Become A Freelance Business Owner In 7 Effective Steps

freelance business

Freelancing in your spare time is a great way to earn extra cash, make network connections, build out your portfolio, and gain experience. But what if you could turn your freelance side gig into a full-time freelance business?

In this article, we’ll provide you with a quick overview of exactly what it takes to go from a freelance hustle to a legit business and deliver tips from freelancers who did just that. Let’s get started!

Leveling Up: From Side Hustle to Freelance Business

For some freelancers, the transition from side hustle to full-time business is a natural step in their careers. 

But others may struggle with self-doubt and the decision to take the big step toward becoming a business. And frankly, you may never feel completely ready to take that leap of faith. So, how do you know if it’s time to take your business to the next level?

Here are some questions that help freelancers decide if they are ready to transition to a business model or not:

  • Have you found your freelance niche?
  • Do you have returning or long-term clients?
  • How many hours are you working weekly (full-time job + freelance work), and how many hours do you want to work?
  • Are you more fulfilled by your freelance work than your day job?
  • What do your finances look like? Can you sustain yourself and your business for a couple of months if needed?

Asking yourself these questions should help you determine if you feel ready to move forward with a full-time freelance business or if you need to give yourself more time.

And once you decide to take your freelance work to the next level, you can follow the steps below to establish a legit business.

1. Conduct Local Market Research

Before making any major decisions or changes to your current setup, start by conducting local market research. This is an essential step for any freelancer as it gives you an in-depth view of your niche’s market. Gathering market research helps you determine:

  • Competitors and how to differentiate your business 
  • Demand for your services
  • Industry trends
  • Target audience segments
  • Pricing structure and service rates are based on industry averages, location, demand, and experience.

With this information, you’ll better understand how your freelance business will perform in the existing market and if you are pricing your services competitively. Market research also helps you identify new areas for investment and gaps in current offerings. So, you can craft an even better service and maybe even provide valuable add-ons.

2. Get Legal and Financial Advice

It goes without saying that there are many aspects to running a business. Freelancers with minimal experience in business management may find that establishing a business is challenging and overwhelming. For this reason, it’s worth investing in both legal and financial advice. This way, you understand the full scope of options available and all business-related requirements. 

Consider discussing the following topics with respective experts:

  • Business bank account and why it matters
  • Client contracts and forms for protection
  • Necessary trademarks and patents
  • Business legal structures and tax requirements 
  • Retirement plans
  • Company and personal insurance 
  • Business license and permit types, and so on.

3. Legitimize Your Business

Once you’ve received professional advice and done your research, it’s time to legitimize your freelance business. 

This step starts with determining your business name and brand identity, including logo, color scheme, font, brand voice, etc. Take time to settle on a name and identity that fits your unique services. Create something that is memorable to clients to help differentiate yourself from others in your market. 

Next, get a business license. This allows you to claim deductions at tax time that you can’t claim with your personal finances. Typically, freelance businesses set up their business as a DBA or sole proprietorship. But there are other options available, including LLCs or continuing as an independent contractor. If you’re unsure of which license or permits you need, contact your legal advisor or talk with your local Small Business Development Center (SBDC) or SCORE mentor.

Finally, set up a separate business bank account (if applicable to your needs). It’s typically a good idea for every small business as it helps you track your income and expenses, avoid mistakes with taxes, and manage cash flow easier. And, in the worst-case scenario, if your business account gets shut down, your personal finances remain accessible. 

4. Set Up Business Communication

When taking your freelance operation to the next level, setting up business communication channels is essential. This not only helps to separate your personal life from your business venture, but also works as another way to build your brand’s credibility and professional image. On top of that, it gives clients and prospects official ways to communicate with your brand.

Start by setting up a dedicated business email. You can simply sign up for a general address with any public email provider. Or, you can purchase a customized email for a fee. This way, you can display your business or domain name after the “@” symbol. 

Another important communication method for companies is a dedicated business phone number. It would help to sign up with a provider that also offers call forwarding services, which enable you to direct all incoming calls to your personal device. This means you don’t need an office or expensive equipment to receive business calls. And with these services, you can even display your business number instead of the default caller ID. So, you know when you’re receiving a personal call vs a business one.

Don’t forget to display your business communication options on your website or social media, so customers can easily find and use these methods when needed. 

5. Establish Your Online Presence

Establishing your online presence is essential to a successful freelance business. In fact, it’s so critical that many freelancers have a website whether they are pursuing a full-time business or not. If you don’t have yours set up yet, don’t panic. You don’t need anything complex or fancy; simply set up a website showcasing your services and portfolio. 

Here are some things to consider acquiring or including when establishing your online presence:

  • Domain extensions (you can even select a more distinguishable extension like .sbs to help you stand out from other services)
  • Browsable portfolio full of examples of past work
  • Social proof such as client testimonials, reviews, or case studies
  • Service pricing and breakdowns
  • Clickable social media (if applicable) icons
  • Business contact information 

freelance business

6. Develop Your Brand

It’s no secret that building your brand’s visibility takes time. But once you’ve legitimized and established your online presence as a freelance business, you can start working towards increasing awareness right away. Dom Kent, Founder of UC Marketing, suggests, “Work on your personal brand so people associate you with your skill and your industry.” 

Let’s look at two tried and tested ways to market and grow your brand online:

  • Make Connections

Networking is a great way to connect with both like-minded professionals and potential clients. 

