Starting Your Freelance Business: The Fundamentals

Sep 26, 2016

Post updated: December 4, 2020

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Let’s face it—starting your own freelance business is stressful. There are so many different little things and moving parts you need to take care of before you ever even get to the point where you’re actively marketing your stuff to potential clients or customers.

Admittedly, when I was starting my own business, I was pretty uninformed about all of the groundwork I’d need to have done before I’d actually be able to get to the things I liked.

Of course, I knew there were fundamentals I needed to take care of—but, I never really gave much thought to just how time-consuming those basics could be.

So, today, I’m dedicating an entire post to those things you’re going to need to take care of before you ever get to the actual fun parts of your freelance business. No, the building blocks aren’t exactly the sexiest part of doing your own thing—but, they’re undeniably necessary!

When should you take care of these things?

Looking back on starting my own business, there’s one big thing I wish I had done: Taken care of these fundamentals while I was still employed full-time.

Why? Well, as I said before, these nuts and bolts are time-consuming. But, it’s not billable time. So, you’re spending hours taking care of these important pieces, without even a dollar to show for it.

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I addressed a few of them before taking the leap. But, in hindsight, I wish I would’ve handled all of them while I was still receiving a steady paycheck from my full-time employment.

That way, when I actually jumped ship, I would’ve been able to get started right away with client work—rather than needing to spend all sorts of times getting these basics taken care of.

So, consider this your freelancing motto: The sooner you can get these fundamentals taken care of, the better.

However, make sure you check your contract with your existing employer (if you have one) to confirm there are no stipulations about you freelancing or side hustling. Better safe than sorry!

What fundamentals do you need to address?

Alright, so you know that you’ll want to get your freelancing foundation laid sooner rather than later. But, now you’re left with one big question: What basic things do you need to take care of?

Here are the fundamentals you’ll want to have handled before you really get rolling with your business:

1. Business Entity

A business entity isn’t a requirement to freelance. If you don’t go through the process of establishing a legal entity with your state, then you’re a sole proprietor. Plenty of freelancers go that route, and there’s certainly nothing wrong with it.

Personally, I opted to formalize things by setting up an LLC. I like that it:

  • Offered some protection by separating my business from my personal assets
  • Made me look more “official” and legitimate with potential clients

Forming an LLC was a process that seemed completely overwhelming and intimidating to me at first. But, honestly, this process couldn’t have been much simpler.

Google “form an LLC” along with your state name, and you’ll find a website where you can take care of the entire process online. It only took me a few minutes and a relatively small fee to get this done. So, I promise, it’s not as complicated as you think it is.

2. Website

Here’s something that can be a little more time consuming than forming your business entity: Building your business website.

You’re going to want (dare I say need?) that when you start pitching your services to new clients. Get the whole thing polished up ahead of time so you’re ready whenever any potential opportunities pop up.

While you’re at it, you’ll also want to look into creating a professional email address for yourself.

If you can set one up using your domain name, that’s ideal. But, regardless of what way you decide to go, just make sure you get an email address that you can use for all of your business-related correspondence. It not only makes you look more professional, but also makes it easier for you to keep track of all of your business emails.

Freelance Business Fundamentals

3. Accounting System

The word “accounting” alone is likely enough to make any freelancer groan. However, being able to keep adequate track of your income and expenses is absolutely crucial. Just wait until tax time rolls around, and you’ll quickly see what I mean.

Luckily, there are so many different options out there for freelancers to manage their own accounting.

Personally, I use QuickBooks Online and have been incredibly happy with it. But, do some research to find a system that works best for you—whether it’s dedicated software or even a simple spreadsheet to start.

Getting that situated right off the bat will save you a lot of headaches (and time spent entering old information) down the line.

4. Bank Accounts

While you’re sorting out your accounting, it’s also smart to open a bank account specifically for your business. I’m not an expert on all of the regulations, but I believe if you set up a business entity, then you have to have a separate bank account for your business.

All of your business income should be deposited in this account, and your business-related expenses should come out of here as well.

I went to my bank and opened a business checking account, and then also got some business checks and a debit card right away too. It’s another one of those tasks that seems complex, but it actually pretty straightforward in practice.

Be forewarned that many banks require a minimum balance or a certain number of direct deposits per month to avoid a fee for a business account. Do your research—and even shop around at some different banks—to find the option that suits you best.

Keeping everything in one account might seem like an unnecessary detail. But, trust me, it’s another one of those things that’ll make tax time a lot easier (and keep your accountant happy, if you have one). Plus, it helps to make your business that much more “official”.

5. Templates

There are numerous tasks that you’re going to handle again and again as a freelancer. Some of the biggest ones? Sending invoices, project proposals, contracts, and other important documents to clients.

You can start from scratch each time, but you’ll waste a lot of precious hours reinventing the wheel.

Instead, it’s smart to equip yourself with some templates that you can tweak and tailor for your clients.

Not only does it help you look professional and ensure consistency, but it also saves you tons of time and manual effort.

Stumped on how to get these templates up and running for yourself? My Freelance Fundamentals Bundle has everything you need to start your freelance business on the right foot.

6. General Organization

Here’s the final piece I recommend taking care of before actively seeking any clients: general organization of your business.

For me, this included things like determining how I’d keep my client files organized, figuring out where I’d store my receipts and any other tax information, and creating folders for various emails.

Of course, specifically how you’d like to organize is a personal decision. But, I highly recommend taking the time to get this all sorted out so that you have a dedicated system in place once you get started. It’ll save you from creating a big mess you’ll have to untangle later!

Ready to handle all of those fundamentals that are necessary for getting your freelance business off the ground? What piece are you going to start with?