Turning Your Side Hustle into a Freelance Business

Do you love your side gig? Have you been dreaming about doing it full-time? Many people are. A study by LinkedIn showed that freelancers will make up nearly half of the workforce by the year 2020.

Once your side hustle is established and plugging along, you might be among the growing population of remote workers who see an opportunity to become a full-time freelancer. The good news is, you’re not alone. We’ve been freelancers, too—graphic designers, web developers, writers, and other professions. We know what it’s like to teach ourselves the trade on nights and weekends, pick up odd jobs when you can find them, and work overtime to juggle it all.

Those who have been through it know that making this transition can seem like a big, daunting leap. Going full time means giving up the security of a steady paycheck. But reaching this plateau can also be very exciting, as you can finally see the possibilities—and the potential freedom.

It takes courage to make the leap, but we know you can do it. So if you’re on the cusp and want to move into full-time freelancing, use this guide as a jumping off point. Below, you’ll find concrete ideas you can use to prepare yourself for the transition.

Get into the entrepreneurial mindset

Let’s start with the most important preparation of all—getting yourself into an entrepreneurial mindset.

There’s a lot of responsibility that comes along with the freedom of being a freelancer. Rather than punching a clock, you have clients or customers to serve. The only money that comes in will be the money that you earn from selling your products or services.

If this sounds scary, you’re right—it can be. But for those who really love what they do, the trade-off is worth it. We’ve never met a freelancer who didn’t think so.

Consider even the very history of the word “freelancer”, which comes from “Free Lances”. According to Merriam-Webster’s word history blog:

When freelance first came into English in the early 1800s, it was used to refer to a medieval mercenary who would fight for whichever nation or person paid them the most. Our earliest written evidence for this use (so far, that is) is in Sir Walter Scott's novel, Ivanhoe, where a feudal lord refers to the paid army he's assembled:

“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.”

So that’s what you have to be as a freelancer. A man or a woman of action who will always find employment. Raise your glasses to the bustling times!

Dedicate a space to work

Once your mindset has been fortified, the next thing to consider is your workspace. If you have a dedicated place for your work, it will be easier to get into the right frame of mind.

If your mind immediately goes to a fancy office with floor-to-ceiling windows, let us shatter that illusion right now. Many an entrepreneurial adventure has started from the couch or the garage. Keep things simple.

You’ll need somewhere stable, but it doesn’t have to be fancy. Your work space can be a tiny corner of your apartment, or an entire room that’s transformed into a dedicated office. What’s important is that the time you spend in your dedicated space is time you spend working, and nothing else.  Establishing that relationship—and clear boundaries—will make it easier to do your job.

If you work better outside of the house, you might consider investing in a desk at a local coworking space in your city. These days, freelancers can often work from anywhere. Having a dedicated workspace will simply improve your efficiency and outlook.

Nine essential tools for freelancers

Now, let’s get into the nitty gritty. Like any creative enterprise, building your freelance business will require certain tools. Mindset and workspace lay the foundation—beyond that, it’s time to get your hands dirty.

Over time, you’ll develop your own preferred set of tools. But we know that when it comes to software for freelancers, it can feel like there are just too many tools on the market to even make an educated choice.

We’ve used a lot of them, so here’s a list of the essentials, with recommendations for each.

1. BUILD YOUR WEBSITE

One of the first things a potential customer or client will do when they hear about you is Google you. A professional-looking website establishes a clear brand and helps make sure your freelance business looks legitimate to customers. A website can also function as a way for potential customers or clients to get in touch with you—in other words, it’s a source of new business.

It’s no secret that our website is built on Squarespace. It’s beautiful, and we’ve found it very easy to use and update. To make it look professional, be sure to purchase a domain name (e.g. yourname.com). You might also use Wordpress or Wix. All three can help you get started with very little investment other than your time.

2. CREATE A SOCIAL MEDIA PRESENCE

The next most important aspect of building an online brand is to have a presence on social media.

Social media allows you to tell your story and have a conversation with potential customers. It’s a tool that you can use to engage with your customers about what your business does, what values you stand for, and why they should use your product.

Each social media channel has its own personality, so don’t feel as if you must be present on all channels. For quickly changing businesses or those that deal mostly in customer service, Facebook and Twitter are both great options. For product businesses, YouTube and Instagram offer creative ways to showcase the visual aspects of your content. Each channel also attracts a specific audience, so make sure to tailor the content you post to each social media site.

Social media is a great way to build your brand personality as well as find a community or following that is interested in your business. Our suggestion here is to pick one or two channels, and go deep on them. Social media can become a time suck, so try not to spread yourself too thin.

3. GET A DEDICATED BUSINESS PHONE NUMBER

One of the biggest mistakes that first-time freelancers make is that they forget to create a separate phone number for their business. When you’re just starting out and you only have one or two clients, this may seem like no big deal—especially if they’re congenial clients and easy to work with! As your business grows, however, you will become harder and harder to keep your personal and business life separate.

