Whether you've already gone freelance or are considering making the switch, there's a lot you need to know and do in order to succeed. You already know how to do your job and produce great work, but here are 21 things you need to know about running your own business.
Let's be honest, there are a lot more than 21 things you should know about running your own business but you've got to start somewhere. I'm going to talk about the things that took me blood sweat tears and time to learn on my own. I want to give you a massive head start on getting control of your business, income, and lifestyle through freelancing. If you're not a web designer or developer like me don't worry, these will apply to you as well.
There's four areas where you can make a serious impact on your business right away: your website, getting leads, happiness, and the money.
Buy Your Website
You read that right: "buy" your website. Get a template. Use another designer’s work to represent yourself. To a web designer that probably sounds blasphemous, but when you’re launching your new business you need to be thinking like a business owner.
As a designer, you think that you should show off by creating a custom, unique, beautiful design for your own website. You want to spend a month pouring over every detail of your site to create something the world has never seen before. The truth is that this would be a massive waste of your time. Creating a website that lives up to your high standards is a big undertaking and all it’s going to do right now is pull your attention away from other critical tasks for your business.
The truth is that designing your own website from scratch would be a massive waste of your time.
All you need when you’re starting out is a moderately attractive website where you can convince potential customers that you’re a real business and they should hire you. You can do that with a $17 template and an afternoon of writing content. The important part at this stage isn't the design of your site, it's what your site has to say.
Talk About the Customer
Your website's job is to turn leads into customers, and this is done through the content on the screen. Absolutely the largest mistake that companies of any industry make on their website is only talking about themselves. You aren't selling a product or a widget that you need to describe in stunning detail. Hell, you're not even selling your services. You're selling a solution to a problem. If you want to connect with a lead, start by talking about them.
A lead is on your website to figure out if you can help them solve their business problem. It's much more effective to talk about the problem they’re having than to talk about things that don’t apply to them, like your education or how clean your HTML is.If your great design skills are going to help them get customers, talk about how good websites get customers and bad ones don’t. Take the time to find and reference the research that matters to the customer as if that were your job...because it is. (Hint: you’ll probably find some of that info in other articles in this blog.)
Only Show Your Best
If you’re an old agency pro finally going freelance you’ve probably got a library of work to put in your portfolio, but if you’re just starting out you’ll need to think a bit about what you want to show on your website. Things like your school art portfolio or a photo of your degree aren’t going to impress people into hiring you. If your body of work consists of logos you designed for your friend's bands leave the portfolio off your website for now. It’s better to have no portfolio than a bad portfolio. You’ll get work to show off soon enough.
Start with a Case Study
Once you've completed work for your first client, you can use the results of that work as a case study on your website. A single case study of an actual job is going to be more powerful than a portfolio full of work that’s unrelated to your business.This approach is going to be an effective way to land more clients through your website, but it does mean that you need to get your first client first. Let's talk about that.
There’s a lot of advice on the internet on how to get your first client, but you should start with your existing network. Talk to your family and friends to find out if the place is that they work needs a website. Talk to your local Chamber of Commerce and find out if you could attend one of their meetings or give a presentation. (You may need to become a member in order to do that and if there's a fee involved I would wait.) You could also talk to any past employers as long as you still have a good relationship with them. Small businesses and family-owned stores are the types of clients that you're going to have the best results with if you're just starting out.
Small businesses and family-owned stores are the types of clients that you're going to have the best results with if you're just starting out.
Have Business Cards
While you shouldn't spend a lot of time on your website, you definitely do want to have business cards; particularly if you're going to be networking in person.This is another area where you don't want to spend a great deal of time or money. You can find a suitable business card template online for just a few dollars which you can use with an inexpensive printing service. Make sure your name, phone number, email address, and website are all on the card. Order a small batch and try to give them all away. Sometimes a friend of a friend, your favorite coffee shop, or the owner of the pet store you buy from needs your services. Get over your shyness and just ask, "how do you like your website?"
Know your Audience
As you’re networking and meeting people it's important to consider what type of business you want to do work with. If you're just getting experience in the industry, small businesses with small projects (and likely small budgets) are probably the type of customers that are looking for you. If you're fresh out of college with little work experience, a company like Coca-Cola is probably not your target audience. When you network to find your first customers, be sure you’re networking where you're likely to find your audience.
