How To Start An Online Freelancing Business – Pros & Cons

How To Start An Online Freelancing Business - Pros and Cons
February 18, 2021

Thinking about getting started in freelancing but wanted to know more about it before you start?

Whether you want to start freelancing as a writer, web designer, or developer, or any other area, here below useful information to help you make your decision. 

A freelancer works independently, selling work or services, usually without the intention of entering into a permanent or long-term agreement with a single employer. They usually work from home and use their own tools and are responsible for their maintenance.

But before you start your own freelance business, you should be aware of the pros and cons of your decision.

After all, this type of decision has the potential to be life-changing, both ways: positive or negative.

 

In this post, we’re going to examine some of the major advantages and disadvantages of becoming a freelancer. 

Don’t wait until everything is just right. It will never be perfect. There will always be challenges, obstacles and less than perfect conditions. So what. Get started now. With each step you take, you will grow stronger and stronger, more and more skilled, more and more self-confident and more and more successful.
Mark Victor Hansen

How to start a freelancing business

1. Choose a niche that’s in demand

Make sure to find a job that you enjoy and that your good at.  In addition, take time to do your research to make sure your skill is marketable.

I’ve written a post that can help you check whether your idea is in demand on the market:  Is Your Online Business Niche Trending?

By taking the time to find a profitable niche for your freelance business, you’re actively seeking out an industry and type of client that values quality. 

Pleasure in the job puts perfection in the work

2.  Configure your brand

You’ll need to build your brand under which you’ll sell your services. That is a name, design, or other written or visual attribute that will clearly identify your company if you set up any, the services you are offering and all personal criteria you want to be known with.

You’ll find more information in the section “Define the brand identity of your online business” of my guide on “How to start an online business from home”

Being easily identifiable is an essential part of your branding strategy. This applies whether you’re using a brand name or your own. The most important thing here is to define your persona and use it consistently on all your channels .”

3. Identify your target clients

Here is a systematic approach to identifying the best clients for your freelancing business.

Ask yourself these three questions:

  • Which companies will find my services useful?
  • Which companies can afford to pay the prices I will need to charge?
  • Who are the decision-makers within these businesses, and what can I learn about their demographics & interests? Can I find a way to connect with them on a personal level?

When you have all of this information, you’ll be in a good position to create a typical email that goes straight to the heart of what these customers want from you. The intention is obviously to connect with them and deliver immediate value.

Start working with those who are willing to offer you a contract. With time, you’ll develop a clear sense of which types of clients to continue with. Slowly but surely, your list of best clients will start growing as your business expands.

3. Set your pricing system

Will you be charging hourly? Will you charge a flat fee per month? Will you use project quotes? It’s important to settle on how you’ll be making money before you start actually making it.

Once you’re ready with your pricing structure, start figuring how much your services are going to cost. You can start by researching industry averages. You should be able to find some solid figures online. Sites like Payscale and Glassdoor are good places to start.

Average Freelance Earnings per Hour by Industry

Average Freelance Earnings per Hour by Industry

When you’re in a space that competes on quality, you’ll completely change how you sell your services. You’ll be competing on value, not price.

Companies should not compete on prices but on quality, services, innovation and above all have happy customers.
Irfan Mamoun MD

Finally, sign up for online payment processing to accept credit cards and online payments. It’s not a bad idea to have accounts with multiple online payment processors. Do your research and be aware of the service charges.

 

CLICK TO VISIT

PayPal
Google Pay
Square
Stripe

4. Build a portfolio website

Employers are primarily concerned with your previous experience and skills. If you are experienced, describe your past jobs that will show the best you can do. Also, when accepting new jobs, choose the ones that will help build or strengthen the best reputation. Don’t even hesitate to work for free when you’re starting your freelancing business and need to build your portfolio.

As today an online presence to support your new freelance business is vital, I strongly advise building a website where you’ll share your experience with your clients. If this can help you, here is my guide about Starting a blog (and turning it into a successful business).

How to start a blogging business

To be truly effective at selling your services, your freelance portfolio website needs to do the following:

  • Show your personality, your brand and your contact information
  • Communicate your area of expertise
  • Display your experience, your relevant skills, education
  • Display testimonials.
  • Have regular updates about your evolution, new clients and new accomplishments.

5. Pitch correctly

As a freelancer, you need to know how to pitch yourself. Pitching correctly is an asset that’ll be worth it in your years to come. No matter how skilled you are, if you want to turn your skills into a freelance business, you need to communicate those strengths and convert your conversations into paying clients.

Similar to job applications, employers like proposals tailored to their job. Focus on how your skills might meet their needs, your financial requirements are within their budget, and you’re much more likely to impress.

A few tips on marketing yourself:
1. Know your audience
2. Identify what makes you sellable
3. Be yourself
4. Remember you’re marketing your value,  not just yourself
5. Be genuine and passionate

Advantages of an online freelancing business:

1. You’re your own boss

You no longer have to answer to anyone other than yourself and your customers. No one weighs on you or micromanages you.

You are free to do what you want when you want. Making all the tough decisions has become your responsibility; you have all the control.

2. Time freedom

One of the main advantages of becoming self-employed is that you can work whenever you want. You can choose your own hours.

If you want to sleep until noon, you can do that. If you want to take the weekend to be able to explore the city, go there. As a freelancer, you can actually work your most productive hours, and those hours don’t have to fall during regular office hours.

3. Location freedom

Whether you prefer consistency or getting things done in your work environment, you can choose to work wherever you want, whether you choose to work at a local cafe or while on vacation halfway around the world.

