Design Freelancing 101: Things to Consider When Working for Yourself

Most designers have contemplated or at least sensed the allure of going freelance. What better boss is out there than yourself? There is also the promise of sleeping in and days spent wearing pajamas (at least on the bottom) that for some is irresistible. It’s not quite that simple, however. There is a real hustle involved in the freelance life and before you put in your notice, you should make sure you understand what it means to work for yourself, and the basic considerations you need to make in order to be successful.

Understand Your Business

Understanding the business aspects of freelancing is just as important as understanding your craft. What are the skills and services that you are providing your clients? Do you know the value of your skills and services? Bookkeeping is a necessary component that every freelancer needs to learn to survive financially. Treat freelancing like a business not a lifestyle; taking control of your financial health will allow you to to live the life you want to live.

Knowing what you are offering helps in finding and and selling your services to clients. Defining a niche that you can specialize in establishes your credibility when pitching your skills, services and solutions and will give comfort in your skills helps you when working with clients.

In order to work within client budgets, establish a billing process and value for your services. Defining the value, you offer to clients can be difficult. Research existing market rates for hourly rates and fixed rate projects. Undercharging will result in having to take on more work to meet expenses, while overcharging will result in not having enough work to cover expenses. Having a flexible billing model can help you price a variety of projects (big, small, simple, complex). Learn when to use hourly rates (where you are paid for how long it takes to finish the project), a fixed rate (you will need to determine the time and possible overtime on a project) and value-add pricing (you should calculate how much value you are giving a client for solving the specific problem).

The basic principles that every freelancer should understand is invoicing and keeping track of billables and expenses. Keep records and receipts in a safe place. A simple shoe box is a start. Match receipts to the type of expense necessary to run your freelance business. Subscriptions to web services, software, workshops and computer repairs are expenses that can be overlooked come tax time.

Contracts

Contracts help protect you and the project stakeholders. Define the nature of the work, when are certain deliverables are due and who is responsible for each aspect of the project. Remember to state the cost of the project and what is and is not included in the scope of work to be done. Don’t become the de facto technical support. A contract should state what the payment terms of the project are, who owns the intellectual property (IP) and when the IP transfer will occur and when the project will be completed. Situations may be different for type of work you do.

Contracts should cover contingencies, quality assurance and worst case scenarios.

Having a cancellation clause is good practice and useful if the nature of the work or relationship with the client changes. Clients may “pull” a project for various reasons. A cancellation clause helps you get compensated for the work done.

“Never work without a contract.”

As a freelancer, make sure to define what is considered “maintenance” (updates to a current site or project) or what is considered a new project. A simple rule to follow is that updates to content are considered maintenance, while changes to structure, adding features, functionality or page layouts are considered a new project. Adding a new element to a page may seem easy but may require whole-scale changes to interface designs, element structures and code bases, not to mention that changes may impact the existing user experience.

Define what the technical requirements of a project are. You don’t want to be caught supporting a relatively unknown browser or technology. When meeting with stakeholders, note the types of phones and browsers they are using to establish a requirements baseline.

Establish a Work/Life Balance

One of the hardest parts of freelancing is drawing a line between where the work ends and your life begins. It is very easy to turn your kitchen table into an office. Create a defined space that is your work space and keep it from encroaching on your living space. Without a defined work space, your entire living space becomes associated with work and you have no place to call your own or where you can escape reminders of work.

Set guidelines for when your work day ends. Not answering client emails after a set hour can help you establish and maintain much-needed time for a personal life.

Legalities and Taxes

Taxes is the one subject no one likes to talk about but it plays, or should play, a major part in your business and business decisions. Before leaping into freelancing, it is best to educate yourself on the tax implications of being self-employed and running your own freelance business. Self-employment can also make it hard to secure financial services such as loans or lines of credit. Be prepared to retain and submit financial records and other paperwork for simple things like opening a bank account.

Understand what the tax policies and legal requirements for your jurisdiction are. This may include registering a business even though you are working alone, and getting a license to run a business from your home or apartment. Remember to note the type of taxes you may be required to collect and remit when you are self-employed.

Let the Hustle Begin

With the essentials in order, you might feel ready to take the plunge into becoming a full-time freelancer. But before you leave your cushy job, know that while freelancing comes with freedom and flexibility, it also involves hard work.