Know your Skills
When you're looking for your first few paying customers it's tempting to take on work that's outside of what you are in business to do. You want to build websites but somebody needs help with an issue on their computer and are willing to pay you to fix it. Don’t do it. Politely pass on that job in order to spend more time networking and finding a client that needs the services you're in business to provide. If you do decide to take that job on in order to pay your bills, make sure that client knows this isn’t what your business does and you're doing this as a personal (paid) favor. You don't want them recommending you to other customers for the same work you don't want.
Have a Sales Plan
When you've identified the places where you can find your potential customers, it's important to have a plan on how to get them on board. It can be a struggle to land a client on the first meeting. Chances are that they'll want some time to research you by looking at your website or talking to people in your portfolio before they decide to do business with you. They may also want to have more than one interaction with you - either via email phone or in person - before they're willing to give you money. This is why it's important to have a sales plan. What are the steps or phases that a lead goes through before you've satisfied all of their curiosity and questions and concerns and they're ready to do business with you? The more you can plan this process the easier it will be for you to repeat it, and make improvements over time. The better your sales plan, the more likely you are to land any lead that comes your way. Spend some time working on your sales plan.
Be in Charge
It’s going to be a bit of a role change going from being an employee or a student to being your own boss. You’re now in charge of the relationship with your client, as well as the work. Be prepared to stand up for your business and the way you want to work. Don’t give in to unreasonable deadlines, working for free, or work that doesn’t match your skills. In the end, the client will appreciate that you declined to do a poor job at something that you weren’t trained for rather than pay you for substandard work. Remember, you’re not an employee; you don't work for them you work for yourself. Be in charge.
Be Comfortable Hearing No
As you’re networking and meeting potential clients you're going to hear a lot of “no”s. Get comfortable being rejected. There's an endless number of reasons why a business might not be ready to hire you right now. Sometimes it has to do with their budget, with their future plans, or they might just think it's not a good fit. Believe me, you'd rather walk away from a bad fit then force it on your business and have a miserable time. Getting a “no” is part of the gig. Move on to the next great opportunity.
If you got a “no” but thought the opportunity was a particularly good fit you can reach out to them via email or phone and asked if there was anything you could have done better to get their business. This can sometimes be a little bit daunting, but if you're able to get candid feedback from this leads you can find out how to do a better job landing the job next time.
Often the thing that determines how happy you and your client are at the end of a project is communication during the project.
Often the thing that determines how happy you and your client are at the end of a project is communication during the project. Since your customers aren't experts in what you do - that's why they hired you after all - they'll need some education. Be sure to stay in regular contact with the customer as you're working on their project.
As a designer it's okay if you don't solicit detailed feedback from the client on the design; after all deciding on the design is your job. However, it's important to keep your customers apprised of your progress and any issues that you've run into which may change their delivery date or final costs. Understand that the smaller the client’s business, the more likely they are to want hands-on input into your work. It's up to you how much of that you'll allow.
Have an Agreement
As a web designer or a developer, you'll be working with a lot of information and you and your client need to have a clear understanding and agreement on how that work is going to proceed. it's also important that the client understands how you do business. What happens if there's a disagreement? What happens if the client asks you to use materials that are rights managed? Who's responsible for clearing the rights for that material? Who is liable if the right to work clear? How does your payment plan work? Is the deposit refundable? When is final payment due? All of these things should be spelled out very clearly in your agreement document and signed by your clients before work begins. I've always preferred to walk through this document with my clients either over the phone or in person rather than mailing it to them and assuming that they read it. This document alone saves hours of headaches and conflict later in the project.
Agree on “Done” Up Front
It will depend on how you're doing billing, but if you're doing a fixed-bid project where the full price of the project is agreed upon before work begins make sure that you and the client both understand the definition of “done” for this project. There's nothing more frustrating than a client who keeps adding work to your schedule when you know you can't ask for more money for that work. You’ve probably heard this called “scope creep”.
There's really two things you can do about scope creep on a fixed-bid project. One is to tell the client that this work is outside the scope of your original estimate or bid (which only works if you've got a document that agrees on what “done” means) and that the additional work will cost extra. Two is to just tell them “no”, which never goes over very well. In either case, if you want any credibility you’ll need to have a document that you've both agreed to before the project started that clearly indicates the scope of work that you are doing for the price that you quoted. As long as the customer understood the scope of what you quoted up front, you’ll get through those uncomfortable conversations without too much issue.
