Predictions for freelancers in 2022

Hectic’s guide on how to start and run a freelance business in 2022

guide for freelancers
Chapter 6

Most frequently asked questions about freelancing

Freelancing has changed a lot.

The first known instance of the term “freelance” in the English language was in the early 1800s. In 1809, Thomas N. Brown wrote a book called The Life and Times of Hugh Miller that used the word ‘freelance’ when referring to a mercenary soldier named Hugh Miller. Miller was described as “a soldier who was loyal to the King and not a freelance”.

Not long after that, Sir Walter Scott's novel, Ivanhoe, mentions a feudal lord referring to his paid army of 'free lances'.

“I offered Richard the service of my Free Lances, and he refused them—I will lead them to Hull, seize on shipping, and embark for Flanders; thanks to the bustling times, a man of action will always find employment.”

The suggestive word took hold fast, and also acquired wider meanings: like referring to a politician without political affiliation or a person who does any type of work on their own terms without any permanent or long-term commitment to a particular employer. Although “freelancer” is typically used as a noun now to refer to this second group of people, it is actually a newer term than “freelance.” So, even though "She's a freelance" may sound like contemporary usage, it’s actually the original use of the term.

Strangely enough, the phenomenon of “freelances” was well-documented throughout history, even if the word “freelance” was a creation of the 19th-century.

The verb “freelance'' refers to the act of pursuing a career that doesn’t involve making a long-term commitment to one employer. If you look at people who freelance as corporate mercenaries who work for the highest bidder, you wouldn't be far-off from the word's original meaning.

There are even freelancers in classic space operas set “A long time ago in a galaxy far, far away.”

Image credit: Scott Beale / Laughing Squid

Now that you know the backstory, let's tackle your toughest questions!

Got a question? Get your answer

If you have a question about freelancing, you're in the right place.

What is a freelancer?/What is freelancing?

What exactly is a freelancer (or freelancing)? Freelancing is the practice of contracting with an individual to provide services for a fee rather than being an employee of the company that hires you. A freelancer often works from home and typically has multiple clients at any given time.

Freelancers are sometimes called independent contractors, contract workers or consultants because they are in business for themselves (though not necessarily owning any business assets) and often start out as sole proprietors, meaning they receive income tax forms such as 1099-MISC at year-end rather than a W-2.

What's the difference between a contract worker and a freelancer?

They are often used interchangeably, but some people differentiate by saying that a freelance worker typically works for themselves, while contractors may work for an agency.

In other words, freelancers are often hired to do specific jobs for specific periods of time while contractors typically work for one organization on a fixed basis. For example, a contract worker may work for a single company to complete a specific project or they may work in an ongoing capacity doing a specific type of work — think IT consulting, for example — for various departments within the same company. Often these contractors will be managed by a third-party staffing firm that acts as the employer and handles payroll, benefits and other human resources functions.

What are the key differences between freelancing and having a traditional job?

The biggest difference is that, as a freelancer, you are essentially your own boss. You are responsible for finding your own clients, bidding on jobs, and completing projects to the satisfaction of your clients. There's no HR department to help you with benefits or other administrative tasks.

Working as a freelancer offers many advantages that traditional employment doesn't. For example, you can work from anywhere in the world, set your own hours, and have more control over what you do, what to charge for your services and who you work with. Freelancers can also save money by deducting business expenses from their taxes, reducing their taxable income.

On the other hand, traditional employees must report to their employers every day, and they don't have the freedom to choose their clients or set their own rates. Many employees are bound by non-compete agreements that prevent them from working for competitors of their employers.

As a freelancer, you control your destiny - but there is no one else to blame if things go wrong.

What are some of the most common misconceptions about freelancing?

Many people assume that freelancers do not put in as many hours as they did when they worked at a traditional job. I don't know where this idea comes from but it's absolutely false! In fact, freelancers usually work more hours than regular employees because they're responsible for every aspect of their business – from accounting to marketing and everything in between!

Other people don’t consider freelancing a “real” business. But according to the IRS, it is—and you’re required to keep records of your income and expenses. If you earned $400 or more freelancing, check this and this out.)

