A Step-By-Step Guide For Starting Your Freelancing Business

Ok, you’ve decided that becoming an independent contractor is for you.

Not sure where to begin?  I’d love to help you out.  Here are the 4 steps you need to get started, shamelessly brought to you in gifs.

1. Setting the Legal Foundation

Many aspiring freelancers struggle to navigate the legal complexities of starting a business. Without a proper legal structure, you risk facing tax issues and personal liability.

Do not let this list overwhelm me you. It’s intentionally detailed, but not everything will pertain to you.

Choose Your Business Name

You should first choose a business name.  You have the option of using your own name or going with a business name.  I tend to like to make what should be easy decisions fairly difficult, so this was a difficult decision for me.  🙂   Read about the pros and cons of each one here.

Steps:

  1. Brainstorm potential business names that resonate with your brand and target audience.
  2. Research the availability of your chosen name to ensure it’s not already in use.
  3. Check domain availability to secure your online presence.
  4. Consider trademark registration to protect your brand identity.
  5. Finalize your business name and proceed with registration or incorporation.

Set up your legal structure

Becoming an event contractor doesn’t have to be complicated, but remember, it’s still a business.

The legal structure that you choose will determine how much you pay for taxes and your personal liability.

I started off as a sole proprietor and then became an LLC when my business took off.  Each has different tax implications, so make sure to see a tax advisor so they can let you know the best route to take in your own state.

The licenses and permits that you need will also vary depending on your location.  Most states require that you submit an application with your business name, as do local counties and cities.  If you’re using a name that isn’t yours as a business name, you’ll have to fill out a fictitious business name application, which is easy but does require that you submit the statement to run in a paper for 2 weeks.

  • Set up the Appropriate Legal Structure:
    1. Research different business structures (sole proprietorship, LLC, etc.) to determine the best fit for your business.
    2. Consult with a legal advisor or tax professional to understand the implications of each structure.
    3. Complete the necessary paperwork to register your business with the relevant authorities.
    4. Obtain an Employer Identification Number (EIN) from the IRS if required for your chosen structure.
    5. Fulfill any additional legal requirements based on your location and industry.
  • Obtain Necessary Licenses and Permits:
    1. Research the specific licenses and permits required for your type of freelancing business in your state or locality.
    2. Compile all necessary documentation and information for the application process.
    3. Submit your applications for licenses and permits to the appropriate regulatory bodies.
    4. Follow up on the status of your applications and address any requests for additional information.
    5. Once approved, display your licenses and permits prominently in your workspace and ensure compliance with regulations.
  • Ensure Compliance with Tax Regulations:
    1. Understand your tax obligations as a freelancer, including income tax, self-employment tax, and any applicable state or local taxes.
    2. Keep detailed records of your income and expenses throughout the year to facilitate tax preparation.
    3. Consider hiring a tax professional or using accounting software to ensure accurate tax filing.
    4. Familiarize yourself with tax deductions and credits available to freelancers to minimize tax liability.
    5. Stay informed about changes to tax laws and regulations that may affect your business, and adjust your practices accordingly.
  • Protect Your Intellectual Property:
    1. Identify any intellectual property assets associated with your freelancing business, such as logos, designs, or written content.
    2. Explore options for protecting your intellectual property rights, such as trademarks, copyrights, or patents.
    3. Consult with a legal advisor or intellectual property attorney to determine the best strategy for safeguarding your assets.
    4. File necessary applications or registrations to secure your intellectual property rights.
    5. Monitor for any unauthorized use or infringement of your intellectual property and take appropriate legal action if necessary.

Establishing a solid legal foundation ensures compliance and protects your business’s future. Proper legal setup provides peace of mind and sets the stage for long-term success.

Takeaway: Prioritize the legal aspects of your freelancing business to safeguard your future endeavors.

2. GET YOUR FINANCIALS IN ORDER

Managing finances effectively is a common challenge for new freelancers.

Without proper financial management, freelancers risk financial instability and missed opportunities.

Do You Need A Tax ID #/ Employer Identification Number (EIN)?

You likely won’t need a EIN.  If you’re a sole proprietor, you don’t need one – you’ll use your Social Security number instead.  You WILL need one if you decide to set up a different business entity.

