By Team GigaCover with additional reporting by Kenneth Koh.
So you have decided to take the career path less travelled by becoming a freelancer. You know you have the skills and knowledge to help your clients. Surely this is the path to freedom and work-life balance?
But hold on. Before you go about promoting yourself and your business with a loud hailer (just kidding, please avoid doing so especially in public spaces), you might first want to solidify your internal business processes.
Today, we share 5 areas of focus that you need to establish while setting up your Freelancing business.
Identify your product/service’s unique selling point
Successful freelancers compete on value, not price.
Select a domain where your strengths and weakness lie, and focus on differentiating that particular aspect from other businesses in the same market. By investing the time required to discover and ascertain a profitable niche for your freelance business, you’re securing a particular industry and type of client that values quality over price. Once you’ve made yourself invaluable within your niche and are confident in charging a higher premium for your product/service, you’ll have a platform by which you can expand your freelance business in any direction you’d like in the future. You’ll be competing on value, not price.
Identify your target clients
Being specific about your target client might be a difficult feat in the initial stages, especially when you are prone to the urge of accepting any business opportunity that comes your way.
However, narrowing in on target clients that you know you can meet their needs best will help you achieve more optimal results in the long run. Every work you commit to – especially when you have a very limited amount of free time – needs to point back to your ability to deliver the highest quality results for your clients. There is no point accepting every arrangement proposed by every client that comes your way, if you end up producing deliverables that are of sub-par standard.
Your goal is to harness a good reputation and eventually be seen as the go-to resource for your target client group. Trust in your best work, once you have accumulated a substantial pool of testimonials from clients that love your work, the momentum will pick up from there. Your target clients and correlating portfolio pieces will represent how you are perceived by other potential clients moving forward.
Set your business structure
Selecting an appropriate business structure has long-term repercussions, and should definitely well thought through from the start of your freelance journey. You will need to research the taxation process, your personal liability protection, and the regulations that have a direct and indirect impact on your business.
To offer some context, many freelancers may choose to adopt sole proprietorship , where a business is owned by a single owner and there are no corporate taxes involved. You may also wish to register your business as a corporation (an independent legal entity that is separate from the people who own, control and manage it) or a limited liability company (the company’s members cannot be personally held liable for the company’s debts or liabilities).
Set your pricing structure
While sites like Fiverr and Upwork already have countless options for low-priced freelancers, remember that you aim to compete on value, not price. Once you have gotten your business’ value proposition settled, it’s time to move on to your pricing structure.
One of the easiest way to price your product/service, is by valuing it against the number of working hours spent on an average work piece.
a. Dissect each project into different parts, and define the length of time it will take you to complete each part.
This is a scope breakdown, and it should take into account potential revision cycles on top of the completion of the original tasks.
b. Sum the total number of hours you spend on each part and multiply by your hourly rate.
As a freelancer, you can change your hourly rate within a range based on the specific tasks involved.
While a scope breakdown is usually a safe estimate, it might work better for you to base it on the average time it would for someone with similar skills instead. For example, If you happen to be an efficient digital marketer who is able to complete a project in 50 percent less time than your competitors, you shouldn’t charge 50 percent less just because you take less time on a project that delivers the same quality of results.
Draft an effective Official Contract
After you and your client have come to an agreement on the terms that a project entails, the next step you should be prepared to execute immediately is crafting a contract that encapsulates your terms as a statement-of-work. It is extremely important that you write a whole-encompassing contract agreement, as it serves as a safety net to protect, build trust and manage expectations between you and your client.
Singapore Legal Advice dishes out great advice as to how to draft an effective service agreement. There are many freelance contract templates out there, such as this freelance service agreement template that you may use to construct your own. Once you have built a solid contract, this will serve as a template for all future contracts you out to various clients, with just tweaks to the terms and conditions applied.
Now that you’ve settled your internal business processes, it’s time to attract your new potential clients! Look out for our next post, where we dish out advice on how to attract a flow of clients through building your online presence as a freelancer.
This article was originally published on Gigacover‘s official Blog. Gigacover provides freelancers in Singapore a suite of super-flexible and affordable insurance, all tailor-made for them. Find out more about their offerings here.