How to be a freelancer: steps to start and get paid

Published Monday 30 March 2026

Table of contents

• What is freelancing?
• Is freelancing right for you?
• Why consider starting a freelance business?
• How much do freelancers make?
• Steps to start freelancing
• Managing your freelance business
• Start your freelancing journey with Xero
• FAQs on freelancing

Key takeaways

• Start freelancing part-time while keeping your current job to build your client base and income gradually, aiming for your freelance earnings to reach 50-75% of your current salary before making the full-time transition.
• Create a strong online presence by building detailed profiles on freelance platforms like Upwork or Fiverr, developing a portfolio that showcases your best work, and maintaining active social media accounts to attract potential clients.
• Set up proper business foundations from the beginning by choosing an appropriate business structure, creating clear contracts that outline project scope and payment terms, and implementing a bookkeeping system to track income and expenses for tax purposes.
• Research market rates thoroughly before setting your pricing, and learn basic negotiation skills to communicate your value confidently while avoiding the trap of undercharging for your services.

What is freelancing?

Freelancing means you work for yourself, offering your services to different clients, rather than working for a single employer. You're your own boss, which means you have control over the projects you take on and how you manage your time. It's a move away from a traditional job structure towards more independence and flexibility.

Is freelancing right for you?

Before you dive in, it's worth thinking about whether the freelance life fits your personality and goals. While the freedom is a big plus, it also comes with challenges like managing an irregular income and handling all your own admin. Ask yourself a few questions:

• Am I self-motivated enough to manage my own schedule?
• Can I handle the financial uncertainty, especially at the start?
• Am I comfortable with marketing myself and negotiating with clients?
• Do I enjoy working alone?

Answering these honestly will help you decide if you're ready to make the leap.

Why consider starting a freelance business?

Freelancing lets you build a career on your own terms, joining a sector that represents over 90% of the business population in developed economies. Here's why more people are making the switch:

• Income diversification: Working with multiple clients reduces your dependence on a single employer.
• Higher earning potential: Freelancers often charge more than in-house employees for the same expertise.
• Faster professional growth: Varied projects help you build skills and expand your network quickly.
• Schedule flexibility: You control when, where, and how much you work.
• Better work-life balance: Set boundaries that fit your lifestyle, not someone else's calendar.

How much do freelancers make?

There's no single answer to this question: freelance income varies widely. Your earnings will depend on your industry, your level of experience, the demand for your skills, and where you're located. A graphic designer in a major city will likely have different rates than a writer in a small town.

Remember to think about your pricing in terms of both your rate and your total income. A high hourly rate doesn't mean much if you only have a few hours of work. As you build your portfolio and reputation, you can start to increase your rates and secure more consistent projects.

Steps to start freelancing

Becoming a freelancer involves ten key steps, from identifying your service to collecting your first payment. Follow this sequence to launch successfully:

1. Pick a freelance business idea
2. Choose your freelancing approach
3. Decide between part-time or full-time
4. Create a freelancing business plan
5. Handle legal requirements
6. Market your freelance services
7. Choose a freelance platform
8. Set your pricing
9. Win your first freelance contracts
10. Send your first invoice and get paid

1. Pick a freelance business idea

Picking a freelance business idea means identifying a service you can sell based on your skills, experience, or interests. Start by assessing what you already know and what the market needs.

Consider these approaches:

• Build on existing skills: Specialise in something you've already developed through education or work experience.
• Learn something new: Train in a high-demand area like web design, accounting, or digital marketing.
• Follow your passion: Turn a hobby like photography or fitness coaching into a paid service.

Research freelancing platforms like Upwork and Fiverr to see which roles are in demand. Online courses from Coursera, Udemy, or LinkedIn Learning can help you upskill quickly.

The best freelance idea matches your strengths with genuine market demand.

