The Skills Necessary to Administer a Freelance Business
Photo credit: Kumar Appaiah/Flickr
When you first start out as a freelancer, your most important skills are those creative abilities that you can directly transform in paid work. Nothing else is as important as landing work and completing it, unless you don’t happen to need food and a place to live. But there is a point for every freelancer where business skills become more important. You’re a freelancer. That means you’re a business owner (at least according to the laws of most countries). That means that you need to keep your books up to date and pay your taxes. It also means that having some decent business skills are necessary if you want to grow your business over time. Not only does a good freelancer have better-than-average creative skills, she needs a bit of accounting, a smattering of contract law, a dash of operations and plenty of marketing.
What Great Business Skills Mean for a Freelance Business
The difference between a new freelancer and one who’s been at the game for a little while is whether the business runs smoothly. Can you get your invoices out on time? Do you have an established contract — and know what problems to look for if a client wants to use his own contract? Those sorts of details are signs that your business is humming along smoothly. They are also a sign that you can keep the time you spend on administering your business to a minimum and focus on getting bigger and better client projects. But knowing your business means that you’re able to look at the big picture when you want to grow. If you have great records about your business, you can analyze what types of projects earn you the most money, decide where sub-contracting can help you out, decide if taking on a partner makes sense or even branch out into other types of work. There are plenty of opportunities for freelancers to earn great incomes, but grabbing those opportunities requires some business savvy.
Getting Those Business Skills
Unfortunately, the way that many freelancers pick up the necessary business skills is by learning through less-than-pleasant experiences. Think about how many freelancers work without a contract — until a client stiffs them and they have no recourse. While a bad experience tends to make knowledge stick, there are better ways to acquire the business skills that will help you move forward.
- Find a mentor: Find a freelancer who has a thriving business and seems to have everything together. Just ask to follow that person through their business administration a couple of times — watch how they send out invoices, look at when they buy new equipment and so on — and ask a lot of questions. For some freelancers, that’s enough to get your business in gear.
- Take some classes: If you learn best in a classroom environment, head over to your local community college. Such schools generally offer inexpensive business classes and will let you easily take the occasional class without pursuing a full degree. Some even offer a few business courses as part of their adult education system.
- Read up on business: The fact that you’re reading this blog is a good sign — you can get a ton of information about running your freelance business online. I’d recommend picking up a couple of more in-depth resources as your business evolves. Bookkeeping has always been a tough point for me, but I bought a book on it and got myself up to speed.
- Hire help: If you’ve got enough work to keep you busy around the clock and a level of income where you can afford it, you can hire someone to take care of the business stuff for you. A good bookkeeper can do a large portion of your business administration tasks (although it’s a good idea to know what’s going on so that you don’t wind up with a bad bookkeeper).
The important thing is getting your skills up to speed. Without them, you may find yourself on the tough end of a conversation with the IRS or simply unable to take on bigger projects for your client. Neither will make it easy to keep increasing your rates as a freelancer. Photo credit: Kumar Appaiah on Flickr
Great read! Another is the fast-track learning skill not just to catch up deadlines but to absorb the fast-growing media.
The mug reminds of my birthday present to my boss, only I printed the site’s main image all around it..
Thursday– great post! Many of us do forget how important it is to maintain professionalism and quality client service, while delivering kick-ass creative service.
Here’s an interesting article I found that lists tools for helping you maintain productivity.
http://www.observingpolarity.com/technology/tools-we-use/
Hi Thursday – great post!
John from FreshBooks here. It’s a shame there are not more resources like Freelance Switch, especially for hard business skills. Hiring someone, or a really good accountant can help.
What’s also lacking is investment/saving advice. Freelancer’s retire right? All investments strategy is written about for regularly salaried employees… not the more irregular revenue of a freelancer.
Enjoyed this enough to leave a comment. Time to find a mentor!
Good point on reading up about business. It’s not enough to be *in* business. You must also be a student *of* business.
Love the term “Free Lance” because “self-employed” sounds so mundane. One important thing free lancers should not forget is to keep records of expenses and revenue so that accurate tax filing submissions will be filed with the authorities, if you know what I mean. Your favorite accounting and tax filing program should help you with this.
I just wanted to know how to start my freelance business and operate it. I don’t really know where to begin and how to handle clients, can you write an article about that next time?
Great article! I’m just starting out and trying to figure out the business part of all of this myself. Love Freshbooks BTW John.
But does anyone know any good resources for help writing contracts? Any good templates anywhere? Thanks!
Good useful post.
I still can’t believe there are freelancers out there that don’t use a contract. If you don’t use a contract, you’re just asking to be screwed in the end. Get a PEG’s book and learn how to write a contract, then use it. If a client doesn’t want to sign your contract, just walk away. Don’t be desperate for the job and not have a signed contract in place. If so….again, you’re asking to be screwed.
Nope. Don’t wanna get screwed!
Stacy, what is a PEG book? I googled that but didn’t come up with anything. Also, how do you handle remote clients? Do you fax it to get them to sign, or is there a good digital option I’m not aware of? Thanks!!!
Thursday, when students/clients ask me how much time I spend actually writing articles, I tell them 15% — and they’re shocked. I actually wrote a blog post on it called “The Other 85%”: http://www.therenegadewriter.com/2008/09/29/the-other-85/. In short, I spend 85% of my time on:
generating ideas
marketing
researching
interviewing
editing
revising
writing query letters
doing administrative tasks
Freelancers have to be good at ALL of these tasks! If you’re a good writer (or designer, or whatever), that will get you partway there, but without those other skills you’re sunk.
I agree with the comment above. Too many designers / writers launch out to start their own freelance businesses because they are great at their craft, but what gives them longevity in the market is the ability to do the common business things well.
They get business because they are a good designer/writer, etc… but they lose business because they are not professional, bad at sales, have bad system, etc. Great article.
Thanks for the post. These are good to start freelancing. You need learn many different skills to continue the work.
Enjoyed this enough to leave a comment
Time to find a mentor!
Why is it so many freelance writers, such as Thursday Bram here, simply rewrite the same article again and again.
Just google ‘important freelance skills’ or something similar, and you’ll get hundreds of same state-the-obvious article, all written in the same patronising manner, assuming that the concepts of ‘organisation’ and ‘time management’ are alien to anyone who has only ever worked a ‘regular’ job.
The skills a person needs in order to successfully self manage a business are the same skills that they need in order to pay their bills on time and remember to put the bins out on the right day. Its not rocket science.