What is freelancing? A beginner’s guide

What is freelancing? A beginner’s guide

What is freelancing? How can you get started? And what should you consider before transitioning to freelancing? We explain.

What is freelancing? A beginner’s guide

What is freelancing? A beginner’s guide

What is freelancing? How can you get started? And what should you consider before transitioning to freelancing? We explain.

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Written by
Webflow Team

Working as a freelancer means you take on projects and clients independently as opposed to taking a position with a single employer.

Freelancing has been on the rise since 2014. However, the pandemic ushered in a significant spike of freelance workers, bringing the number of freelancers in the United States to 59 million in 2020. Experts predict that freelancers will make up over half of the workforce by 2027.

Many people turn to freelancing so they can have a flexible schedule and be their own boss. According to the Gallup State of the Workplace Report, over 50% of employees would leave their existing positions to gain these benefits.

So how does one get started in their freelancing career?

What is freelancing?

Freelancing means that instead of working for one employer for a salary or hourly rate, you work with clients independently, selecting which clients and projects you work on and setting your own rates.

An independent contractor works within a limited scope, whether it’s a particular project or a specific type of work. These independent contractors are also self-employed, according to the IRS.

However, a self-employed person is not necessarily the same as an independent contractor. For example, an artist selling products online with no contracts with any other entity would not be considered an independent contractor or freelancer. Independent contractors are contracted by a person or company to complete agreed-upon work.

Getting started as a freelancer

Whether you want to make extra money with side hustles or segue your skills into a full-time job, you need a plan. Keep in mind that you’re not just responsible for your work schedule, but also for employment-related taxes and Social Security.

And when you’re first starting out, it can be difficult to replace a full-time job’s income because you’ll have to build up your client list. Make sure you have a plan for handling the leaner months when you are ramping up. Many freelancers start by taking on smaller projects and doing part-time work before transitioning into full-time freelance work.

Set up your freelance business website

More than half of businesses are comfortable tapping into the freelance economy for outsourcing projects — but they have to find you first. You can think of your freelance business website as your billboard. It showcases your work to potential clients.

Many contractors turn to freelance websites such as Upwork and Freelancer to browse listings for freelance jobs. Others use job boards like Indeed to land gigs.

However, a personal site gives you the freedom to highlight your best work. It informs potential clients about the skills you offer. And you don’t have to be a professional web designer to build a site — there are plenty of great portfolio website templates.

Plus, when you have your own website, you can drive traffic directly to your portfolio. Read through our SEO guide to learn how to get your website to show up in organic search results.

Determine how you will bill for your freelance work

Setting up a billing system to track your income and monitor cash flow is vital. Some months will be busier (and higher earning) than others, so mapping out when money should be coming in will help you prepare.

You can use a simple spreadsheet if you work part time or only take the occasional side hustle. Online sites such as PayPal and Venmo can handle the invoicing side of the business. These options allow you to do your billing as an independent worker. They also carry name recognition and can protect you from fraudulent transactions.

If your workload demands something more robust, QuickBooks Self-Employed is an excellent choice that will also tackle bookkeeping and the tax side of your business. Once you’re established as a self-employed worker, you must file quarterly tax estimates. This software can make this task infinitely easier for you.

Creating a business entity isn’t a must, but there are several advantages to keeping your personal and business financial affairs separate. The obvious reason is to protect your money and assets from lawsuits or claims against your business. Plus, it might make doing your taxes simpler.

The missing guide to the freelance designer's life is here

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The missing guide to the freelance designer's life is here

Learn everything you need to know about making the leap to freelancing, from how to find clients to how to price your services.

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Additional considerations for freelance work

Being self-employed carries additional responsibilities that go beyond billing and getting paid. Some companies will request a W2 from you, but even if they don’t, you’ll need a 1099-NEC from any client you bill for more than $600 a year.