Consider where other freelancers or relevant industry leaders hang out online, such as social media platforms like LinkedIn, as well as industry or skill-specific communities such as Superpath for content writers. These connections help you find support, information, opportunities, and an overall productive network for your business. You can even build symbiotic relationships through this approach, resulting in collaborations that increase brand awareness and drive conversions.

Additionally, join platforms your target audience frequents to network with potential customers and foster long-term client relationships. Staying active on these platforms allows you to maintain consistent engagement with prospects and drive brand visibility. This brings us to the next point – digital marketing strategy (see below).

  • Post and Promote Content

Regularly posting and promoting content on your website and social media helps attract leads, increase conversions, boost your brand’s following, and it gives your connections something to interact with. It also (quite literally) gives you a platform to display your expertise in your specific industry or niche, further establishing your business’ credibility and overall value to clients. 

7. Invest in Helpful Tools

Think about investing in tools and technology that allow you to automate, organize, and simplify menial tasks. This frees up your time and energy as a business owner, enabling you to focus on more important or lucrative tasks. Here are some examples of helpful tools for freelancers:

  • Project management systems such as Teamwork, HubSpot, or Zoho
  • Scheduling software like Calendly
  • Invoicing tools such as Square and Hiveage
  • Accounting software such as FreshBooks and QuickBooks
  • Customer relationship management (CRM) like Zendesk and Salesforce

Advice from Freelance Business Owners

Now, let’s hear advice from freelancer business owners who went through this transition. 

  • Allow yourself to say no to clients that aren’t a good fit for you

“I had a hard time accepting defeat in the beginning. I tried extremely hard to get every single job and would change my prices to cater to everybody that reached out. I justified it by saying to myself that taking on a lower-paying job would still be a portfolio piece and a potential referral down the line. I learned the hard way that not all leads are a great fit and had some tough experiences doing work for very little money with some overly demanding clients, it only built resentment, and I didn’t enjoy those jobs.” – Kari Bjorn, Wedding Photographer, and Business Owner

  • It’s okay to learn as you go 

Take baby steps. You don’t have to have everything figured out. You don’t have to start with a huge portfolio. You don’t need a client list of 20+ people. Freelancing is something you build. Be intentional about your business, and success will follow.” – Alli Hill, Founder, and Director of Fleurish Freelance

  • Don’t be afraid to invest in helpful resources and services 

“The biggest challenge when I was trying to scale from freelance to business was capital. It always felt like such a risk to invest in a service or a new tool or hire people to do what I couldn’t. In the beginning, if a coding issue popped up on the website, I would spend a week learning everything I could and trying different solutions. Instead, I could have hired someone for $15 on Fiverr to fix it in 10 minutes. Understand the power of your time and what your zone of genius is.

If I were to have a redo on my business, I would have not hidden behind wanting to be in control of every aspect. As an entrepreneur, I was afraid to delegate because the things I wanted were so specific. Now I can see the power of a team. I spent so many hours, which translated to years of my life working on petty tasks that I should have outsourced way sooner.” – Veronica Hanson, Founder of Nomad Veronica

  • Distinguish your services from others in your industry 

Take your current freelance work and put a unique and useful twist on it. The internet is saturated with ideas as it is, while sometimes competing with other people is good, typically it’s much easier to bring traffic towards your business if you are offering something other businesses aren’t. That’s why research is crucial, if not the most important step to building a site from the ground up.” – Samson Baxter, Founder of Fursonafy

  • Build relationships with clients and make them want to work with you

“…Be the person that clients want to work with. I haven’t looked for freelance writing work in years because I spent a lot of time building relationships early on. My oldest client I’ve had since 2013. And I have several others that I’ve worked with for years. When one of my editors moves on to a new publication, I’m almost always invited to write for that publication because they like working with me, they know I can turn in excellent work and I can meet deadlines. 

So focus on providing a great end product, whatever that is for your freelance niche, and deliver it in a way that makes people want to work with you again. That’s really the secret to creating long-term, sustainable income as a freelancer.” – Rebecca Lake, Freelance Financial Writer and Business Owner

  • Keep going even when it’s hard

“The paperwork was the hardest part. Making it all into a paying business needs some real papers. But I had my resolve to see this thing through and make it the best I could.

The biggest tip would be to not be discouraged. Rome wasn’t built in a day. And if you’ve already triumphed, keep at it. The online space is ever-changing; there’s a new app every day. Keep discovering, keep improving.” – Cayla Thurman, Business Reputation Consultant and Business Owner

It’s Time to Start Your Business 

And with that, you now have a clear picture of what it takes to transition your side hustle to a freelance business. 

Working for yourself offers many rewarding benefits – some of which you’ve probably experienced or guessed from working as a freelancer on the side. But, transitioning to a business isn’t necessarily an easy process, as it comes with its own challenges and hiccups. 

Nevertheless, with the right game plan, support systems, and determination, you can overcome any obstacle that comes your way and build your business from the ground up.


Author Bio

Become A Freelance Business Owner In 7 Effective Steps 1

Kim Sayers has been a content creator for over 4 years – writing for small businesses, specifically focusing on marketing, sales, and communication. She works with telecom experts at Global Call Forwarding to gain insights into how businesses can use communication tools to effectively run their business. Social: LinkedIn