Then there are the canards about freelancers doing whatever they want whenever they want. You know the ones…

  • Freelancers work at home all day long in their pajamas. Just because there's no no dress code, they lounge around like a slob surrounded by the remains of last night's dinner and yesterday's laundry.
  • Freelancers can't get a “regular” job. They are the untouchables of the labor market: the unemployable, the incompetent, the underachievers.
  • Freelancing is all about chasing your passion. Most freelancers have a job that fits their interests perfectly. Freelancers are picky about what they work on and whom they work with.
  • Freelancers don't have to answer to anyone because they’re the boss.
  • Freelancers are always taking long lunches and breaks, because they don't have anyone looking over their shoulder or checking their time cards.

As you’ll see as you read through this guide, these statements are much different from the reality of freelance life.

Where should I find my first client?

That’s the million-dollar question isn’t it? How do you find clients? It depends on what you're doing.

Starting a profitable freelance business can be challenging, especially when you don't know where to look for clients. There’s no one best way to find clients but any of the following methods will get you started. Once you do good work for a few clients, they’ll be more than happy to refer you to other clients and your freelance business will be off to the races.

Connect with friends and family — The best place for new freelancers to start is with your existing connections. Start by going into your personal network and letting them know that you're now freelancing. This is an easy way to get some experience under your belt. Consider taking on a couple of small projects for friends and family at discounted rates so you have something to show off in your portfolio. You won't make much money at first, but it's better than nothing.

Take on freelance work for a discounted rate — This may sound counterintuitive but hear me out. If you don’t have a track record and a solid portfolio of past work, getting some social proof under your belt — like client testimonials or case studies showcasing your results — landing some work that pays a little less than you may like could end up being more valuable to you in the long run than earning the big bucks right out of the gate.

Join local networking groups — Many communities have networking events where business owners can meet and exchange information. Visit one of these events, bring plenty of business cards, and introduce yourself to different people. Tell them what services you offer and why they would benefit from hiring you.

Find clients where they already are — The best place to find new freelance clients is where they already are. For example, if you're a web designer, go to web design forums that your potential clients might be browsing and answer questions or offer advice when you can. Not only will this help solve other people's problems, but it will show what kind of expertise you have.

Use freelance job sites and job boards — If you're someone who can easily show off your work online with a robust portfolio of past work, a site like Upwork or Contently could be a good place to start. Other freelance sites you can use to look for new opportunities include Flexjobs, Behance, SolidGigs, and Freelancer.

Ask for referrals — Another option is to get referrals from people you know — it helps to let everyone you know that you're looking for work. This can feel awkward but it's totally normal and should always be done when just starting out as a freelancer (and sometimes even later on).

Do cold outreach — You can also contact companies directly and see if they need help in your field. Once you know the right person to speak with, you can cold email, cold call, or even connect on LinkedIn.

How do I market myself?

That’s a great question… and a little bit outside the scope of this guide. Luckily, we created an entire guide on how to market your freelance business!

In the meantime, here are a few tips to get you started.

Build a website that showcases your work and explains how you can help clients. This doesn't need to be expensive — you can use software like WordPress or Wix to build it quickly and easily.

Network at industry events or conferences relevant to your field. Attending industry events and conferences is a great way to meet people who might be interested in hiring you (or know someone who is). The more people who know what kind of work you do, the more opportunities will come your way.

Once you have a few projects under your belt, you can start expanding from there. You might try writing guest posts for blogs your ideal clients read or connecting with potential clients on LinkedIn or other social media platforms.

How much should I charge?

You may be asking the wrong question.

What you should charge depends on what kind of work you're doing, how much experience you have, how much time a project takes and how difficult or specialized it is. Don't make the mistake of charging too little just because someone else would be willing to do it.

Here are some different ways you could charge for your services:

  • Per hour
  • Per project
  • Retainer
  • % of revenue
  • % of ad spend
  • Value-based pricing

How much will it cost me to start?

There’s no one-size-fits-all answer to this question. This depends on a number of factors, including your location and the type of work you wish to do.

