How to start as a freelancer

Why consider starting a freelance business?

Self-employment is on the rise. With the normalisation of flexible working patterns and remote working, starting a freelance business is a more attractive option for people than ever.

Having multiple clients and revenue streams reduces your dependence on a single source of income, giving you more financial stability. Freelancers often command a higher rate than their in-house peers due to their expertise and the value they bring to their clients.

Freelancing not only provides much-needed financial backup, it could increase your growth opportunities. Working on multiple projects with different clients grows your network and portfolio, allowing you to learn and develop professionally more quickly.

Most of all, freelancing is appealing due to the flexibility it provides. Having control over your own schedule, location and time can bring your work–life balance into harmony.

Freelancing for beginners

Here’s the key steps you need to know when starting a freelance business.

1. Pick a freelance business idea
2. Choose a freelance method
3. Create a freelance business plan
4. Market your idea
5. Choose a freelance platform
6. Winning your first contracts
7. Send your first invoice and get paid
8. Common questions answered

1. Pick a freelance business idea

Certain industries and roles rely on independent contractors more than others, like graphic designers and event management, so do some research on freelancing platforms to see which roles align with your interests, skills and freelance business ideas.

Ideally, you should start a freelance business by specializing in a skill that you’ve already honed during your education and career. However, you can start something new as long as you train and build a portfolio to show off your skills. You might be a keen photographer, an aspiring personal trainer, or want to switch to accounting or web design.

Whether you’re starting new or upskilling your existing traits, online courses can help you to master your skills. Check out Coursera, Udemy or LinkedIn Learning to find programs to help you upskill and to support your freelance business idea.

The most important thing is to find the best business idea that suits you and the freelance job market.

2. Choose a freelancing career method to get started

How you decide to start as a freelancer depends on your lifestyle and needs. If you’re flexible in your workload and work type, think about starting as an independent contractor. These freelancers work on specific projects and typically have more freedom to choose their assignments. The benefits of being an independent contractor mean you can build a working pattern and portfolio that suits you.

Similar to independent contractors, diversified workers get to take on varied projects but they work on different types of projects simultaneously. Diversified workers have various skill sets (such as being both a copywriter and a graphic designer), and often juggle multiple clients and projects.

If you want something a bit steadier, being a temporary worker might appeal. Organizations hire temporary workers to work full time for short-term positions.

If you can’t take the financial leap into freelancing full-time, starting as a moonlighter can help you make the crossover. Moonlighters fit freelance work around their regular employment, benefiting from the stability of salaried employment while they chase their freelance goals.

And if you have ambitions… be a freelance business owner. If you want to start your own small business, hire other freelancers once established, and manage your own operations and staff, this is for you.

3. Create a freelancing business plan

When starting a freelance business, a thorough and sound business plan is essential. Get started quickly with our free business plan template, and follow these key steps.

1. Do your SWOT analysis

Before anything else, figure out what your strengths, weaknesses, opportunities, and threats are. A list of these helps you understand your position in the market and highlights areas you need to keep an eye on.

2. Create a value proposition

Write down what you offer and how it makes you unique. It could be your pricing, experience, business model, or distribution system. Clearly articulating how your freelance services stand out from the competition will make applying for work, and winning it, that much easier.

3. Find your target market

Spend some time identifying and researching your target market. Think about who needs your services, where they are, and what type of business they are. Knowing this helps you to target the right companies and focuses your marketing efforts.

4. Create your distribution system

Knowing how to distribute your work and get yourself out there will be paramount to your success. Build a strong social media presence to display your work, and have a clear and well-designed website to reach new clients around the world. Freelance platforms like Upwork or Fiverr can help you to get initial exposure.

5. Streamline your admin

Freelancing is all about maximizing your time. Streamline your business administration as much as possible, so your unpaid hours of work are kept to a minimum. Investing in accounting software like Xero and email marketing tools, like Mailchimp, can smooth your business admin and keep you organized.