2. Choose your freelancing approach

Choosing your freelancing approach means deciding how you'll structure your work based on your lifestyle, risk tolerance, and goals. Here are the main options:

• Independent contractor: Work on specific projects with freedom to choose assignments and build a portfolio that suits you.
• Diversified worker: Offer multiple skill sets (like copywriting and graphic design) and juggle varied projects simultaneously.
• Temporary worker: Take full-time, short-term positions with organisations for steadier income.
• Moonlighter: Fit freelance work around regular employment to try it out before going full-time.
• Freelance business owner: Build your own company, hire other freelancers, and manage operations as you grow.

Your choice depends on how much risk you can take and how quickly you want to transition.

3. Decide: part-time or full-time?

You don't have to quit your job to start freelancing. Many people begin by freelancing on the side as a 'moonlighter' to try it out and build income without taking a big financial risk. This lets you grow your client base at your own pace.

Going full-time requires careful financial and personal preparation, as data shows only about one in three small businesses reach their ten-year anniversary. Don't quit your job until you've assessed whether you're ready.

Consider these factors before making the leap:

• Financial readiness: Aim to grow your freelance income to 50–75% of your current salary before leaving full-time employment.
• Working alone: Freelancing often means spending most of your week without colleagues; make sure you can handle the isolation.
• Self-discipline: Without a manager, you're responsible for organising your workload and holding yourself accountable.
• Burnout risk: Can you regulate your time and effort to deliver quality work without overworking?

Full-time freelancing can improve your work-life balance and sense of achievement, but only if you've prepared properly.

4. Create a freelancing business plan

A freelancing business plan maps out how you'll find clients, deliver services, and manage your finances. Even a simple plan helps you stay focused and make better decisions.

Follow these steps to create yours:

1. Complete a SWOT analysis: Identify your strengths, weaknesses, opportunities, and threats.
2. Define your value proposition: Clarify what makes your services different from competitors.
3. Identify your target market: Determine who your ideal clients are and where to find them.
4. Build your distribution system: Set up your online presence through a website and social media.
5. Streamline your admin: Use tools like Xero for invoicing and Mailchimp for client communication.
6. Secure funding if needed: Consider savings, crowdfunding, or small business loans to cover startup costs.

Get started quickly with this free business plan template.

5. Handle legal requirements

Getting your business set up correctly from the start saves headaches later. You'll need to decide on a business structure, which for most freelancers is a sole proprietorship or sole trader. This is the simplest structure to set up. You may also need to register your business name. Look into basic contract templates to protect both you and your clients. A clear contract outlines the scope of work, deadlines, and payment terms, ensuring everyone is on the same page.

6. Market your freelance services

Marketing your freelance services means making yourself visible to potential clients through online profiles, social media, and a portfolio of your work. Strong self-promotion is essential, especially when starting out.

Focus on these three areas:

• Build a strong online profile: Create detailed profiles on freelance platforms that highlight your skills, experience, and past results.
• Maintain an active social media presence: Post updates about your work and engage with your target audience on platforms like LinkedIn, X, or Instagram.
• Develop an outstanding portfolio: Showcase your best work with high-quality images, case studies, and client testimonials.

Create an online profile and freelance online

Your online profile is often the first thing potential clients see. A strong profile on platforms like Upwork and Fiverr gives you access to a global marketplace and helps you stand out from competitors.

To attract clients, highlight your professional skills, relevant experience, and examples of past work. Be specific about the results you've delivered.

Consider creating your own freelance website as well. A clear, user-friendly site reinforces your credibility. Pay attention to branding decisions like fonts, colours, and copywriting style to create a consistent professional image.

Find out more on how to create a business website.

Use social media

Social media helps you reach potential clients, build credibility, and showcase your expertise. Most clients expect freelancers to have an active online presence.

Use platforms like LinkedIn, X (formerly Twitter), and Facebook to share updates about your work. Engage with your target audience by commenting on industry discussions and responding to questions. Consistent activity gives clients a sense of your skills and professionalism.

Build your freelance portfolio

Your freelance portfolio demonstrates your expertise and helps potential clients decide whether to hire you. A strong portfolio can be the difference between landing a project and losing it to a competitor.

