Updated: Apr 7, 2021
Guest article by Lance Cody-Valdez, Free Lance Now
Are you ready to take your freelancing work and turn it into a small business? What are the things you need to consider when transforming your workflow? Let’s take a look at some things you need to think about (e.g., where you’re going to do your work and what financial goals you need to have) when making the leap from freelancer to small-business owner:
1. Consult an accountant.
Before doing anything, make sure you call your accountant. And if you don’t have an accountant, get one! Finding a good accountant can be a challenge for a small business just starting out, but having someone on hand who has knowledge of how to file taxes, create budgets, and plan for future tax years.
2. Consider forming an LLC.
When it comes time to turn your self-owned freelance operation into a small business, you have a few legal options. You can either declare your company as a sole proprietorship or a limited liability corporation (LLC). There are benefits of both, but forming an LLC provides tax advantages and management flexibility that you may not get from the former. Forming an LLC will also protect you, a private citizen, from any debts the business incurs if something bad were to happen, such as if the business were sued.
3. Write a business plan.
You may already have one of these if you have been seriously full-time freelancing for a while. If you don’t, you will need to create one of these — or revise your current one — so that you can get your ducks in a row when it comes to your business goals. Having a well-thought-out business plan could help you get a loan in the future and, in the meantime, help you stay organized. Include things like your financial goals, the clients you want to keep, and how you’re going to grow the business.
4. Have the right environment.
When you take your freelancing work to small-business territory, you may be able to continue working from home and run the business out of your own office. Working from home comes with its own set of challenges, such as distractions and motivation issues when the kitchen is just a few steps away. However, if you have the willpower, working from home is a great way to get started.
Otherwise, one alternative you should consider is a coworking space where you go to an actual office setup to do your work. Coworking allows you to network (safely), work in a new and optimum environment, and create structure in your workday that may be just out of reach at home.
5. Get your books right.
One of the most important parts of doing freelance work is making sure you get paid — and on time at that. As you transition to a small business mindset, don’t lose sight of that important tenet. To ensure you are being properly and appropriately compensated for your work, use an online invoice template that’s easy to customize and prepare. If you opt for a printable invoice template, you can select your format of choice and tailor to your purposes. Make sure you include any pertinent business specifics (e.g., your contact info and logo), billing and late fee details, and a quick note thanking your customers.
Make sure you send invoices and not bills — the devil lies in the details of what is included in one versus the other. Bills are generally just a designation of money owed, but an invoice includes details about both parties and an itemized list of services rendered.
Get started now.
Do you want to get out of your home office and create your own working sanctuary that will allow you to meet savvy professionals, get work done, and separate home and business? The coworking spaces at The Back Office Studio are committed to your safety and productivity. Check out the membership options available.
Photo Credit: Cotton Bro, Pexels