The Ultimate Guide to Freelancing - Part Two 

Published by 

W. Paul Alexander

for 

Better Call Paul

NOTE:  This guide is the property of another author who has asked me to reproduce it on my blog.  Therefore, even though this is not my work, I have the express written consent of the owner of this content, who has specifically asked me to reproduce it on my blogs; in exchange, the author will share my blog posts and articles on her site as well.  It is very long, but is very helpful as well.  Because of the length and the different topics discussed, I will be posting in multiple posts.  This is the second one, and will cover the topics below. 

ORIGINALLY APPEARED ON TOPTAL.COM, with whom I am in collaboration with regards to sharing articles between us and posting on each other's blogs.  

Plus, this is simply a great guide for those who are considering freelancing.  

So, here we go - 

To see the first post (sections 1-3), you simply need to click here

4. Working as a Freelancer: Business Basics for the First-Time Freelancer

One of the major challenges of going out on your own as a freelancer is assuming full responsibility for your income. While this is leap is incredibly exciting, it can also be anxiety-inducing: How do you protect yourself from legal risk? How do you handle taxes as an independent freelancer? What about freelance health insurance? This section will seek to answer all of the above and more. While much of the information will be directed at freelancers based in the United States, most of it is applicable to freelancers worldwide.

Register Your Business

When beginning a freelance career, you’ll want to formally establish your freelancing practice as a business. In order to register in the U.S., you’ll need to obtain an Articles of Organization form and pay a small fee that varies by state. While in almost all cases in the U.S. your needs can be met by structuring your freelancing operation as a sole proprietorship (SP) or as a limited liability company (LLC), it may be helpful to consult an attorney or use a service such as LegalZoom to make sure you’re not missing anything. Note that different countries will have different rules around business registration, including varying degrees of coverage on a regional versus national level. For example, David found that some Canadian provinces set different rules for registering a business, requiring an update when he moved provinces.

Why incur the expense of registering as a business at all? Registering as a business shields you from personal liability in the case of an LLC–i.e. it’ll help make sure you don’t lose your house if something related to your freelancing business work goes awry–and will allow you to begin deducting business expenses from your taxes. As an added bonus, the cost of registering your business is tax deductible.

Acquire a Business License

In addition to registering your business as an SP or LLC, if you’re working out of the United States you may need to obtain a business license in order to work as a freelancer. Note that the requirements for obtaining a business license vary by state, so it’s best to look into local requirements. Some states such as Washington require all businesses to get a business license, while others require licenses from a narrow group of professions (e.g. lawyers, doctors, architects, etc.).

Find Health Insurance

One of the biggest concerns of freelancers relates to health insurance. If you’re based out of the United States, you have a variety of options to make sure you’re covered in sickness and in health:

• If you have a full-time employer but are freelancing on the side, you’re probably best off keeping coverage from your employer.If you’re married, join your spouse’s plan. Some plans may have you totally covered, others may require your spouse to purchase a new joint policy.
• If you’re under 26 years old, look into staying on your parents’ plan. Plans that offer dependent coverage must do so until the dependent turns 26 as part of the Affordable Care Act.
• If you don’t fit into any of the above, see if there’s a freelance union that you can join that offers plans. If this option isn’t available to you, shop for a plan in a federal or state online marketplace. Begin this search at HealthCare.gov, a site operated under the Affordable Care Act to serve the residents of U.S. states that have opted not to create their own state exchanges.

Taxes: Tips and Best Practices

In the United States, freelancers are responsible for paying any federal, state, and local taxes. Rather than devote a huge section to this topic, we suggest hiring an accountant when you first begin freelancing in order to make sure your newfound business is fully compliant. Alternatively, check out some of the great resources already online, especially those from TurboTax, to begin your freelance tax education.

In the United States, freelancers are responsible for paying any federal, state, and local taxes. Rather than devote a huge section to this topic, we suggest hiring an accountant when you first begin freelancing in order to make sure your newfound business is fully compliant. Alternatively, check out some of the great resources already online, especially those from TurboTax, to begin your freelance tax education.

Save 20% of anything you earn as a benchmark to make sure you’ll be able to meet your tax obligations.

Keep any and all receipts connected to your freelancing operation in the case of an audit, and in case you need to get expenses reimbursed by a client.

Establish a Comfortable Home Office and Work Environment

Finally, if you’re working from home, take the time to set up a proper home office. Invest in an ergonomic chair and comfortable desk, as this is where you’ll be spending the vast majority of your time. Consider buying backup hardware in case you run into any technical difficulties while on the job. "If your place offers both cable and fiber optic internet, I’d take them both," says Lucas. "If one goes down, you can use the other. The same goes for a computer — buy a backup and make sure you can switch between one and the other fairly quickly."

In addition to your physical office, make sure you’re well-equipped to work collaboratively in a remote environment. Some of the tools favored by remote freelancers globally include Zoom for video chats, TopTracker for time tracking and invoicing, Google Docs for collaboration, and Trello for project management.

5. Projects for Freelancers: How to Leverage Networking, Branding, and Talent Networks

One of the greatest challenges you’ll face as a freelancer is finding your next engagement. See below for our guide on how to effectively manage your own brand, how to market yourself, and how to take advantage of talent networks to expose yourself to lucrative freelance opportunities.

Leverage Your Personal Network

Before you begin working as a freelancer, reach out to former colleagues and let them know that you’re offering your services as a freelancer. This could be as simple as publishing a thoughtful LinkedIn post to going through your list of contacts and emailing everyone with the exciting news. All of our freelancers interviewed have received a huge selection of jobs from their personal network. If you build a reputation as a reliable and efficient worker, this could be enough to support your business entirely. "I most definitely do not advertise," says Solon. "I just do the work to a top-notch standard, and that brings clients in."

Be Conscious of Your Online Presence

Make sure to clean up your public image–anything from your LinkedIn to Twitter to those old Facebook posts you may have forgotten about. While this is important for employment of any type, it’s particularly critical for freelancing where your name and reputation are responsible for bringing in business. Lucas recommends a simple trick to check on the health of your public presence: "Google yourself from time to time and see what people find about you."

Consider opening up a personal website in your name that you can direct clients to. While not absolutely necessary and more important for certain types of work over others (e.g. development and design), a personal website can be a great place to introduce yourself to clients and show off a portfolio of previous work. When publishing a portfolio online, make sure you have permission to speak about the work publicly.

Outside of more inbound methods, there are plenty of opportunities to get proactive. Author a guest post for an industry blog or publication; host a workshop or teaching event; attend industry conferences and events.

Use Talent Networks to Access Lucrative Engagements

Professional talent networks such as Toptal offer some key advantages that create an almost blended freelance-company environment to support you in your career as a freelancer and give you access to some of the highest-paying freelance jobs. These services handle a wide variety of the administrative and logistical challenges discussed above (including marketing, contract negotiation, and invoicing, among many others). The curation of job opportunities is a particularly salient feature of freelance marketplaces, especially when these opportunities would otherwise be hard to come by. "It’s a strange dynamic of the labor market for programmers," says Lucas. "I send my resume to places, and I don’t get a response; I talk to a recruiter or apply through Toptal, same resume, and they’re asking me when I can start."

That's all for this one.  

Next post will include the most important part of being a freelancer -- GETTING PAID -- so make sure you tune in to the next post and get some excellent advice to ensure you never have to struggle to get paid by clients