Build an effective portfolio by:

• showcasing your best and most relevant work
• updating it regularly as your skills improve
• including testimonials from satisfied clients
• adding high-quality images or screenshots of completed projects
• featuring personal projects if you lack paid examples

7. Choose a freelance platform

Choosing a freelance platform depends on the type of work you want and the clients you're targeting. Here are the main options:

• Upwork: The largest platform for freelancers at all experience levels; create a detailed profile and apply for jobs to build your client base.
• Fiverr: Ideal for offering specific services at set prices; works well for smaller gigs and beginners.
• Freelancer.com: Another general marketplace with a wide range of project types.
• Toptal: Connects top-tier freelancers with high-paying clients; requires a rigorous screening process.

Each platform has its own client base and fee structure. Test a few to see which aligns best with your skills and goals.

8. Set your pricing

Deciding how much to charge is one of the biggest challenges for new freelancers. Common pricing models include:

• Hourly: You charge for each hour you work; this is simple and great for projects with an unclear scope.
• Per-project: You charge a flat fee for the entire project; this gives clients cost certainty and rewards you for efficiency.
• Retainer: A client pays you a set amount each month for a specific amount of work; this provides a predictable income stream.

Research what others in your field are charging to make sure your rates are competitive but still value your expertise.

9. Win your first freelance contracts

Winning your first freelance contracts requires persistence, clear goals, and strong communication skills. Most freelancers don't land clients immediately, so set realistic expectations.

Start by setting achievable targets:

• secure your first signed contract within a specific timeframe
• aim for a modest income goal in your first few months
• build a base of repeat clients before expanding

To improve your chances, learn the basics of negotiation and project management before you start pitching.

Learn negotiating strategies before starting your freelance business

Your ability to negotiate directly affects your income as a freelancer. Setting rates too low means being underpaid; setting them too high may cost you the job.

Follow these steps to negotiate effectively:

1. Understand your options: Know what other work you can pursue if this client doesn't hire you, so you don't undersell yourself out of desperation.
2. Determine your zone of possible agreement (ZOPA): The ZOPA is the range where both you and the client benefit; research market rates to identify your minimum and maximum.
3. Set the price first: Open negotiations with your rate to anchor the discussion; present your pricing confidently and justify it based on the value you deliver.

Harness soft skills and project management with freelancing apps

Soft skills are just as important as technical expertise. Confidence, problem-solving, and the ability to work independently help you win clients and deliver quality work.

Strong project management keeps you on track and builds client trust. Focus on these three principles:

• Commitment: Clarify project terms, timelines, and expectations with the client before starting; get everything in writing.
• Accountability: Define responsibilities clearly and review progress regularly; take ownership of your deliverables.
• Time management: Track your projects using software like Xero Projects to monitor progress, anticipate delays, and communicate proactively with clients.

Mastering these skills helps you deliver consistently, satisfy clients, and secure repeat business.

10. Send your first invoice and get paid

Sending your first invoice marks the final step in completing a freelance project. Professional invoicing leaves a positive impression and helps you get paid on time.

Before sending your invoice, check that you've included:

• your business name and contact details
• the client's name and address
• a clear description of the work completed
• the agreed payment amount
• your payment terms and due date
• accepted payment methods

Download Xero's freelance invoice template to get started.

If the client is slow to pay, follow up with a polite reminder. Clear payment terms make it easier to chase overdue invoices professionally.

Managing your freelance business

Once you're up and running, the focus shifts to managing your business for the long term. This means staying organised, looking after your wellbeing, and keeping an eye on your goals.

Time management and avoiding burnout

Avoiding burnout is essential when juggling freelance work alongside a full-time job. Overworking leads to exhaustion, lower productivity, and potential damage to both your side hustle and your health.

Protect yourself by:

• recognising when you have too much work and declining new projects
• partnering with other freelancers to share the workload
• delegating bookkeeping and finances to a professional
• scheduling regular time off to recharge

Check your employer's policy before taking on freelance work. Many companies allow side projects, but some restrict working with competitors, their clients, or within the same industry.

Review your employment contract for non-compete clauses or conflict-of-interest policies. Starting a freelance business without checking could put your primary income at risk.

