s important to know how to work with others. While I’m not a team player myself, I do like to sometimes delegate tasks that would allow me to better focus on my main job. It takes a while to get used to working with others, but it’s surely paying off.

Know when to say ‘no’ to your clients or fire them

Most of your clients will be a pleasure to work with: people who are clear and concise when it comes to letting you know what they need, they’ll pay in time and be respectful. Every once in a while you’ll meet someone who doesn’t seem ‘right’ (your instincts are a great asset, don’t ignore them) or who’ll start acting abusive. Don’t worry about refusing work with someone you don’t really have a good feeling about or firing a client who no longer treats you  with respect.

Don’t do anything illegal

Years ago I was offered a pretty huge ‘deal’ if I created the design for a video-chat site in my country. The issue is that most of these are actually illegal here, not to mention I was 100% sure they’d also employ underage girls (most such ‘businesses’ do). Even if I would have received 5 times my regular fee, I decided to decline the offer. I don’t personally have any issues with any niche, as long as it’s something legal. It can be a ‘naked’ site, it can be anything, as long as it doesn’t break the laws.

So there are the main things I have tried to do in my business to make it this far. Please feel free to add to the list. 🙂