6. Get funding

Every business needs funding to get going. Having a budget outlined and allocated for essentials like creating a website, marketing materials and working capital will help you launch your freelance business. Cost-effective ways to finance your business, such as personal savings, crowdfunding, or small business loans, can help get you on your feet.

4. Market your freelance idea

Finding freelance jobs online for beginners can be hard at first. A successful freelance career needs a strong marketing strategy. Personal branding for freelancers is part of this strategy, as you’ll need to promote yourself to reach potential clients.

To do this, build:

• A strong online profile
• An active social media presence
• An outstanding portfolio of your past work

Create an online profile and freelance online

A strong resume and portfolio on freelance platforms like Upwork and Fiverr are a great base from which to sell your skills and create interest, and give you access to a varied, flexible and global marketplace.

To attract clients, your online freelancing platform should highlight your professional skills, experience, and past work. creating your own freelance website is an extra way to help do this.

Building a clear and user-friendly website takes time, but it’s worth it! Branding decisions, like the fonts, colours, and copywriting style to use, will be key.

Find out more on how to create a business website.

Use social media

Having social media is expected for businesses, and the same goes for freelancers. Use social platforms like X (formerly Twitter), Facebook and LinkedIn to directly market your freelance business. Posting updates about your work and engaging with your core audience helps build a strong online presence and gives clients a sense of your work.

Build your freelance portfolio

Your freelance portfolio is your calling card to win new clients and demonstrate your expertise. So put up your best work and regularly update it to reflect your growing skills and experience.

It’s great if you can include testimonials and high-quality images from your latest projects. You might be lacking paid work examples if you’re starting out, so include other work you’ve completed in your own time to show what you can do.

5. Choose a freelance platform

Deciding where to promote yourself as a freelancer depends on the clients you’re targeting. Fiverr and Upwork, two popular freelancing platforms, are good places to start.

Upwork is the leading platform for finding freelance jobs online for beginners and experienced freelancers alike. The key to freelancing with Upwork is to create a detailed profile and apply for relevant jobs to build a strong client base.

But if you’re looking to start a smaller freelance business, Fiverr could be better for you as it’s great for those looking for smaller gigs. This freelance website lets you offer specific services at set prices, making it easier for clients to hire you.

It’s also worth checking out freelancing platforms like Freelancer.com and Toptal for more opportunities. Each platform has its own unique features and client base, so choose the one that best aligns with your own skills and interests .

6. Win your first freelance contracts

Becoming a freelancer isn’t easy – it takes resilience when you’re starting out. Set yourself realistic goals, like securing your first freelance agreement contract or making a modest amount, so you have something to aim for.

To give yourself the best shot, learn the basics of negotiation and project management before starting your freelance business.

Learn negotiating strategies before starting your freelance business

The art of negotiation cannot be underestimated when it comes to freelancing. You’ll be setting your own rates, and getting them wrong means being underpaid or not getting the job at all.

To negotiate your fee successfully, keep these steps in mind:

Understand your options

If a client doesn’t hire you, know what other options you have and how many other streams of revenue you can pursue. Your goal, of course, is to avoid underselling yourself while still being an attractive proposition for the client. So strike a balance between knowing the worth of your work and what the options are for your client.

Determine ZOPA

ZOPA, the ‘zone of possible agreement’, [US: ‘zone of possible agreement,”] is the range in which agreements can be made that benefit both parties. Understand the market and know the bottom and top range for your work to help you secure your first freelance agreement contract.

Set the price first

Begin negotiations with your rate to set the tone of the discussion. Present your pricing confidently and be prepared to justify it based on the value you offer and your knowledge of current market rates.

Learn more about rate-setting discussions with our guide on Five important business negotiation strategies.

Harness soft skills and project management with freelancing apps

Being a freelancer isn’t just about perfecting and selling your professional skills – you’ll need to develop and hone your soft skills too. Confidence, problem-solving skills, and being able to work autonomously all help you win and deliver your work.

Also, strong freelance project management, organizational skills and time management help you meet your contractual obligations and secure repeat business.

