Freelancing: Baby Steps to Business Ownership

Tuesday, September 30, 2014

Starting and running your own small business can be a daunting proposition. Many people are accustomed to the security a regular job and recurring paycheck can offer. But, more people than ever are choosing to work for themselves, either part-time or full-time.

In 2013, the Freelancers Union, an advocacy group and networking community for freelancers, estimated that 42 million Americans were working as freelancers or independent contractors. That number is up significantly from the US Department of Labor's 2005 count of 10.3 million freelancers. 

Because you can set your own hours and take on only projects you choose, freelancing is a good way to test the waters before you jump into owning your own business. In addition, freelancing will help you exercise many of the skills independent business owners acquire. By starting out as a freelancer, you spread out the costs of starting your own business, build valuable contacts, and gain experience. And because you can often do it while maintaining a full-time job, you mitigate the risks, should you find it's not for you.

Career Foundry, an online resource for freelancers, offers the following tips for those who might want to try out freelancing as a bridge to entrepreneurship: 

Start before you quit your day job: This will give you a chance to build capital in case you do want to pursue business ownership. Charities, schools, and locally owned small businesses have smaller budgets, but are more willing to take a chance on a new freelancer. This will also help you build referrals. Just make sure you're following the rules regarding outside employment where you work.

Boost your brand: Remember, as a freelancer, you are your brand. Make sure your social media profiles are up-to-date, especially LinkedIn. You're going to be selling yourself, so make sure you're represented well online.

Set aside time to improve your skills: If you're not actively engaged in a project for a client, make good use of the time by sharpening your skills. Be sure you're reading trade journals and web sites to stay abreast of the latest developments in your field. Traditional classwork, as well as online classes and tutorials, are also a good way to make sure you're keeping ahead of the game. 

Research what to charge: First, figure out what your time is worth. If you were to do the job full-time, would you be able to cover your expenses and still make a decent wage? Also, check what others charge for similar services. Benchmark your rate against the industry rate. You may have to operate slightly below market prices in order to get your first job so don't lock yourself into a long-term rate until you have some experience.

If you take on a few freelance jobs and discover that you're enjoying it, that's a good sign that striking out on your own might be right for you. At that point, manage your network, set aside some capital, and start working on your business plan. The experience you have built through freelancing will help you get a jump-start on your business venture.


photo credit: markus spiske via photopin cc

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