Starting a freelance business became very popular during the pandemic, contributing more than $1.3 trillion to the U.S. economy. Freelancers set their schedules and handle multiple assignments at once. One of the most significant benefits of freelancers is working for themselves.
Setting up a freelance business means understanding legal requirements, organizing taxes, and setting pricing. Several questions arise, including, as a freelancer, do I need a business license? Once the proper steps are in place, freelancing can begin!
Check out this guide on how to legally start a freelance business in five steps.
1. Legal Requirements
How to legally start a freelance business begins with choosing your status as a business owner. Sole proprietorships and limited liability corporations (or LLCs) are two choices.
A popular question that arises is, as a freelancer, do I need a business license? When using your name, you won’t need one, but asking a lawyer or accountant ‘do freelancers need a business license’ is always a good question.
Many freelancers choose LLC certificates when considering how to legally start a freelance business.
2. Taxes
When considering freelancing vs starting a business, you must consider how you’ll pay taxes. Setting up quarterly taxes assures paying the necessary taxes four times each year.
Moreover, the government requires self-employment tax when you file taxes. Freelancing vs starting a business also means setting up a separate checking account to organize your finances.
3. Prices
Set up a pricing system so clients will know what they can expect to pay for your services. Charging by the hour, project, or retainer are all things to consider. Be upfront about pricing and be competitive in the marketplace.
When starting a freelance business, talk with your clients about how often they will pay you. Sometimes, it’s best to have a contract.
4. Website
An online presence is essential when setting up a freelance business. A website showcases your portfolio and your contact information. Many freelancers also choose to link social media profiles to their websites.
Websites are also great places for client testimonials. You can also ask repeat clients to post a short video or written explanation of why they use your services.
5. Finding Work
Job boards, networking events, and professional associations are all places to find work as a freelancer. It’s also not uncommon to get a lot of business through word of mouth and recommendations.
Always carry a business card with you! Once connecting to a possible client, give them a prepared list of why you are the best fit.
Starting a Freelance Business in Five Steps
Starting a freelance business in five steps begins with legal issues and taxes. Setting up pricing and a website are also essential steps. Once the infrastructure is in place, you can look for work!
If you are looking for more information on working as a freelancer, keep reading our website. We can answer any questions, including, ‘do freelancers need a business license?’ Get your freelance career off the ground and running to enjoy the benefits today!
