Years ago when I started my own small business, I’d bristle when someone said, “So you’re a freelancer?”
At the time, the idea of being a freelancer — someone without a full-time, paying position — seemed a pretty negative way to be described.
That certainly has changed.
Now, a third of the American workforce are freelancers or independent contractors, according to a study that the Freelancers Union and Elance-oDesk commissioned. That’s 53 million Americans who get all or some of their income from temporary or project-based work.
That number is likely to increase: A 2010 study from Intuit projects that by 2020, 40% of Americans will be freelancers.
Although I never called myself a freelancer, I preferred the term “consultant,” for more than a decade I was a self-employed sole proprietor. Along the way, I picked up a number of tips on how to be successful when you have to earn your living without a regular paycheck:
1. Change your mindset. Consider yourself “in business” rather than just looking for gigs or working from one job to another.
When you’re in business, you’re never really between gigs even when you don’t have work. You can be marketing, networking and improving your skills.
Yes, you can set your hours and take time off, but mostly you should be dedicated to building your business.
2. Plan. Think through the nature of your products or services, who your target market is, how best to reach them and what gives you a competitive advantage.
Develop a business plan for your independent business.
3. Look for recurring revenue. You’ll sleep better at night and be better able to pay your rent if you have sources of income you can count on month after month.
Work hard to land some clients who can give you ongoing work even if you have to charge a bit less.
4. Specialize. I advise virtually all small businesses to focus on a specialized, or niche, market as a way to differentiate yourself, land more clients and charge higher prices.
The easiest type of specialization? Target a specific industry.
Do you build websites? You’ve got thousands of competitors. But specialize in building websites for dentists, and you’ll stand out.
5. List yourself on specialized freelancer sites. When you list yourself on general freelancer sites, you compete with thousands of global competitors, mostly on price.
Instead, look for sites specializing in particular skills or industries. For example, we’ve hired copy editors and an indexer from Editcetera, a website for the publishing industry.
6. Become a power user of social media. Social media can help you reach a highly targeted market.
If you offer business-to-business services, be active on LinkedIn and Facebook in many instances. Consumer products and services? Facebook and Pinterest. Home improvement? Houzz.
7. Treat your enterprise as a business. Set up an accounting program and keep good records. Send out your invoices on time every month.
Have a separate business bank account.
8. Save. One thing is for sure when you’re self-employed, income can be a roller coaster — climbing high one month, only to plunge terrifyingly low the next.
It’s tempting to spend money when you have it, but you’ll be glad if you have some money in reserve.
9. Cooperate with your competitors. Make friends with others with whom you can work on jobs that are too big for one of you alone.
A bonus: These competitors can send you work when they are too busy.
10. Get a website. Whatever line of work you’re in, a website makes you look more professional.
If you’re in a creative field, include some examples of your work.
11. Create a database of clients. Consider those who hire you as “clients” instead of employers and nurture those relationships.
Use a customer relationship management system to keep track of all your clients, prospects, referral sources. Stay in touch with them regularly.
Finally, avoid isolation. As a freelancer, you probably work at home most — if not all — of the time.
That can make you lonely and burned out.
So get out there. Join networking groups; socializing is good for business, too.
Make friends with other freelancers. Even work on your laptop in a coffee shop.
I’m betting plenty of other freelancers will be working there, too.