The cost of starting a freelancing career can range from $0 to $10,000 depending on your resources and your goals. If you want to go the completely free route, you could start tomorrow with nothing more than a LinkedIn account and some hustle. If you have the money, however, there are ways to spend it that will help accelerate your progress. For example, if you decide to buy a domain name for $20 and build a WordPress website for $100, that would be a small investment that could pay off in the long run.

This is all to say that there are no hard-and-fast rules when it comes to startup costs. You can get started without spending a dime or you can invest your money wisely by buying products and services that will help you become successful faster.

You may want to consider investing in the following items:

  • A computer
  • A reliable internet connection
  • A phone
  • Software (free and paid)
  • A dedicated workspace

What are some freelance jobs that don’t require a degree?

There are tons of freelance jobs that don’t require a degree. Here are some of the most popular ones:

  • Translator and Interpreter
  • Editor and Proofreader
  • Graphic Designer
  • Copywriter
  • Website Designer
  • Photographer
  • Freelance Writer
  • Virtual Assistant
  • Dog Walking or Pet Sitting
  • SEO (search engine optimization)

and the list goes on…

What kind of work is available as a freelancer?

The short answer? All kinds!
Many freelancers run their own businesses, offering their experience in specialized fields such as writing and translation, graphic design and web development, marketing and sales consulting, accounting or other areas. However, you don't have to own your own business to be considered a freelancer; if you're simply self-employed — that is, you perform tasks or services for others without being employed by them — then you can call yourself a freelancer.

What are the must-have skills for freelancing?

The best freelancers we know have a few key things in common. They're organized, self-motivated and willing to take risks. They also possess skills that are in high demand, like writing or graphic design, and they have the ability to manage their time effectively. But don't worry if you aren't quite there yet — these are all things you can learn along the way.

Being organized is crucial to your success as a freelancer. By using project management tools and calendars you can get ahead of schedule and have more freedom than you ever enjoyed in that desk job.

One skill all freelancers will need to develop is effective communication. You’ll need to communicate with clients, other freelancers, vendors and service providers, your client’s accounts payable department, etc. It is critical you know how to successfully exchange information with the people you encounter.

What does a freelancer need to know about contracts and invoicing?

Learn the lingo. You'll need to know how to create invoices and contracts in order to get paid (you can easily do this using Hectic). If you don't know the language of business, learn it now so you don't get taken advantage of later on.

You should be familiar with terms like "Net 30" or "Net 60," which means that the client has 30 or 60 days to pay the invoice.

Get paid faster by requiring a deposit. You may want to require a deposit, also called earnest money, upfront before you begin work. A 50% deposit is common, but it depends on what is customary for your line of business. For example, if you're shooting video for someone's wedding day and they cancel at the last minute, it's unlikely you'll be able to book another client for that date. A large deposit will help compensate for this loss of income and protect you from clients who cancel at the last minute.

Invoicing can be a drag. But it’s a necessity that gets you paid. Hectic helps you invoice efficiently and effectively, and accept online payments, so that you can get paid faster and easier.

What kinds of clients will hire me?

The first thing to understand about the freelance market is that it's huge. From graphic designers to writers, app developers to accounting consultants, there are freelancers working in every industry.

Many kinds of clients will hire freelancers. As a freelancer, you can work for an agency, a studio, a publication, a brand or a company. You can also work as an independent contractor or a consultant on your own terms. The clients I've had in the past have come from all different backgrounds and industries.

Almost anyone who would normally hire an employee will hire a freelancer. The kinds of clients I've had include big companies, tiny startups, nonprofits and even governments.

What is the most difficult thing about freelancing?

As a freelancer you're operating your own small business. As a freelance worker, you are not only your own boss but also your company's accountant, salesperson, project manager and chief executive officer —  in addition to doing the work that made you want to freelance in the first place  — which you may not find yourself doing much of with all the other responsibilities you have. Plus, you still have to take business meetings with clients (though they’ll probably be in coworking spots or coffee shops instead of corporate conference rooms if you’re lucky).

How do I stop working all the time and burning out?