To keep on top of it all, remember these three things:

Commitment

Before starting a project, make sure both you and the client are clear on the project’s terms. Clearly communicate any expectations and get commitment from the client to the project’s timeline and goals in writing so you all know where you stand.

Accountability

Fostering a culture of responsibility and continuous improvement helps to successfully deliver a project. So regularly review processes, make sure everyone involved in a freelance project knows what they’re responsible for, and hold team members accountable.

Time management

Tracking a project, either manually or by using software, helps you monitor its progress, anticipate delays, and let the client know in advance.

Apps for freelancers that quote, track, invoice, and monitor money on the go, like Xero Projects, free up your time so you can spend more of it on your work. Time management for freelancers is the bedrock of a successful career and will help keep your business on track.

Get these soft skills right and you’ll deliver your best work, helping you satisfy your clients and secure more work from them in the future.

7. Send your first freelancing invoice and get paid

Once you’ve agreed the contract with the client and you’ve completed the contracted work, send your invoice so you get paid! How you handle invoicing and payment leaves a lasting impression, so keep communications professional at this final stage.

Before sending your invoice:

• Check you’ve included all the necessary details
• Include clear payment terms so you can follow up if your client doesn’t pay you on time

Download Xero’s freelance invoice template to get started.

And if the client is slow with payment, follow up to give them a polite nudge.

Find out more about managing late payments and freelance invoicing.

How to freelance as a side hustle

1. Check your primary employer’s policy on freelancing

Most companies understand that employees might take on freelance jobs, especially if you’re in a creative role that lends itself to freelancing. However, your employer is likely to have policies that restrict you from dealing with a competitor or directly with a client of theirs, or they may even forbid you from working within the same industry due to a conflict of interest. So check your employer’s policy first so you can start a freelancing business without putting your primary income at risk.

2. Freelance in your own time

No matter how busy you get, only ever freelance in your own time. Your primary employer – and your colleagues – should get the same professionalism from you as they always have. You’ll have to work out how to effectively manage your time outside of your primary work hours.

Perceptions are important, so avoid taking freelance-related calls at your main job. Make it clear to your clients that they’ll have limited access to you during regular office hours. If they’re used to hiring freelancers, they should understand this.

3. Find low-budget ways to attract business

Checking freelance job websites, maintaining an online portfolio to showcase your work, and having your own website to showcase your previous projects are all low-cost ways to secure work.

If you’re just starting out as a freelancer and don’t have a portfolio of work, you could:

• Search online for freelance jobs for beginners, like volunteer positions, to build your portfolio
• Offer to do free or lower-paid work for people within your network in return for experience
• Offer free training or seminars in your field to create networking opportunities for freelancers that could lead to paid work

4. Record your time

Always document what you do and when – this is crucial when it comes to creating accurate invoices and charging the client correctly. Even if you’ve agreed on a flat fee or a retainer, time recordings are helpful. They’ll tell you how long a job actually took – as opposed to what you thought it would take. This helps you estimate future jobs more accurately.

Time recording can be done quickly and easily on your mobile phone using apps such as MinuteDock, and Harvest.

5. Deliver what you promise

When first starting your freelance business, it can be tempting to over-promise to win a job. But that can be damaging. Be realistic about what you can deliver and when, then convey that clearly to the client. You both must understand the scope of the job from the beginning and agree on the outputs you’re expected to deliver.

Do your research before agreeing to a budget or timeline, and protect yourself by confirming what you’ve agreed to in writing. If expectations seem vague, make an effort to straighten them out. Question every assumption you made when scoping the project, and document the scope and assumptions in your client agreement. You’ll also need to manage expectations. Stay in touch with your client regularly and tell them if something is taking longer than expected so they can plan accordingly.

6. Avoid burnout

When you’re freelancing on the side, life can get hectic. Even if you’re enjoying the buzz of extra income and exciting projects, it’s important to have realistic expectations of yourself and ensure you don’t overdo it at the expense of your family time or mental health.

