Making money on the side has completely changed my life. Last year, I earned $30,000 outside of my full-time day job. That is more money than many people earn in a year, and I did it on evenings and weekends. The only thing that makes me special is my work ethic. Any smart person can do exactly what I do if they put their mind to it. Here is my ultimate guide to get started with freelancing.
The Freelance Economy
The way we work is changing. While most of us still go into an office or physical location to do our work, technology is letting us work like never before.
When I had air conditioning installed at my house a few weeks ago, I was able to work from home to be there while the work was done. In August, I’ll work remotely for a day in Chicago so I can be in town for a weekend event. My boss prefers we go into the office most days, but when we are sick or need to be home, it works.
At the same time we are able to work from nearly anywhere in the world, or at least anywhere within a few time zones, the world is shrinking and people want more independence. I once had a boss who had spent over 40 years working for the same company. His pension was well earned to pay for his retirement, but outside of the government and a few union protected industries, pensions are a thing of the past.
As company loyalty wanes and location and schedule independence become more important priorities, work is slowly beginning to adapt. People are finding contract and freelance positions to fill very specific company needs, and companies are coming around to paying freelancers to do a task rather than to through the expense and commitment of bringing on a full-time worker.
We are at the dawn of a freelance revolution, and the massive wave of change is just beginning. If you want to pick up a few dollars on the side, or work your way towards a full-time freelance lifestyle, read on for the strategy and specific steps I took to turn a small hobby into a nearly full-time income.
Picking a Skill
If you are going to freelance, you need to start by deciding what type of work you are going to do. This can be related to your existing education and career, or take you a completely different direction based on your skills or passion.
My freelance work came out of my passion for blogging and personal finance. I have both an undergraduate degree and MBA in finance, and when I left a job working as a bank manager, it was a natural fit for me to start a blog on the topic.
I am a very thrifty guy, so I was determined to learn and do everything myself. I have grown my business to a point where I have hired freelancers myself, but when I started, I wanted to do it all. So I figured it out.
Going back to my very old posts, you can see that I was not always a great writer churning out detailed guides like this. I have written hundreds of shitty blog posts. But like with nearly anything in life, practice makes a big difference. My writing has improved dramatically, and continues to do so with nearly every page I write.
At the same time, I was building my own websites. I made the mistake of starting with the free platform Blogger, but quickly came around and moved to WordPress. Moving a blog from Blogger to WordPress is not simple, and it took me hours of reading, trying, and doing to move my site. It took me hours more to fix all of the mistakes I made along the way. Lucky for me, I had multiple blogs on the Blogger platform, and I was able to go through the steps several times. I was a self-taught Blogger to WordPress migration expert, a skill that would come in handy later on.
When I moved to self-hosted WordPress, I had more to learn than just moving my posts and pictures. I learned how hosting accounts work. I learned how CPanel works. I learned what Apache is and why it is important for websites. I learned how to edit and customize my own website theme, and picked up HTML, CSS, and PHP coding languages along the way.
This practice, trial and error, and do-it-myself attitude put me in a perfect position to do freelance writing, WordPress design, and WordPress development. I never went through formal training for either, but I developed the skills that others did not have, needed, and were willing to pay for: the trifecta to begin a freelance business.
Of course, writing and
Hone Your Abilities
So, now you’ve picked what you are going to do. Great job! Don’t get too attached, as it might not work out. Always have a plan B. But you picked plan A for a reason, so it’s time to get really, really good at it.
When I began freelance writing, it was not until I had written many hundreds of blog posts. I may not have needed to wait quite that long if I had planned on freelance writing from the start, but it made me even more qualified when it came time to start writing for clients.
According to the book Outliers by Malcom Gladwell, it takes 10,000 hours to become a true expert at something. You don’t need to spend 10,000 hours practicing to become a freelancer, but it is important to understand that it takes more than a few hours to become an expert. Be ready to invest time, effort, and maybe even money into your chosen skill to become a successful freelancer.
For web design, I probably built at least a dozen websites and re-designed them another two or three times each. Every time, I learned something new. Every time I ran into a problem I didn’t know the answer to, Google was there to help me figure it out.
I didn’t charge much or take on many projects at that point. But as I did start to bring on clients, I realized I needed more education to deliver a quality product I could stand behind. I took online courses, notably a detailed and lengthy course on designing websites with HTML5 and CSS3 before I started to land jobs over $500. Since that time, I have had jobs well over $2,000.
At the same time, I have turned down jobs that I might have been able to charge more than $2,000 for because even with the skills I have and the time I have invested, I was not sure I could deliver a stellar result. If I can’t deliver something amazing, I don’t take the job. Reputation and past work quality mean a lot to your freelance business as you try to grow.