We recommend keeping your personal phone number separate from your business phone number from the get go. A second phone number subscription from Burner (*waves*) comes with unlimited calls, texts, and pics for only $4.99—about the price of a latte each month.

This barrier will provide privacy and solace for your personal life when you need it. You’ll always know when the phone call is about work, and you can answer with more than just “hello” if you want to present a certain professional appearance.

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4. GET A DESIGNATED BUSINESS EMAIL ADDRESS

A second email address is another tool that helps to separate your personal and business life. In addition to creating separation, a second email address also offers legitimacy to your business.

You can choose to get a second email for free from Gmail or Yahoo Mail, or you can purchase a more business-customized email for a small fee. A customized email will have your businesses name or domain name after the @ symbol instead of Gmail or Yahoo.

5. OPEN A BUSINESS BANK ACCOUNT

This isn’t as much fun to talk about, but it needs to be said—separating your personal and business finances does as much, or more, for making things official and getting you into the entrepreneurial mindset as any other suggestion we’ve made so far.

A business bank account not only makes sorting out your finances easier when it comes to tax time, it just makes it simpler to track income and expenses, and receive payments.

6. SET UP AN INVOICING AND TIME TRACKING SYSTEM (IF YOU NEED IT)

If you’re in the service business or bill at an hourly rate, you may also need to find a good invoicing and time tracking software to track and bill for your work. There are numerous great options out there that come in a wide range of affordability. Our top three choices are Harvest, AND CO, and 17Hats.

Make a list of what you need for your business, and do the research. Don’t be afraid to invest a few bucks a month into software that’s going to save you tons of manual entry time. If you make receiving payments easy for your clients/customers, collections will be way less of a headache.

8. USE ACCOUNTING SOFTWARE

Freelance businesses are usually small, so it might not take a lot of time to manage your books.  As your business grows, it will become more time consuming and you may want some help. After a few years, you may want to make the transition out of spreadsheets and into QuickBooks, for example.

Again, it’s ok to spend money to make your business run more efficiently and save yourself from having to do the jobs you don’t enjoy or aren’t skilled at. Once you set up the system, you can focus on what you love (and on making money). Whether you’re doing it on your own or hiring a bookkeeper, when you’re ready you’ll need to purchase accounting software. Other options include FreshBooks and Xero.

Accounting software makes managing income, expenses, and invoices easier. When it comes to tax time, you can provide access to your accountant who will take care of the rest. It’s also a great tool if you want to get more insight into the health of your business. You can run a Profit & Loss (P&L) statement in QuickBooks with a few clicks of your mouse. Keeping clean books leaves you more time to worry about doing good work, especially around tax time.

9. USE PROJECT MANAGEMENT SOFTWARE

All freelancers wear multiple hats. From paying bills to finding clients to doing the work — it’s all up to you. Project management tools makes sure that with all these moving parts, nothing falls through the cracks.

Again, do your research and write down what your business actually needs. But when it comes to PM software, it’s usually best to try a bunch and just use your favorite one. There’s no right or wrong answer. The best project management software is the one you actually use.

Trello, Asana, and Basecamp all have free trials, or free-tiered accounts. Start there, and branch out if they don’t work for you.

Don’t forget to stay sharp

As an entrepreneur and freelance business owner, your time is precious. It can be easy to think that you don’t have time for ongoing education. That’s a huge mistake. Staying fresh and relevant is what will help you win. Continuous education will keep you nimble—it will give you an edge over the competition.

Business education can come in many forms: reading blogs and books, attending webinars, and listening to podcasts can all count as education! What’s important is to tune into what other people within your industry are talking about and watch what the most successful ones are doing.

Here are a few of our favorite business education resources:

• GrooveHQ’s Blog
• The Great Game of Business
• Small Business Trends blog
• Entrepreneur on Fire podcast
• Gary Vaynerchuck’s podcast
• altMBA by Seth Godin

Another arm of business education is attending conferences. These can be a double whammy of not only education, but also networking. Attending a conference that’s directly or indirectly related to your business can help you gain knowledge, meet new contacts who can advise or partner with you, and possibly even meet customers.

Seek strength in numbers

Many freelancers feel like they’re alone within a bubble—especially when they’re starting out—but that’s simply not the case. Creating a community of your own, or tapping into an existing one, will help you along during your journey.

Whether you find a mentor or join a professional group, it’s important to have someone to talk to. These people act as a sounding board, helping you to recognize bad ideas and to brainstorm good solutions when you’re stuck on a problem.

If you’re not sure where to begin, look on Meetup.com for groups that meet in your area. When you’re just starting the transition from side hustle to full-time freelancer, it can be intimidating to join one of these groups, but in general they’re supportive and eager to help people.

Turning your side hustle into a full fledge freelance business takes time—a suite of tools, a support network, and a lot of guts. Good luck out there!