Freelance only in your own time. Your primary employer and colleagues should see the same professionalism from you as always. Avoid taking freelance calls during work hours, and let clients know you have limited availability during the day. Most clients who hire freelancers understand these boundaries.

Finding work without a portfolio requires creative approaches. Low-cost strategies can help you build experience and attract your first clients.

Try these tactics:

• search freelance job sites for beginner-friendly or volunteer positions
• offer discounted work to people in your network in exchange for testimonials
• host free training sessions or seminars to demonstrate your expertise and meet potential clients

Recording your time helps you invoice accurately and understand how long projects actually take. Even with flat-fee or retainer arrangements, tracking hours improves your estimates for future work.

Use mobile apps like MinuteDock or Harvest to log time quickly. Consistent tracking reveals patterns that help you price more profitably.

Deliver what you promise. Over-promising to win a job often backfires with missed deadlines and damaged relationships. Be realistic about what you can deliver and when.

Protect yourself and your client by:

• clarifying the scope and expected outputs before starting
• researching thoroughly before agreeing to a budget or timeline
• documenting all agreements and assumptions in writing
• questioning vague expectations until they're clear
• communicating proactively if timelines shift

Bookkeeping for freelancers: know your tax obligations

Freelancers are responsible for their own taxes. As a self-employed worker, you need to track income, manage expenses, and set aside money for tax payments throughout the year.

Follow these bookkeeping essentials:

• set up a bookkeeping system to track expenses, plan payments, and monitor your accounts
• Seek professional help from a financial advisor or accountant to stay tax compliant, as receiving business advice is associated with better performance and improved survival rates for small businesses.
• Set aside a portion of each payment for tax contributions.
• Learn which expenses you can claim, such as home office supplies, work-related travel, and marketing costs.

Even if you treat freelancing as a side hustle, you may still need to register as self-employed and pay taxes on your earnings.

Setting goals and reviewing progress

Setting goals gives your freelance work direction and helps you measure progress. Start with a clear objective, like launching your business or completing a specific type of project.

Review your goals regularly by asking:

• Is the work enjoyable and fulfilling?
• Is it generating enough profit for the time invested?
• Am I attracting the clients and projects I want?
• What needs to change if freelancing isn't delivering the results I expected?

Start your freelancing journey with Xero

Launching a freelance career takes planning, persistence, and the right tools. From tracking expenses to sending professional invoices, managing your finances well sets you up for long-term success.

Xero accounting software helps freelancers stay organised, get paid faster, and keep on top of taxes, so you can focus on the work you love. Get one month free and see how easy freelance finances can be.

FAQs on freelancing

Common questions about starting your freelance career.

Can I freelance with no experience?

Yes, you can freelance with no experience. Start by identifying a skill you want to develop, then build expertise through courses, personal projects, or volunteer work. In-demand freelance roles include copywriting, graphic design, accounting, bookkeeping, web design, coding, and digital marketing.

Which freelancing is best for beginners?

Beginners can start freelancing by identifying a marketable skill, setting competitive rates, and building a portfolio of relevant work. Create profiles on freelance platforms, market your services through social media, and apply for beginner-friendly projects to gain experience.

How much can I realistically earn as a freelancer?

In the beginning, it's wise to focus on building your portfolio rather than maximising income. Early earnings can be modest, but as you gain experience and testimonials, you can command higher rates. Your income potential depends entirely on your skill, niche, and marketing efforts.

How do freelancers get paid?

Freelancers typically get paid via bank transfer, PayPal, or other secure payment portals. Some clients may prefer cheques or platform-specific payment systems.

You control your payment terms. Decide whether to charge per project or on a retainer basis, when to send invoices, and when payment is due. Include these terms in your client contract to avoid confusion.

How do I accept freelance payments?

Accept freelance payments through bank transfers, PayPal, or payment processing tools built into your invoicing software. Xero lets you add a "Pay now" button to invoices, making it easier for clients to pay quickly.

Is freelancing a good career?

Yes, freelancing can be a good career. Many freelancers earn more than employed workers, enjoy schedule flexibility, and have greater control over their work-life balance. However, income isn't guaranteed, and success requires consistent effort, strong self-discipline, and effective client management.