Practice with Friends and Family
Once you think you’re ready to take on your first client, give yourself a test drive. I took on some pro-bono projects for friends and family to work out the kinks in my process and find out if I had more to learn before I started taking on paying clients.
To test out my freelance writing, I wrote guest blog posts on other sites in the same niche. This had two benefits. First, it helped me market myself and my site. Guest posting is a great way to get the word out about what you are doing, as long as your posts are high quality. When I was applying to my first writing gigs, I used those guest posts as an example of my work quality that they could count on.
For website design, things came together a little differently. I was not actively trying to become a freelance web developer. Friends were coming to me for help building their sites, and I happily shared my talents with them to help them succeed in their own projects. It started with Blogger to WordPress moves. Then I started helping people build new sites from scratch. Along the way, I participated in a community forum at a finance blogger network called the Yakezie, and regularly offered tips and advice for design and development questions. Eventually, people asked if they could hire me. I am a big fan of earning money, so I readily said yes.
If you don’t know anyone looking for someone with your skills, get out there and offer to do a couple of free jobs. Not too many, but enough to know you can handle the job when it comes. When I began my short lived DJ career, I began by playing at a fraternity party, friend’s house and backyard shindigs, and a few public events and parties for groups I knew could use a DJ. Before I knew it, some paid gigs started rolling in.
Find Client #1 and Earn Your First Dollar
Once you’ve done enough test runs that you’re comfortable charging, it is time to stop with the free work. Never give away what you should be getting paid for unless it is for a non-profit cause you believe in. I built a few non-profit websites without charging for causes I was involved with and believe in. For other non-profits, I sometimes offer a discount, but don’t work for free. Their staff doesn’t work for free, and neither should you.
I found my first freelance job through public job boards and online searching. When I started with paid writing for sites other than my own, there were easy ways to jump on a listing, claim a job, and get paid a few bucks. I wrote a ton of articles for Demand Media, the site behind several large “content farms” including eHow, where most of my writing lived. I was thrilled to make the flat $10 per article or an ongoing royalty for each article published.
While Demand Studios is still around, I would not start here anymore. I would start with your own blog to build up a writing portfolio along with a few guest posts, as mentioned above. Once you are ready, you’ll have to work hard to market yourself to find your first client. Another great place to get matched with a client is Cloudpeeps if you are great at social media, blogging, and online marketing.
If you’ve been doing free projects for friends and family, it is time to start charging. Unless you are doing a quid-pro-quo barter, make them start paying up for your time and effort.
Marketing yourself is one of the hardest parts of freelance work. Once you have a good list of clients, it is easy to ignore, as you don’t get any direct income from marketing. You can spend hours with no results, or you can spend a few minutes and land an amazing client. You never know, but if you are new or looking to expand, marketing is a must.
You can start by listing yourself on major freelance work sites like UpWork. I find UpWork to be awesome for hiring freelancers, but it is very competitive when applying for jobs. Build a top notch profile, take a couple of relevant tests, and respond very quickly if you want a chance to be hired for a job. Remember, you are competing with international workers, so you have to compete with them on rate as well as skill.
I have also done well marketing myself within specific communities. Many of my first clients came from the Yakezie, as I mentioned above. As the personal finance blogging community has grown and shifted, I’ve followed to new Facebook groups and forums where I can connect with potential clients as a resident expert.
Once you have a good client base, you will get occasional referrals. Always work hard to impress every single client, as you never know who they might send your way. I did a small project for a blogger friend once, and that friend has sent over a few very valuable clients.
Build a Portfolio
As you finish client projects, be sure to ask for a couple of sentences you can use for a public recommendation on your website, ask for an honest rating if they found you through a job board site like UpWork or Elance, and gather relevant images for an online portfolio.
I’ll admit that my portfolio is quite a bit out of date, but it has not harmed my ability to find new clients. You can see my online portfolio here.
There is no right or wrong way to create a portfolio for your work. I have purposefully left out some projects where I met client expectations, but I did not find the end product particularly bragging worthy. I make a point to showcase and feature my very best projects as examples of what I can do if you bring me on board.
For writers, a list of links to your best blog posts or your author page on client sites works well. For photography, you’ll want to use photos. For web design, snapshots work well, but avoid direct links to the site as the client may make changes after you finish up. No matter what industry you work in, the more quality images you can include, the better.
Raise Your Rates
If you are brand new, don’t get ahead of yourself and start turning down low paying jobs just yet, but after you build up a full client load that meets your goals, it is time to start raising your rates.
Over the years I have been freelancing, my rates have steadily crept up from $10 per post to the $100-$300 per post range. This was very deliberate and planned. If you think your work is only worth $20, that’s what you’ll make. However, if you position yourself as an expert and leader in your field, there is no limit to what you can charge.
