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How to go From Freelancer to Business Owner

September 30, 2019
234   |   6   |  

There’s nothing more rewarding in life than working for yourself. Not having to answer to frustrating managers or demanding supervisors is its rewards, and for many, it’s like living a dream. That’s why working as an independent provider or freelancer has become a primary career goal for millions of people around the world. However, many of us are deterred from kicking off our freelance lifestyle by the technical aspects of running a business.

As an independent provider, you took years building a marketable skill. If you decide to start your own business, the idea of doing all of the billable work as well as managing every detail of running a company can be intimidating. Fortunately, however, there are lots of people who can help you along the way.

 

Setting Up Your Company – Getting Off on the Right Foot

As an independent provider, you are entirely responsible for all aspects of setting up and running your company. This can be daunting to some individuals. However, they can take solace in the fact that there are plenty of financial and legal professionals out there to help freelancers get off on the right foot.

For example, a fitness trainer may decide to transition from a freelancer to an LLC for tax purposes. If so, he or she may choose to file their own formal paperwork, or use an online service provider to process and file the articles of organization and develop an operating agreement. But regardless of whether you go at it alone, the first step in starting your new business is the same: file the proper paperwork with the Secretary of State in your jurisdiction.

If you want help with the forms, you can hire a legal or financial advisor to help you avoid making any filing mistakes. More often than not, freelancers organize their business as a limited liability company (LLC): a business structure that allows for single-member ownership and pass-through income from the business to its members. As an independent provider, having financial or legal professionals in your network is very helpful. This is not only true when you’re starting your company, as you may want advice later on about business matters or decide to make the transition to a different corporate form.

Having a registered business can protect you from personal liability and help you save money on taxes and insurance. And of course, a registered business gives you that shine of professionalism and brand legitimacy. These are valuable when looking for clients or developing partnerships.

 

Getting Your First Client

Being a freelancer offers a lot of benefits, but job security and income are not guaranteed. Instead, we generate opportunities for ourselves by going out into the world and finding clients. Websites that help you find clients are often an important way freelancers and independent providers build their initial client base. This is critical to not only fund their growing business but also to help them attain a certain level of financial security and peace of mind.

For example, if the previously-mentioned fitness trainer was having a hard time locating new clients, she has the option of being listed on a website like Beepoly. On the site, she can sign up as an independent provider and specify her trade and location. The site would then connect her with potential clients in her area looking for the exact services she offers. Websites like Beepoly are a hugely beneficial resource to freelancers. The hardest part about working for yourself can be networking and getting your name out there, and these websites can do a lot to help in that regard.

 

Taxes, Insurance, and Other Expenses

Until they can build their business substantially, freelancers do not have the luxury of paid days off or other employment benefits like health insurance. Therefore, an independent provider has to find an insurance carrier and cover the cost of their insurance themselves. This is a concern for a large proportion of independent providers and freelancers because individual health coverage plans can be quite expensive. If getting coverage as a new business owner is a challenge for you, there are government websites that can help you find and purchase health insurance.

In addition to health coverage, most businesses purchase general liability insurance. This insurance protects individual business owners from legal or financial liability if someone gets hurt or property gets damaged in the course of their business. For people in certain businesses – such as home-based care or beauty industries - this can be particularly important.

In addition to insurance, there are a lot of expenses independent providers may have to cover that a traditional employee would not. You’ll need to budget for the cost of supplies and equipment. For example, an individual employed by a cleaning service would be provided with cleaning supplies and any necessary equipment to get the job done. In contrast, a freelance house cleaning service provider would need to supply all of the cleaning equipment and any other materials he or she may need to get the job done.

 

Investing in Good Help Always Pays Off

There’s an old saying that you have to spend money to make money. Although this may seem costly, freelancers and independent providers save a boat-load of money during tax season. This is because they can deduct any business-related expenses, including business cards, business phones, promotional material, transportation, cost of employing extra freelancers, materials, equipment, and travel expenses related to business.

Freelancers working from a home office also have the advantage of being able to deduct the value of the space. As long as you keep records of these expenditures, you can save quite a bit of money during tax season. However, making errors could raise flags and bring an auditor to your doorstep in no time flat.

Anyone you hire to help you with your business – regardless of whether they’re a freelancer or an employee – can be a great investment in your financial future. The cost is deductible, and they can help your business make money or save on expenses in the long-run.

As a result, job placement sites like Beepoly, are crucial to sustaining the ever-growing demographic of freelancers and independent providers. They work for the business community by connecting them to the clients and service providers they need, which is exactly what start-up businesses need to grow.

 

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