While we’re on the topic of “done”, don’t release your work to the client until the final payment is received. If they don’t pay you fully, they don’t get the results of your work. Don’t spring that on them the day before launch either; be sure they understand that policy of yours before you begin.
Join a Group of Positive People
One of the best things you can do as a freelancer or small agency owner is to surround yourself with like-minded, positive, supportive people. Find yourself a local networking group. Check Meetup.com or your local Chamber of Commerce and join a group of your peers. Facebook is a particularly good place to find these groups. Keep in mind though that networking has a time and a place; having Facebook all open all day is a great way to not get anything done for your clients.
Surrounding yourself with helpful positive people is a really excellent way to learn new skills, network, and deal with the solitude of being a freelancer.
Ask Questions of Your Peers
Sure, happy hour with the group is great, but the real purpose of networking is to learn and find support. Be sure to ask people in the group for advice on topics that you're struggling with. Who do you use as your accountant? What do you do with troublesome clients? How do I make sure my clients are happy? The people in the group will have a lot of different experiences and sometimes quite a bit more experience in an area than you have. Listen to what they say, and decide what's best for your business. Be gracious and grateful. Help back when you can.
Record Every Purchase
If you're lucky, someone in your family is an accountant. If you're like most of us, you're on your own when it comes to the financials of your business. After freelancing for many years the very best advice I can give you is to record every single business purchase you make. Software, computers, business lunches, gasoline for traveling to networking events or seminars, classes or tickets to conferences, downloads, stock photography, every little thing that you purchase for your business should be recorded. There are a lot of great choices for business financial software, but even if you're using a spreadsheet or a pen and paper, write everything down. You'll need that information when it's time to check how your business is performing and pay your taxes.
Hire an Accountant
There’s a lot of things you need to know in order to run your business, but chances are you’re only skilled at a few of them. Some of the things you’ll learn as you go, some you can take training on, and the rest you want to hire an expert to do for you. One of these things is accounting. Don’t try to learn how to navigate tax laws by yourself; find a local accountant with a great reputation and engage their services for your business.
Don't Discount or Work for Free
If you don't have a lot of experience, it’s common to think that you need to discount your prices in order to land work. Never do this. (In fact, you're probably not charging enough to begin with but that’s a different conversation.) Once you tell a customer a rate for your work, stick to it. That doesn’t mean you can’t be flexible.
Don’t lower your rates, but do negotiate costs.
If the customer wants to lower the cost of the project in order to fit their budget, let them know they can do so by requesting fewer features. For example, if you're offering to build them a picture gallery that they can edit themselves let them know that they can reduce the cost of the project by eliminating that gallery feature. Removing features makes the project shorter for you, so you can move on to other work that clients are also paying full price for. Besides, chances are they'll either pay what you’re asking or return to you after the project is finished to have that gallery added.
Remember too that sometimes a client might not be opposed to the overall price, they’re just unable to pay your price right now. As long as you’re able to pay your bills you may agree to let them pay in installments. All of these are negotiation options to land you the work at the right price and make the client happy with the way you do business.
Don’t lower your rates, but do negotiate costs. Negotiation is good, fair business. Lowering your rates is a quick way to end up back as an employee for someone else.
Raise Your Prices
You shouldn’t discount your rate once you reveal it to the client, but when you bring on a new client don't be afraid to change your prices upward from time to time. If this new client was a referral from a previous client, they may know what your previous rates were. If that's the case it's alright to tell them that your rates have changed. If you’re networking with other people in your industry and your local area it's, okay to discuss pricing with them to see what your competition charges and where your rates lie.
Take a Deposit
Regardless of whether you're doing hourly, fixed-bid, or value pricing it's important to take a deposit before you start any work. Not only does this ensure that your customer is serious about working with you, it’s also an indication that they have the funds to pay you. Whether the deposit is 25%, 50%, or a fixed dollar amount make sure that you take a deposit before you do anything for their project. If they won't agree to a deposit, walk away. That’s not a customer that you want to work with.
Bit of a shameless pitch here, but join newsletters like mine (below). There are a lot of great people out there willing to give help and advice away for free, or for just your email address. It doesn't matter if they're marketing a product or not. If the advice is high quality and makes you consider a way to improve your business that you hadn't thought of then it's worth your email address and a few minutes of reading every day.
Besides, you might actually love the product they're selling after all.