In a previous post, we discussed how to integrate freelancing into your job search in ways that compliment your efforts to land your dream job. In this article, we will take a closer look at best practices when it comes to making freelancing work for you.
Unfortunately, getting started with freelancing can eat up a lot of time without immediate financial reward. In addition, some people get overwhelmed by this very different style of work. Being successful with freelancing requires making use of some basic strategies.
Here are 8 best practices to make freelancing while unemployed work for you:
1) Adjust to Unpredictable Income
People that are used to working in wage or salary positions as employees come to expect that they will receive a certain amount of money at a certain time. And, it may be a shock to adjust to the fact that some weeks you may earn $12, while others you may earn $1,000. However, this is the nature of the beast.
This problem is most amplified when you first get started with freelancing. After you have a more established client base, your income usually stabilizes, at least in terms of a fairly reliable baseline.
Strategies that can help to manage cash flow for freelancers include:
- Contributing anything over a certain amount earned each week to an emergency fund to access during the lean weeks.
- Getting ahead on certain critical bills to build some flex into your financial obligations.
- Strong basic budgeting skills to prioritize expenditures according to your short and long term financial goals and needs.
2) Tax Considerations
Because you are working as an independent contractor instead of an employee, your pay won’t have the necessary taxes withheld before it goes into your bank account. If you do not set money aside for taxes, you could find yourself in an economic crisis come tax time.
The amount to set aside will vary depending on factors such as your total income for the year, your tax bracket, and the types of deductibles you can claim against your income. However, a safe bet is to set aside as much as 20% of your gross income for tax purposes.
In addition, keep very good records of any expenditures that you invest in freelancing. For example, if you buy a new printer, purchase office supplies, or take a class to improve your skillset, save the receipt. Even bills such as your internet or mobile phone may become valuable deductibles if they are related to the work you do as an independent contractor.
3) Calculate and Track Your Wages
It is very easy to lose track of how much time you are investing into freelance work. Without good record keeping, you can’t set good goals or know for sure if you are even earning a living wage with your work.
This is compounded by the fact that many projects in the gig economy are paid on a project, rather than hourly, basis. Add in the fact that you will need to invest time into landing the gig, and you have a recipe for a very low hourly wage.
Expect to make next to nothing per hour when you get started with freelancing. It takes time to get set up on websites that will link you to clients, craft your application materials for each job you apply to, and negotiate with clients prior to agreeing on a contract.
Keep a journal or spreadsheet that tracks the hours you worked, the work you did, and money earned. Over time this data will allow you to see trends, identify how you are spending your time, and help you select the most lucrative types of projects going forward.
4) Craft a Strong Proposal
Applying for jobs in the gig economy is an entirely different ball game than applying to traditional jobs. First, it is rare that a prospective client is interested in reading through your full resume, so you won’t have that document to showcase your entire work history. Second, freelance jobs are going to be much narrower in terms of the skills the client cares about. Finally, in most cases, the client is not worried about how you will fit in the larger employee pool, they just want to know you can do the job well, on time, and with minimal need for hand holding.
The biggest mistake people make when it comes to proposals is to write something generic that covers their skills and send the same thing to every job ad. Experienced clients are on to this tactic and they usually delete those proposals within a few seconds. Instead, take the time to actually read the entire job ad, then craft a proposal that makes it clear right off the bat that you understand the job and have the required skills to do it.
You can use templates to save time on proposals. However, instead of trying to do a "one-size-fits-all" approach, use a modular style that is broken into sections. Then you can craft a unique and meaningful introduction for each proposal that is tailored to the job, and supplement it with only the most relevant skills and qualifications from your template.
Here are a few other tips for strong proposals for freelance jobs:
- Keep it very brief, concise, and to the point.
- Include a link to your website, online portfolio, or reference your profile where more details about your work history can be found in the event that the client is interested.
- Include 1-3 relevant samples of your work that are as close to the job at hand as possible.
- Explicitly address any questions or concerns raised in the job ad near the top of your proposal.
- If you meet the requirements of the job, explicitly state that near the top of your proposal. If you don’t, explain your relevant substitute qualifications. (For example, you may not have a degree, but you have 10 years of experience.)
- If you have positive feedback from previous clients on that platform, be sure to mention it, and consider quoting a few if they are relevant to the job.
5) Client Reviews
Consistent positive reviews from past clients are the cornerstone of freelancing on most online platforms. In some ways, your review history (along with a well-crafted profile) can even replace the traditional resume as the “go-to” proof of your value to a prospective client.
It is appropriate to approach your new clients after the job is done to ask for feedback and to gently remind them that client feedback is very important to your freelance work. Here is an example of how you might frame that conversation:
JoAnne, thank you for giving me the opportunity to work with you on this project. I hope you are happy with the services I provided. As you are probably aware, feedback from clients is an important aspect of my ability to be considered for future jobs on this platform. If you have the time, please consider leaving some feedback about your experience working with me. I enjoyed working on this project and I hope you will keep me in mind for similar projects in the future. Best, Joe.
6) Develop Relationships with Clients
By far, the most time consuming aspect of freelancing is chasing gigs. Therefore, anything you can do to reduce this time is going to raise your average hourly earnings. Landing long-term repeat clients is critical to making most types of freelance work viable.
Cultivate strong relationships with clients by using these strategies:
- Listen closely to their needs and expectations.
- Ask questions if you need clarification to complete a job successfully.
- Be open and responsive to any feedback they offer.
- Before you submit an invoice for the work you have done, check with the client to make sure they are satisfied.
- Follow up with new clients after the job is complete and let them know you would like to work with them on future projects.
7) Choose the Right Gigs
It does take some time to learn the lay of the land when you are just getting started off with freelancing. Finding the right jobs can vary depending on your skill set, the platform(s) you are using, and many other factors. However, choosing the wrong type of work can be a costly mistake in terms of your time, motivation, and reputation on the site.
Here are some quick tips to choosing gigs that will be more likely to result in success:
- Many sites include reviews of clients as well as freelancers. Focus on applying for jobs with clients who have been positively reviewed by other freelancers.
- If working with a client that is new to the site, be sure to spend a little extra time feeling out the job and the client before agreeing to a contract.
- Avoid applying to job ads that demonstrate the client may have poor communication skills (such as a job ad that is incomprehensible or written in all caps with plenty of demanding language).
- Choose projects that are broken into manageable parts, have clearly articulated expectations, and fit squarely in your wheelhouse in terms of your skills. (You can challenge yourself more once you are established.)
8) Manage Your Time
Freelancing is not a substitute for the work you are doing in your regular job search such as researching opportunities, applying for jobs, and networking. Make sure that you are balancing your time so that your job search won’t suffer.
Decide in advance how much time each week you want to devote to getting started with freelancing and stick to it. Block some time for working on your profile, putting together a portfolio of work samples, applying to gigs, and watching the job feed.
For some, freelancing is a way to make some extra money during an extended job search. For others it becomes its own source of income that may, eventually, replace a full-time job. Regardless of your situation, be sure to follow the tips in this guide to make the most of the time and energy you invest into freelancing.