I raise my rates by cycling in new clients at higher rates. Sometimes you lose a client due to higher rates, other times you lose them because the project ended or it was just time for one of you to move on. That’s okay, and a great opportunity to bring in someone new at a higher rate. I never take on new clients below my current floor rate I set for myself, and periodically adjust.
Raising your rates on current, recurring clients can be more difficult. Some freelancers, like my friend Miranda Marquit, suggest raising your rates by a reasonable percentage on an annual basis, and communicating that up front, but remaining loyal to good clients who give consistent work that you enjoy.
I have a couple of writing clients below my floor rate by quite a bit, but I have not raised the rate on them because the posts they require are relatively easy to put together and my hourly rate is still compelling enough to keep going.
When I have raised rates in the past, I used an email like this one (actual client communication with revealing details removed). Feel free to customize and use for your own clients in the future:
My business has grown over the past year. I’ve loved working with you, and over the months I’ve learned a lot about your goals and process while writing for WEBSITE NAME.
My rates have increased as the year rolled along, but because of our great relationship, I’ve kept you at your original rate. However, as of the new year, your current rate will be below my floor. Going forward, I am looking to raise my rate to $XXX per post, still a discount to what I charge for new clients. Would that work for your budget?
I appreciate your business and look forward to our continued relationship. Please let me know if you have any questions about my new rates.
When I sent this email to a client, he happily kept me on at the new rate. In the years since, my rate has more than quadrupled from what I started charging this client. About a year after this message, we decided to part ways, but new clients have come on that happily paid quite a bit more.
Go Full-time, Maybe
As your business grows and your rates increase, you might find yourself tempted with the “should I do this full-time” question. In many cases, the answer is a resounding yes. I have over a dozen friends who have turned their freelance hobby into a full-time income. However, there are lots of risks that go with full-time freelancing.
When I see friends like Stephanie Halligan of The Empowered Dollar and Melanie Lockert of Dear Debt (also a former Personal Profitability writer) leaving their old career for the freedom of freelancing, I am very tempted to follow suit.
There are tons of benefits of full-time freelancing. Here are a few that top my list:
- Set your own hours
- Location independence
- Diverse income streams – you don’t lose your entire income if you lose a job
- Do a job you love
- Do several types of work to keep things interesting
But, there’s also the downsides. Big ones. Here are benefits of working for a full-time employer rather than going the full-time freelancer route:
- Steady income
- Retirement account matching
- Health insurance
- Paid vacation
When you are a full-time freelancers, all of that falls to you. You create your income. You create your retirement account. You buy your own health insurance, which is now much easier thanks to Obamacare. You do not really get vacation as a freelancer. You just have days you don’t make any money.
As you can tell from reading this, I did not go full-time, though I have seriously considered it. I once did go full-time for a month, and it was amazing.
Am Not Am a Full-Time Freelancer (In April, 2016, I went full time)
I think about going full-time on occasion to this day. When I have been in jobs I was not happy with, I thought about it every day. These days, it is not a big consideration for me.
I have a job I really do enjoy. I wish I could work at home a bit more often, but I like going into the office and interacting with my co-workers. I like knowing that every 15th and 30th I will get a nice direct deposit into my account. I like the social aspects of working for a big company, and I have been successful getting raises and promotions sprinkled along the way. I now make more than double what I did in my first year out of college in 2007 not including side income.
Most importantly, I have a wonderful wife and a daughter on the way. We are fortunate to be in a situation where my wife can work on our businesses and will be able to stay home with our family. This is all thanks to the day job. My side income is great money to have, but would not pay for our current standard of living on its own.
Last year, I did have a bad day where I lost my old job. I didn’t look on the situation with despair. I had a huge emergency fund saved and was bringing in a steady side income. In the month I had away from full-time employment, my side income doubled. I have been able to hold that income level most months since despite losing the 8-10 hours a day I spend in the office.
I left the meeting where I lost my job excited about a new career as a freelancer. It was just about a month after the high of World Domination Summit in Portland, where I was inspired by people’s amazing stories of entrepreneurship and passion. I was ready to jump on board.
But just a few hours after getting home from that fateful meeting, I got a fateful email from a recruiter via LinkedIn. That email led to a meeting, which led to an interview, which led to the job I have today. I was brought into a great company by a great manager, and I am very happy with the decision I made.
Without this job, I would not have my house that I bought last November, among other things. Sure, there was a big opportunity cost to what could have been, but I’m happy with my decision for the time being, and the foreseeable future.
Life is good, and that’s what freelancing is all about.
This post was originally published on July 13, 2015 and updated on April 22, 2019.