You are no longer stuck in an office or even in your home. Find a place where you work best. You can work in a park, at the library, or in your living room while wearing your pyjamas.

4. Choose your clients

When you work for someone else, you can’t choose who you work with. You may end up with unprofessional or rude clients. But, when you are a freelancer, you can choose who you work with. If you don’t fit a customer’s personality or business or payment philosophies, you can pass on the opportunity and wish them the best. It’s that simple.

Make your clients so happy & successful that they become your sales force.
Paul Jarvis

5. Earn more

You no longer have to work for a package, no matter how large the projects you complete. Now you can allocate or keep all the profits from your large and small projects and clients.

This gives you the freedom to use that money to improve yourself and grow your business.

6. Fewer meetings and bureaucracy

As a freelancer, meetings will be a thing of the past – along with all the different silly small business rituals and corporate bureaucracy to do the simplest thing.

If you want to do something, you can just do it. No longer will you need to justify it with a 50-page PowerPoint presentation, trying to convince bored colleagues and executives.

Drawbacks of an online freelancing business:

1. You wear all the hats (project manager, bookkeeper, etc.)

You are now in charge of finding all your own clients and projects.

When you worked a traditional job, your projects were probably handed to you. But now, you’re the sole person responsible, so that means a lot of legwork on your part.

And that means you have to wear many hats, including marketing, advertising, and sales.

2. Always chasing clients’ payments

Being a freelancer also means that you run the risk of not getting paid. This is fairly common in the freelance world, and one more hat you’ll have to wear is that of a debt collector.

There are ways to protect yourself from non-paying clients, but sometimes you won’t realize you’re at risk until it’s too late.

3. You often work longer hours

Being your own boss and working from your home also means that it can be difficult to distinguish between your work time and personal life.

This means that you can work long hours  (60 to 80 hours a week) and never make time for your personal interests.

There are ways to set work hours as a freelancer:

a. Set boundaries yo your working hours

Set actual work hours and stick to them. It helps customers to know in advance when they can reach you and when they can’t. I personally use Calendly to display my working hours and allow my clients and partners to schedule appointments with me. I do my best to fix my availabilities several months in advance so that some of them can easily schedule recurrent meetings.

b. Set fees for additional or out-of-working-hours work

Make sure that any additional work outside the original scope of your agreement comes with additional charges. The same applies to work requested outside of your working hours. Additional work added to a pre-agreement can really steal your time, and place your business in jeopardy. The only way to avoid the “additional work outside of the original agreement” is to have the client and customer work defined in writing.

c. Specify and stick to the number of revisions

Good practice to protect yourself and your time is to have an exact number of revisions clearly defined in the original agreement.

Some clients may be attempted to ask for endless revisions to your work. If you don’t have a set number of edits you’re willing to do, you’ll end up spending more time on the project than it’s worth. Have a specific amount of revisions that you’ll do, and charge for extra revisions beyond the agreed limit. 

d. Specify your preferred means of communication.

Today there are almost endless ways for people to get in touch with you. They can send you messages on Instagram, Facebook, Twitter, and Snapchat, Whatsapp and so on. Some people send e-mails, texts or call. 

For your clients, be clear about how they can reach you. Thay way you save time by checking all of these different communication channels.

4. Not steady or reliable workloads

Unfortunately, being a freelancer means that your income and your workload are unstable and inconsistent.

For the most part, you won’t be able to depend on any regular project, client, or profit, whereas you would know the exact pay you’ll receive at a traditional job.

5. No employer benefits

Health benefits are expensive. Depending on your current health, switching to a freelance lifestyle might not be in your best interest.

Also, starting your own freelance business means you no longer have paid sick days or vacation time to use. Every day you don’t work is a day you won’t get paid.

6. Less certainty

When every decision directly affects you and your independent business personally, without a large corporation’s cushion to help contain any negative impact, it can get very stressful, very quickly.

Do you think your boss’s requests to “prepare this business plan tomorrow morning” were stressful? It’s nothing if you compare it to the butterflies in your stomach when preparing your own business plans and project proposals to convince big clients to approve the order.

What about planning for the future? Without a CEO and senior management to do it for you, it is now your responsibility too.

Freelancing business FAQ

1. What jobs can I do freelance?

There is no limit to freelance activities. However, freelancing is more common in some industries. These include:

  • Data entry
  • Fashion
  • Financial support (e.g. bookkeeping)
  • Graphic design
  • Marketing, Media & PR
  • Photography
  • Programming
  • Videography
  • Writing, editing & proofreading

Here is a list of over 100 freelance ideas.

2. How much do freelancers earn?

Freelancers are typically paid hourly, or at a fixed rate (per month or per project).

Freelancers rates depend on various criteria, mainly

  • the type of service,
  • the value of the product,
  • the level of qualification, experience,
  • duration of the project

3. How can I find freelance job?

Even though freelance work can be found on a range of job sites, there are also a number of websites dedicated to freelancers.

You can start by visiting these sites: Freesy, Upwork, Freelancer, and Peopleperhour.

The takeaway

Freelancing is equally positive and negative. Freelancing means professional freedom, but also instability and risk of failure. 

This fact makes the decision of following a freelancing career or not more a matter of personal preference than anything else. Some people are simply happier doing their own thing. Others prefer the safety net and perks of a corporate job.

But if you risk your stability for something more aligned with your professional goals than a traditional job, you have the opportunity to build your name and reputation and get to make your own mark in this world on your own terms.

And that is what being a freelancer is all about.

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