Often, new freelancers make the mistake of not setting aside funds for taxes. As a freelancer, you’ll need to make estimated payments each quarter that cover your employment taxes. Otherwise, when tax season rolls around, you’ll be hit with big bills and even penalties for not paying your estimated taxes throughout the year.

The taxes that freelancers must pay include:

  • Income tax (currently 15.3% for 2020)
  • Self-employment tax (FICA, Social Security, and Medicare)

Many freelancers use automatic deductions to set aside the money from their pay before they receive the net amount. The advantage of going this route is that you’re less likely to tap into the money you’ve designated for taxes.

Another way you can save money on taxes is to keep track of your business-related expenses. That can include things such as education, certification, office supplies, and internet access. If you use a dedicated area in your home for your work, you can deduct a percentage of your living expenses. Bear in mind that it must be your sole use of the space to qualify.

Many freelancers work with a dedicated accountant to keep track of estimated payments and deductions.

Health insurance

Health insurance is the top perk that employees look for in a job, with over 60% willing to leave their current position to get it. But freelancers are responsible for finding and paying for their own health insurance.

You can apply through the individual Health Insurance Marketplace. Another option is to check out sites such as the Freelancers Union for coverage in your area. We strongly urge you to determine this cost before you dive into freelancing full time so that you can price your products or services adequately to meet your expenses.

Work schedule

The next consideration is how much time you want to devote to freelancing and whether you want it to be your main source of income. Flexibility is the key to answering this question. It’s also one of the primary reasons that people choose freelance work. It can fit many lifestyles, whether you’re a caregiver, single parent, or individual who prefers a quieter working environment.

Less than 40% of freelancers work full time on a daily basis. Many opt to take on jobs weekly, biweekly, or even monthly. In these cases, it’s an option to supplement your income without the risks of giving up a traditional position.

However, it’s essential to put this decision in context. Most freelancers rely on previous clients or word of mouth to get short-term gigs. That’s possible if you make yourself available. It’s also vital for developing your skill set.

Many individuals work in creative jobs, such as web or graphic design. This type of work requires practice. It’s also imperative to build your portfolio and get reviews or testimonials to attract clients. Over 90% of consumers are more likely to patronize a business if others have positive things to say about it.

Perks of freelancing

Considering both the pros and cons of freelancing can help you decide how it can fit into your lifestyle. Flexibility is indeed a perk when it comes to work-life balance because you can set your own hours. If you have an established skill set, you can take on work whenever you need some extra cash. That can make you more financially independent and better able to save.

Working freelance also helps you develop soft skills, such as getting organized, handling project management, and communicating effectively. Being in charge has its perks, too. As an independent contractor, you can decide which clients and projects you’d like to take on.

Downsides of freelancing

As romantic as freelancing sounds, it also has its downsides. We’ve already discussed health insurance, which can set you back quite a bit. There’s also no paid time off or sick days. There isn’t the same job security you’d have with a 9-to-5 job, either. The COVID-19 pandemic has proved challenging for the gig economy, with one-third of freelancers reporting decreased hours.

Then, you have to consider getting jobs and getting paid for the work you do. However, these things are often less of an issue with experience.

Types of freelance work to consider

If you’re interested in freelancing, you have several avenues that you can explore. The top fields of gigs for freelance workers are:

  • Creative services, such as graphic and web design
  • Consulting and professional services, like social media management and SEO specialists
  • Freelance writing or content services, such as ghostwriting, editing, and copywriting
  • Technical services, like web development and software development

However, that only scratches the surface of the opportunities. Think about what you’d like to specialize in and then design your portfolio to cater to that audience.

Promote yourself as a freelancer with a great website

Promoting yourself is a must-do for any freelancer, whether you work online or not. More than ever, people rely on the internet to help them make informed decisions about what businesses they should use.

Webflow has you covered with plenty of portfolio templates to get you started. You can quickly create your freelancer site and open the door to fulfilling work that makes optimal use of your time and skill set.

Last Updated
December 6, 2021