Freelancers can experience burnout just like traditional employees. That’s why it’s important to take steps to preemptively stop burnout. You’ll want to establish a self-care routine that keeps you energized, promotes good mental health, and safeguards your career.

How do I manage unpredictable income?

More than half of all freelance workers in the United States have difficulty saving money.

According to a survey of freelance workers across the nation, 71% of freelancers found it hard to save because of unpredictable income, and 41% of freelancers found it hard to save because of short-term emergencies and high housing costs. So, the first thing you want to do is create a plan to address these situations.

Set money aside to cover you when cash flow is slow. Be conservative with your savings. The key to dealing with unpredictable income is to build a buffer into your finances. How much should you save? That's up to you, but I recommend having enough money in the bank to cover three months' expenses.

Stay on top of your expenses. You need to know how much money comes in and how much money goes out each month. If you're not already using software or an app to manage your expenses, I recommend tracking them with a spreadsheet or a tool like Hectic.

Know how much money it costs for you to live each month and determine how much money per month or year you want or need to earn as a freelancer. If that amount seems unrealistic given your market conditions, adjust your expectations so they're in line with reality—not every freelance business will become successful overnight! If there's still a gap between what you hope to earn and what is realistic in your area, try expanding the services that you offer or the areas in which you work, such as offering additional services like web design or working abroad if possible.

Remember, it's always better to get clients who are going to keep hiring you again and again. Then you won't have to worry so much about your income being unpredictable because you know you've got work lined up for the next few months.

Is freelancing risky?

All work is risky. You can get fired from any job, or hit by a bus on the way to work, or have a heart attack during your presentation to the board. But freelancing is not in general riskier than ordinary jobs.

Freelancers are more exposed to the business cycle than ordinary employees, but less exposed than employers. If you're working for an employer and suddenly no one wants what he makes anymore, you're out of a job. If you're freelancing and suddenly no one wants what you do anymore, you just have to find something else to do.

Still, there are some things that are riskier as a freelancer than as an employee: getting sick, having children (for women), growing old or being sued. For these things it's worth thinking about insurance before they happen.

How do I stay productive and avoid distractions working from home?

Working from home is great. I'm a big fan of it. But it has its drawbacks too. In the office you are constantly surrounded by other people doing work, and that's a strong social cue to get your own work done. When you're at home it's easy to get distracted by things like television, pets, friends who drop by unexpectedly, etc.

I don't know if there's a perfect solution. The best I've found is to create a schedule for yourself and stick to it as much as possible. Decide what hours you plan to work each day, and strictly enforce them. If you have an office, close the door during those hours; if not, put on headphones so your partner or roommates will know not to bother you unless it's an emergency. Here are some other tips that may help:

  • If possible, set up a dedicated workspace (If not, carve out a temporary space where you can get work done.)
  • Get a good pair of noise-canceling headphones (or some ear plugs; I LOVE these Hearos!)
  • Use the Pomodoro Technique (or whatever productivity technique works for you)
  • Use time tracking
  • Find an accountability partner (You don’t have to be in the same physical location; You can do co-working sessions online.)

How can I avoid working with bad clients?

There are always going to be bad clients. They're a fact of life. Hopefully, the more you take your freelancing career seriously, the fewer of them you'll encounter.

If it sounds like the client is going to be abusive or demanding, don't take the project. If the client insists on a contract or non-disclosure agreement that gives them unreasonable control over your work, don't take the project. If the client wants to pay you less than your normal rate for a project, don't take the project. If you're not sure whether a prospective client is going to be a problem, ask around to find out what other people's experiences have been with them.

The best way to avoid bad clients is to keep doing good work. That's how the best freelancers get all their business: by word-of-mouth referrals, repeat customers and other people who want to hire them because they know they can do great work.

How do I know when I should freelance?

For many people, the transition to freelancing happens gradually. You might start off with a few side projects, then decide to take on more work until it becomes your primary source of income. Other people make a conscious decision to become full-time freelancers. There really isn't one right answer as to when or how to transition into freelancing; it depends on your circumstances and goals.