Freelancing can be a pretty sweet gig – you set your own hours, choose which clients to take, and can work from absolutely anywhere. But what happens when your career starts to take off, and it’s time to make the transition from being a freelancer to an officially incorporated small business?
Well, you follow these helpful tips, of course!
Running a small business shares some similarities with working as a freelancer – but there are differences as well. Coming to understand these differences is the key to success in your new business endeavours.
Understand Corporate Entities
The most important change is that you will no longer simply be operating as yourself, but as an incorporated entity. Nowadays, you have many options – you can choose between standard corporation, sole proprietorship/partnership, and limited liability corporation (LLC).
Before incorporating, research to ensure that you are making the right choice. If you are unsure, LLC is typically a solid choice, as you are not bound by strict corporate formalities but also do not bear tax liability for your business.
Track Your Time
While you can still enjoy the flexibility of a self-scheduled workday, it’s important to start keeping records. Use an app, software or other timer system to record hours each time you work. This will both encourage a healthy work-life balance and allow you to understand exactly how much time you and your team members are devoting to work each week.
Additionally, time tracking will allow you to more easily communicate your rates to your customers and ensure that you are making a profit proportional to the amount of work you perform. Your tracking method should help you focus both on when you’re working and how much you’re getting done.
Change How You Look at Finances
With a small business, you’re no longer just earning money for personal use. With your business come expenses – meaning that it is important to actively focus on growing your income. It’s not enough to simply make a large enough paycheck for you yourself to survive. Seek growth in order to thrive.
There are a number of small steps which you can take in order to change your financial viewpoint. Create a company bank account. Prioritise negotiating higher prices with clients as soon as possible. Additionally, consider hiring an accountant to manage your business’s finances long-term.
Take a Long-Term View
Speaking of long-term, transitioning from being a freelancer to becoming a business owner means planning. You need to ask yourself where you want to be in one year, five years, or even ten. Without long-term goals, it is easy to stagnate as your company will never become successful or profitable.
Write down your plans and make sure you can always access them easily. Make sure to consult your business plan regularly to keep track of your progress. And of course, take time to celebrate successes and goals when you reach them.
You Don’t Have to Do This Alone
Finally, possibly the best part of turning your freelance endeavours into a small business: you get to put together a team. In fact, running a small business entirely on your own is not recommended. Hiring a team of committed, dedicated long-term workers will help you grow, succeed, and overcome any obstacles in your way.
While you can hire contractors or freelancers if needed, there are major benefits to establishing a core full-time team. Team members can utilise their wide range of skills to accomplish all of the goals suggested in this helpful guide. Together, you will smoothly accomplish the transition from ambitious freelancers to a successful, unified business.