Visit the IRS website to learn more about getting an EIN.

Once you have your business name and EIN, head on over to the bank and open up a business bank account.

  • Obtain a Tax ID/Employer Identification Number (EIN):

  • Determine if your freelancing business requires an EIN based on your chosen legal structure.
  • Visit the IRS website to apply for an EIN online or via mail, phone, or fax.
  • Provide accurate information about your business entity and activities during the application process.
  • Receive your EIN immediately upon successful application or within a few business days if applied by mail, phone, or fax.
  • Keep your EIN handy for tax filing purposes and use it for opening business bank accounts and other official transactions.

Do You Need To Open A Separate Banking Account?

YES. You do.

Becoming an independent event contractor means that you are now a business owner (yes, welcome to entrepreneurship!).  The IRS wants you to keep the money that you make in your business separate from your personal money.  And, it’s A LOT easier to track if it’s in a separate account.  You can definitely move that money into your personal account, but make sure that it lands in your business account first.

  • Open a Dedicated Business Bank Account:
    1. Research local banks or credit unions that offer business banking services.
    2. Gather required documents, such as your EIN, business registration, and personal identification, to open an account.
    3. Schedule an appointment or visit the bank branch to speak with a business banking representative.
    4. Choose the type of business account that best suits your needs, whether it’s a checking account, savings account, or both.
    5. Deposit initial funds into your business account and set up online banking for convenient access to your finances.

Get Insurance

You’ll need to get general liability insurance and seriously look into whether or not you should get professional liability insurance.  There are various companies that provide insurance for event planners.  I’ve always used Hiscox (although admittedly, I haven’t shopped around since 2016).

Insider Tip: I heard over and over again that you should outsource that which you don’t have to do,  you don’t enjoy doing, and that doesn’t have to be done by you.  Did I listen? Nope. As I started making more money, things got trickier. And I got myself a good accounting firm.

  • Secure Essential Insurance Coverage:
    1. Research insurance providers that offer coverage tailored to freelancers’ needs, such as general liability and professional liability insurance.
    2. Request quotes from multiple providers to compare coverage options and premiums.
    3. Consider additional coverage based on your industry and potential risks, such as cyber liability insurance or errors and omissions insurance.
    4. Review policy terms and conditions carefully to ensure you understand the coverage limits, exclusions, and deductibles.
    5. Purchase insurance coverage that adequately protects your business assets and mitigates financial risks.

Figure out Your Pricing Structure

One of the hardest situations you’ll encounter in your new business is figuring out how much to charge, when to increase your rates, when to give discounts, etc. Read this article for information on how to determine what to charge.

  • Master Your Pricing Strategy:
    1. Calculate your costs of doing business, including overhead expenses, taxes, and desired profit margin.
    2. Research industry standards and competitive rates to benchmark your pricing strategy.
    3. Consider the value you provide to clients and adjust your rates accordingly.
    4. Evaluate pricing models, such as hourly rates, project-based pricing, or retainer agreements, to determine the most suitable approach for your business.
    5. Regularly review and adjust your pricing strategy based on market trends, client feedback, and changes in your business expenses.

Solid financial foundations ensure stability and pave the way for business growth. Financial stability empowers freelancers to focus on their craft without worrying about monetary issues.

Takeaway: By mastering your finances, you lay the groundwork for a thriving freelancing business.

3. EQUIPMENT – COMPUTER, WIFI, ETC

Freelancers often overlook the importance of investing in essential tools and equipment. Inadequate tools can hinder productivity and compromise the quality of work.

