Maximizing Your Freelance Earnings: 5 Proven Tips

Table of Contents

Planning
Taxes
Bookkeeping
Payment
Communications
One More Thing

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Many individuals embark on freelancing to supplement their income or to tap into their creative abilities. However, some soon realize that what began as a side hustle has the potential to become a fulfilling full-time career. Transitioning your part-time freelancing into a thriving full-time venture offers numerous advantages, including enhanced flexibility and the chance for increased earnings.

Despite these enticing benefits, the shift from a side project to a full-scale business can be daunting, necessitating meticulous planning and precise execution. In this blog post, we will share five essential tips that can guide you in transforming your freelancing endeavors into a sustainable source of full-time income. Whether you’re motivated by financial goals or a desire to unleash your creative prowess, these strategies will provide the roadmap to make your dream a reality.

According to tp the Bureau of Labor Statistics (BLS), 10.1% of total U.S. employment was self-employed as of January 2023. You know the saying, “If you can’t find a job, create one”. If you’re a creative freelancer who dabbles on nights, weekends, and in your spare time just to make some extra money, this can be the time to up your game and make your freelance career your full-time career. Turning your part-time freelancing into a full-time business can be complicated, but it can be the most satisfying job you’ll ever have.

Planning

Being a full-time freelancer may seem like a day filled with doing whatever you want whenever you want, but you’ll actually have to be more disciplined than you ever were working for someone else. If you don’t have to punch a clock and there’s no one to tell you what to do, what’s to stop you from taking the afternoon off to go to the beach? The fact is, if you don’t work, you don’t make money, so getting organized and working is your only option.

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Schedule your day like any other workday, with tasks and a schedule/calendar, and keep your focus on the job. Try some tools to help you build and plan (see Trello) your business (see Fizzle and the Pomodoro Technique) to help keep your focus if your mind tends to wander.

Taxes

Independent businesses operate under a distinct tax structure compared to traditional employees, encompassing obligations such as paying their own Social Security and Medicare taxes. Navigating this landscape might seem complex, so your best course of action would likely be to consult a professional accountant who can clarify all the details. Essentially, you’ll need to reserve funds to cover the taxes that your employer once handled. The IRS accommodates quarterly tax payments based on your projected annual income, and a wide variety of expenses can be claimed as income deductions. By understanding and properly managing these unique financial responsibilities, you can ensure compliance and optimal financial planning for your independent business venture.

Bookkeeping

The odds are pretty good that you’re not an expert business accountant, so keeping track of your income and expenses can be a confusing concept. This is important when it comes to claiming the right income at tax time, knowing when to raise your prices, and figuring out where the money is going. Instead of taking courses in accounting, it’s much easier to find a program online. Find accounting software that fits in with your knowledge, and use it daily to keep your business on track. There are many options, such as QuickBooks and FreshBooks.

Payment

Gone are the days of receiving payment for services through checks. In today’s digital world, online payment systems deliver funds instantly, utilizing virtual currency that you might never physically see. Among online payment platforms, PayPal reigns supreme, with a presence that spans the globe and acceptance in nearly every online business. If you wish to diversify payment options for your clients, numerous alternatives to PayPal operate on a similar principle. From well-known fintech solutions to traditional financial institutions, most now offer some form of online payment, providing convenience and flexibility in the ever-evolving digital marketplace.

Here are some of the most popular options:

Direct bank transfer: You can provide clients with your bank account details and receive payments directly into your account.
PayPal: A widely-used payment platform that allows you to receive payments from clients around the world. You can link your PayPal account to your bank account for easy transfer of funds.
Stripe: Another payment platform that enables you to receive payments directly from clients. Stripe charges a fee for every transaction processed.
Credit card: You can accept payments from clients via credit card using a payment processor like PayPal, Stripe, or Square.
Check: Some clients may prefer to pay you via check, which you can deposit into your bank account.
Cryptocurrency: If you and your client both prefer to use cryptocurrency, you can accept payment in Bitcoin, Ethereum, or other digital currencies.
Payment apps: There are several payment apps, such as Venmo and Cash App, that allow you to receive payments from clients.

It’s important to consider the pros and cons of each payment option and choose the one that works best for you and your clients.
Social Media

Even if your freelance business is not web-based, leveraging social media is key to any successful business. Set up your own domain/website as a start. Create social media accounts for your business (keep these separate from your personal social media sites) including (but not limited to) LinkedIn, Facebook, Twitter, Pinterest, etc. Consider advertising on one or more of these platforms and ensure that your profile is clear in terms of the products and services you offer.

Communications

You will want to create a business email address that is separate from your personal email address and it makes the most sense to leverage the same domain that you use for your website. Your email address should be something that is easy to remember, such as [email protected]. Your hosting company should have tools for this or consider having Google manage your email accounts.

One More Thing

At some point in their career, many people consider taking their careers in a freelance direction. There are pros and cons to doing so, but it’s the freedom of doing the work you want that attracts so many. If you’re thinking about launching a freelance career, you likely already know that it’s not going to be easy. It takes a lot of hard work to build an independent career, where it’s up to you to find the work you need to keep going. Before you decide to go freelance, you need to come up with a plan to decide how you’re going to do things. If you need to finance your new startup business, ensure you pick a reputable lender.