Overworking can eventually lead to exhaustion and a dip in productivity which can be detrimental to your side hustle. You can avoid burnout by:

recognizing when you have too much work and saying no to new projects

partnering with other freelancers to share the workload

getting a bookkeeper or accountant to take care of your finances

taking time off

7. Create a goal to work towards

Give yourself a clear, defined objective when you’re starting out, to give you incentive and purpose. This could be setting up the business or having the chance to work on a pet project.

Once you’re up and running, keep reviewing your goals along the way. Make sure the type of work you’re doing serves those aims and ask yourself the following questions:

• Is it fun?
• Is it profitable?
• Am I attracting the sorts of jobs (and clients) I want to work on?
• Is freelancing still worthwhile for the time I’m putting in? If not, what do I need to change?

8. Bookkeeping for freelancers: know your taxes obligations

As a freelancer you’re classed as self-employed and are therefore responsible for your own taxes. Here’s some key tax tips for freelancers to take the headache out of your bookkeeping:

• Set up a bookkeeping system. Bookkeeping for freelancers is essential as it helps you track your expenses, plan payments and monitor your accounts, so you’re ready at tax time.
• Seek professional help from a financial advisor to help organize your bookkeeping and to make sure you’re tax compliant.
• Set aside money from each payment you receive from clients so you have enough saved for your tax contributions.
• Know which expenses you can claim, and which you can’t. Common tax-deductible expenses are home office supplies, work-related travel, and marketing costs.

Even if you see your extra work as a side hustle, you may still need to sign up as self-employed and pay taxes on any money you make.

Considerations before starting a freelance business full time

Freelancing full-time seems like the dream for many, but there’s a lot to consider before you take the plunge and quit your regular job. First, you’ll need to assess your finances and whether you can afford to leave your main job. Online educator Ryan Robinson recommends that you grow your side income to at least between 50% and 75% of your total current income before leaving your full-time job, depending on your risk tolerance. See step 5 of Ryan’s blog How to earn more money freelancing.

While matching or increasing your regular income is an important consideration, there are others too. For example, you’re likely to be working alone for most of the week – is this something you can cope with? You’ll also need to have self-discipline and hold yourself accountable: there’s no one to organize your workload. Can you be sure you’ll regulate the time and effort you put in to avoid burnout and deliver what your clients expect?

Becoming a full-time freelancer can give you a better work-life balance and provide a greater sense of achievement, but only if you’ve considered all the implications first.

Frequently asked questions about freelancing

Can I freelance with no experience?

If you have no experience, first consider what you’d like to do. Some of the most in-demand jobs for freelancers include copywriters, graphic designers, accountants, bookkeepers, web designers, coders and digital marketers. Once you’ve decided on a job, you can start learning and gaining experience in this field.

How can beginners start freelancing?

When starting a small business and looking for your first client, first establish what kind of work you’d like to sell and then make sure your skill set is relevant. Once you know what you’ll be doing and how much you’re going to charge, you’ll need to market your business and build a portfolio that showcases relevant and high-quality work.

How do freelancers get paid?

You can get paid in several different ways, depending on what you have agreed with the client. Most freelancers are paid via bank transfer but some clients might prefer to pay by cheque or secure payment portals like PayPal.

As a freelancer, you have flexibility with how you’re paid and how often. You’ll need to establish your payment terms – will you work on a project basis or a retainer? When will you send invoices, and when is payment required? Include this information in the contract you send to your client.

Learn about sending invoices with Xero

How do I accept freelance payments?

If you’re starting your freelance journey and need a way to accept payments from clients, it’s worth considering a payment processing solution. Solutions like the option to accept payments online in Xero enable you to send your invoice with a ‘Pay now’ button to make it easier for your clients.

Is freelancing a good career?

Freelancing can be a great option, with the opportunity to earn more than you would in employment. You’ll also be your own boss, manage your own time, and have more control over your work-life balance. But income isn’t always guaranteed. So while freelancing can be a good career move, it takes a lot of time and hard work to become a successful freelancer.