The Ultimate Guide for Freelancers and Small Businesses That Hire Them

The Ultimate Guide for Freelancers and Small Businesses That Hire Them

Looking at the numbers, there can be no doubt that the “gig economy“, the robust marketplace of freelancers, is alive and well. In fact, one recent report shows that one in three Americans is a freelancer:

  • Nearly 54 million Americans participated in some form of independent work in 2015, an increase of 700,000 workers over the previous year; and
  • About 1 in 12 U.S. households — more than 10 million people — rely on independent work for more than half of their income.

These days, entire functional areas, such as customer service, are staffed wholesale with remote freelancers and the rising demand in areas like logistics have opened new markets for freelancers where none existed before.

Yep, it’s a good time for both freelancers and the small businesses that hire them:

  • Freelancers gain the freedom and income they desire, while
  • Small businesses gain the financial flexibility to grow and shrink their staff as needs require.

A Guide for Freelancers and Small Businesses That Hire Them

As with any quickly evolving business model, there are a lot of moving parts, both for the freelancer and those that hire them. This guide will help you stay on top of the freelancing phenomenon whether you need to know:

  • How to work as a freelancer;
  • How to work with a freelancer; or
  • Where to find freelance work or hire freelancers.

How to Work as a Freelancer

Whether you have a freelance business up and running or are just starting to dream, these tips will come in handy.

Am I a Freelancer?

Before you launch your freelance business, you need to decide if you are a freelancer, consultant or entrepreneur. This is not just a question of semantics:

Susan Reid breaks down these three words that many small business owners toss around. “Are you a freelancer delivering a specific set of services or a consultant providing expert advice? Or are you an entrepreneur creating a business that could be sold one day, if you chose to?”

If the answer is, “Freelancer” then you’re in the right place.

Are My Skills in Demand?

It may seem obvious, but if your skills are not in demand, your freelancing business will be in trouble from day one. Wondering if your skill will pay the bills? Here’s the latest report on top freelance skills in demand:

The Ultimate Guide for Freelancers and Small Businesses That Hire Them - In Demand Freelance Skills

Don’t see your skills on the list? No worries! This list is just the tip of the iceberg as far as the many, many skills small businesses hire freelancers for. To discover if your skills are in demand, do some research over on the freelance job sites to see how many listings you can fulfill. If the number if high, then you’ll be okay.

Do You Need to Incorporate?

It costs money to incorporate your freelancing business however, it may eventually cost more if you don’t. Carefully weigh the pros and cons and make the decision based on your needs and threshold for risk.

Do You Need to Register Your Business in Another State?

Many freelancers work with clients that are scattered across the US and even around the world. Though there might be instances where you should register your business elsewhere, if you primarily work remotely, there’s likely no need.

Where Should I Work Everyday?

While some cities are more conducive to freelancers than others, you don’t need to move to one to start your business. In fact, you don’t even need to have a home base at all, an attractive perk to freelancers who like to roam.

Many freelancers work out of their home, but that can get lonely. If you enjoy working around others, consider a co-working space. Beyond company during the workday, these services offer many things such as conference areas and learning opportunities that can help advance your business.

Can’t find a co-working space near you? Consider using a service such as Weleet that connects freelancers for co-working opportunities.

How Much Should I Charge?

Setting a price for your freelancing services is always a balance between what you would like to make and what the market will pay. To kick start your pricing process, use these 23 tips for setting your rate as a freelancer.

How Do I Get Paid?

As a freelancer, you want to spend as much of your time as possible working and as little of your time chasing after clients to get paid.

The best way to avoid that scenario is to set up a process for invoicing and payment. In addition, consider both free and premium solutions and apps that make it as easy as possible for clients to pay you.

What About Health Insurance?

Freelancers are responsible for finding and buying their own health insurance policies. Don’t just find and forget or you may be in for unwelcome surprises.

How to Work With a Freelancer

These days, hiring a freelancer can be done both more easily and more quickly than ever before. Read on for some useful tips on working with one.

Should You Hire a Freelancer?

Hiring a freelancer takes both flexibility and trust. If you’re not sure you’re ready, or if a freelancer is necessary, use this checklist to walk through the decision.

What Should You Know Before Hiring a Freelancer?

While a freelancer is not an employee with all the incumbent costs and responsibilities, there are some issues you should keep in mind to assure you stay compliant with state and federal rules and regulations.

You may also want to check into whether you need to, or should, assure that your worker’s compensation policy covers freelancers.

In addition, you should discuss the rules around 1099s with your accountant to assure you stay in compliance with tax law.

Finally, consider protecting yourself and your business with a contract.

How Do You Work with a Freelancer Day-to-Day and Project-to-Project?

When you fist bring a freelancer on board, you want to assure that they know what to do right away. To create a process, consider these tips for onboarding a freelancer.

Day-to-day, you need to manage your freelancer much the same way as an employee. Here are some tips for doing so, both for all freelancers and for tech freelancers in general.

Both before and after a project consider these rules to follow and learn from each freelancing experience so that the next one is even better.

Where to Find Freelance Work or Hire Freelancers

To begin with, here are 10 websites where you may be able to find your next freelancer — or your next freelance job.

And here are more online guides where your next gig as a freelancer or your next freelance recruitment may be found.

Freelancer Photo via Shutterstock 6 Comments ▼

Matt Mansfield Matt Mansfield is the Tech Editor and SEO Manager at Small Business Trends where he is responsible for directing and writing many of the site’s product reviews, technology how-to’s, and lists of small business resources as well as increasing the reach of our content.

6 Reactions
  1. Solid guide with lots of resources. Great post Matt.

  2. Matt, this is a thorough piece you’ve written. It’s almost like a detailed table of contents for how freelancers can fill the gaps within different areas of their business. I think a lot of folks start freelancing because at face value it seems like a relatively simple process — there’s a lot more minutiae to account for than you’d think, especially when you start making a real income.

    Quick questions for you —

    One of the primary goals of my site is to help freelancers realize that if they’re skilled enough to make it as a freelancer in whatever creative sector they’re operating in, odds are they have the talent/knowledge to begin building their own non-client-dependent businesses. A great example of this would be the freelance writer who still hasn’t written that novel yet (all writers have this in the back of their mind!), or the programmer who freelances but hasn’t put his or her mind to coding their “killer app.”

    What’s your take on this notion? Can freelancers successfully segue into creating their own products? What advice would you have for them?

    • Eli,

      I believe that some freelancers can successfully segue into creating their own products while others are happier building their clientele and satisfying customers.

      Everyone is different and one very important aspect of freelancing is figuring out what you want from it and understanding that your viewpoint may change or stay the same.

      So yes, some can make the transition, others are less interested in the option.

  3. Aside from providing services that are in demand, it is also important to think if you can differentiate yourself with the competition. This will allow you to charge higher and get more high paying clients.

  4. You should check out the “guide to your independence” for additional materials. It was published as a guide to freelancing.

  5. “Welcome to your Independence” for the name of the book above. Not “Guide”…

No, Thank You