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14 Essentials Any Freelance Business Needs

Wednesday, May 3, 2017 by

online tools for freelancers

Deciding to go freelance is a big decision, but it’s not as daunting as it used to be. Today, about a third of US workers are freelancers or independent contractors, and they’ve blazed a clear trail for everyone comes along after them. If you’re considering going full-on freelance, here are some tools and apps to make the transition and your new line of work easier.

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1. Your business license

Business licensing requirements for freelancers vary by location and by industry. You might only need a Home Occupation Permit or a DBA permit for a sole proprietorship. However, if your city zoning code or homeowners’ association has strict rules about home-based businesses, make sure you understand the guidelines to avoid possible fines later on.

 

2. Your employer identification number

You can apply for a free Employer Identification Number (EIN) in just a few minutes at the IRS website. Most freelancers aren’t required to have an EIN, but there are advantages to having one. You can use your EIN instead of your Social Security number on W9 forms and other client documents to protect against identity theft. Banks and credit unions will want to see an EIN before you open a business account.

 

3. Your business bank account

A business bank account makes bookkeeping and taxes easier. It also makes it easy to set aside money for your quarterly estimated income tax payments (more on that below) so you don’t accidentally spend it and get hit with late-payment penalties.

 

4. Your 1040-ES package

Most freelancers and independent contractors pay quarterly income tax instead of only paying in April. You can use this worksheet to determine how much you’ll pay. Remember that you’ll need to adjust the estimated payment amount each year, based on your previous year’s income.

 

5. Your business insurance

Most freelancers work as sole proprietors, which means you assume unlimited liability for your business debts, including any judgments against you. Odds are you’ll never face a lawsuit, but if you do, you definitely don’t want to lose all your assets. Talk to your insurance agent about professional liability coverage or contact the Freelancers Union, a national group based in New York that offers insurance for members. The Freelancers Union is also a good source for long-term disability insurance coverage, which many insurers don’t extend to freelancers.

 

6. Your client list

Your client list should contain the email addresses, personal information, and contact preferences of your current and previous clients. Use your list to keep those connections warm a few times a year and to send out holiday cards or thank-you gifts to your best clients.

When you’re starting out, your list may be small or even nonexistent, but you’ll want a way to manage it as it grows. Some freelancers use the same customer relationship management (CRM) tools that businesses use for customer lifecycle tracking, because they’re so useful. Hubspot CRM is a popular free option for freelancers and small businesses. You can integrate it with your email to track conversations, see details about your contacts, and make notes of where they are in the customer cycle: lead, prospect, client, etc.

 

7. Your time-management tools

When you’re a freelancer, time is money. To stay on top of your assignments, due dates, marketing efforts, and interviews, you’ll need a to-do list, an appointment reminder tool, and time-tracking software.

For to-do lists, I like GoodToDo, an inexpensive paid service that integrates with email, lets you sort to-dos into categories, rolls over undone list items to the next day, and lets you create recurring to-do items.

Google Calendar is invaluable for sending conference-call and phone-interview invitations and reminders to sources, clients, and yourself, to keep projects on track.

Time-tracking software is a must if you bill by the hour and helpful even if you don’t. That’s because over time you can see a clear picture of how much time you spend on each client’s projects and get a sense of your “hourly wage” on flat-rate projects. TopTracker is a free option designed just for freelancers that’s been recommended in Entrepreneur.

 

8. Your web hosting service

You need a business website so customers can find you, see your portfolio, read your client testimonials, and contact you at the professional email address you’ll create for your business. Your site hosting service should have reliable uptime, good customer service, and templates to make your site look professional without the expense of hiring a designer. Not surprisingly, we’d suggest HostGator.

 

9. Your connectivity

Your business internet and mobile service should be as reliable as possible. Shop around to find the options with the best speed, least downtime, and broadest coverage so you can work uninterrupted.

 

10. Your job sites

Not all freelancers are fans of job sites, but those who are tend to recommend Upwork and Contently. These platforms connect clients who have high-paying gigs with freelancers who want them, so they’re worth looking into as part of your overall marketing strategy.

 

11. Your contracts

As a freelancer, you need a contract to use with clients, to define everyone’s expectations, responsibilities, rights, and payment terms. You can use DIY templates from services like RocketLawyer and LawDepot, but it’s always smart to have a trusted attorney review your contract before you use it.

 

12. Your accounting and invoicing software

Lots of fellow freelancers tell me they use FreshBooks for their bookkeeping, project recording, and invoice creation. It also has time-tracking functions that PC Magazine calls “exceptional.”

 

13. Your printing service

Online services like Vistaprint offer professionally printed business cards at budget prices, especially if you’re willing to wait a couple of weeks for delivery.

 

14. Your professional connections

The most successful freelancers view their fellow freelancers as colleagues, not competitors.

Get to know your local and national freelancer groups to build your peer network, learn more about the business of freelancing, exchange gig leads, and find mentors. You’ll also want to connect with industry veterans and experts in your field. For example, if you write about web design trends for trade publications, you should cultivate relationships with designers and follow the thought leaders in the web design field so you can pitch new projects and find sources easily.

Getting started as a freelancer is definitely work, but the rewards can be worth it: a work schedule you control, projects you enjoy, and a network of clients and colleagues you like and learn from. What are your best tips for new freelancers?

Casey Kelly-Barton is an Austin-based freelancer who enjoys writing about business development and marketing, e-commerce payments and fraud prevention, and travel.
One Comment
  • arielle
    15 May 2017 at 12:22 pm

    Hey Casey! Awesome articles and tools. As a freelancer myself, I’ve been on the lookout for apps that can handle most of these in one shot, so I don’t have to have too many apps and feel unorganized. I found AND CO, an app that handles my invoices, time tracking, expense tracking, etc. all in one. Thought it might help you out too:)

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