  • Invest in Reliable Equipment:
    1. Assess your specific needs and budget constraints to determine the most suitable computer, peripherals, and software for your freelancing work.
    2. Research reputable brands and read reviews to identify reliable equipment that meets your requirements.
    3. Consider future scalability and compatibility when selecting hardware and software solutions.
    4. Compare prices and look for discounts or promotions to maximize your purchasing power.
    5. Prioritize durability and performance to ensure your equipment can withstand the demands of your freelancing business.
  • Utilize Technology to Streamline Workflows:
    1. Explore productivity tools and software applications designed for freelancers, such as project management platforms, time tracking apps, and invoicing software.
    2. Customize your workflow to leverage automation and reduce manual tasks, saving time and increasing efficiency.
    3. Integrate cloud-based solutions for file storage and collaboration to access your work from anywhere and collaborate seamlessly with clients and collaborators.
    4. Stay updated on advancements in technology and explore new tools and features that can enhance your productivity and creativity.
    5. Seek feedback from fellow freelancers or industry experts to discover innovative solutions and best practices for optimizing your workflow.
  • Build Relationships with Trusted IT Professionals:
    1. Research local IT service providers or freelancers who offer technical support and computer repair services.
    2. Ask for recommendations from colleagues, friends, or online communities to find reliable IT professionals with a track record of quality service.
    3. Schedule a consultation to discuss your needs and evaluate the IT provider’s expertise, responsiveness, and communication style.
    4. Establish clear expectations and agreements regarding service levels, response times, and pricing to ensure a mutually beneficial partnership.
    5. Maintain regular communication and provide feedback to foster a positive relationship and address any issues or concerns promptly.

Equipping yourself with the right tools enables seamless workflow and enhances productivity. Quality tools empower freelancers to deliver exceptional results and exceed client expectations.

Takeaway: Invest in the tools of your trade to elevate your freelancing career to new heights.

Now, let’s explore how to market your services and secure clients as a freelancer.

You don’t need a website in order to become an event contractor.  What you DO need is a fast, hard-working computer that won’t let you down!

Remember, when you’re a contractor, you don’t have an IT number to call, so try to find a good, reputable computer repair person that you like and trust. And of course, strong wifi.

4. GET THE WORD OUT – Launch Your Brand

Ok, all set up? And now the fun part!

Now it’s time to get the word out and get that first client!

Many freelancers struggle to market their services effectively and secure clients.

Without a clear marketing strategy, freelancers may find it challenging to stand out in a competitive market and attract clients.

  • Craft a Compelling Value Proposition:
    1. Define your unique selling proposition (USP) by identifying what sets you apart from competitors and the value you offer to clients.
    2. Tailor your messaging to resonate with your target audience’s needs, pain points, and aspirations.
    3. Highlight your expertise, experience, and achievements to build credibility and trust with potential clients.
    4. Use clear and concise language to communicate the benefits of your services and how they can solve clients’ problems or fulfill their desires.
    5. Test different messaging and value propositions to refine your approach and optimize results based on client feedback and market response.
  • Utilize Online Platforms and Networking Events:
    1. Create professional profiles on freelancing platforms, social media networks, and professional networking sites to showcase your skills and attract clients.
    2. Participate in online communities, forums, and groups related to your industry or target market to connect with potential clients and collaborators.
    3. Attend industry events, conferences, and meetups to expand your network and establish meaningful relationships with peers, mentors, and potential clients.
    4. Share valuable insights, expertise, and resources through blog posts, articles, or social media content to demonstrate your knowledge and position yourself as an authority in your field.
    5. Engage with your audience by responding to inquiries, comments, and messages promptly and professionally to build rapport and nurture relationships over time.
  • Embrace the Excitement of Securing Your First Client:
    1. Celebrate milestones and achievements along your freelancing journey, including landing your first client or completing a successful project.
    2. Express gratitude to your clients for choosing to work with you and provide exceptional service to exceed their expectations.
    3. Request feedback from clients to gain insights into their experience working with you and identify areas for improvement.
    4. Use positive client testimonials and referrals to build credibility and attract new clients to your freelancing business.
    5. Stay humble and hungry for growth by continuously seeking opportunities to learn, evolve, and innovate in your freelancing career.
  • Effective marketing strategies and client acquisition tactics enable freelancers to build a strong brand presence and grow their business.

Building a reputable brand and securing clients are essential steps toward long-term success and sustainability as a freelancer.

Takeaway: By leveraging marketing strategies and client acquisition tactics, you can establish yourself as a trusted freelancer and attract clients who value your expertise and services.

Congratulations on embarking on your freelancing journey! Now, let’s summarize the key takeaways and outline your next steps.

CONGRATULATIONS!  You’re now a business owner!

Prefer infographics over gifs?  Here you go:

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