How to Start a Freelance Company

Dec 10 2009 by Shannon Noack | 64 Comments

Starting your own company is wonderful, scary, and exciting! I’ve recently gone through the process and started up my own freelance company, Snoack Studios, and I’d like to share my personal insight on how to get your own company off the ground, using my own story as an example.

How to Start a Freelance Company

Step 1: Find a Business Name

First things first, you need a name. As a freelancer, you will probably want to be a Sole Proprietor and you can certainly use your own name. I wanted to plan for expandability and flexibility: I may have employees, I may subcontract some work to other freelancers, or maybe even sell my business one day, so I went with a company name of Snoack Studios. Whatever you choose, make sure it works for you and fits the service you provide.

Perform some basic research

Do your homework as well, search Google to make sure that your company name is unique, and mostly importantly, search trade names at the Secretary of State office in the state you live in (for U.S.-based businesses). In my case, I had to use Arizona’s search. If a company name is already registered in your state, then you can’t apply for a trade name, which means that you can’t open a business checking account and you can’t accept checks under that name.

See if the domain name is available

Step 1: Find a Business Name

You should also check out Ajax Whois to make sure the domain name you want is available. (See a list of tools for picking a domain name).

Step 2: Create a Website

Step 2: Create a Website

Once you have an awesome name to do business with, you’ll need a kick-butt website. Showcase your best work in your portfolio because this is what the people really want to see and what will help you land more clients.

The basic/standard information that your website should have are:

  • Contact information
  • A list of services that you provide
  • A sampling of your previous work

Track your site stats

Also, use a statistics tracking application on your site to record how many people are accessing your site, what pages they visit the most, and where they are coming from. Google Analytics is my preferred tracking method, but there are some other ones out there worth looking into: check out a list of free site analytics tools.

Submit your site to design galleries

Once your site is up and running, submit it to design galleries to get your name and web designs out there. (See a list of Six Revisions readers favorite design galleries).

Step 3: Start a Blog

Having a blog connected to your site shows credibility. You can talk about web design, color theory, design trends and things that are relevant to your business. You can use this as a way to show potential clients that you have expert knowledge about your profession.

Step 3: Start a Blog

You can also submit your blog posts to designer communities like Script & Style DesignM.ag and Noupe; if your content is good, you can get some site traffic this way.

Step 4: Get the administrative and financial stuff sorted out

This part is definitely not fun, but necessary in getting your business ready to do some actual business. First, you’ll need to get a business checking account.

Even if you’re using your own name to do business with, you’ll appreciate keeping things separate when April rolls around and it’s time to do your taxes. There are many banking options out there, so do your research and find out what bank and solution will best fit your needs.

Sit down with a few bankers, explain your business and see what they have to offer and what they recommend. I found that many offer great advice and helpful insight that you may not have thought of (even if you decide not to bank with them).

Billing/invoicing

Billing/invoicing

Decide how you will keep track of billing and invoices. There’s a trend to move online, with services like FreshBooks, but I opted to go with QuickBooks because it didn’t rely on an internet connection. Also, it’s fairly easy to get started and very compatible for accountants should you choose to use one come tax time. Some resources to help you make the decision:

Taxes

Speaking of taxes, you’ll want to figure out a system to track expenses so that it will be easier to itemize things when you do your taxes. I keep a notebook in my car to track mileage, and I created an Excel spreadsheet for things I purchase for my company like design software, business cards, stamps, and office supplies.

Insure yourself

Finding your own health insurance is also a necessity when owning your own business.

Use a project management tool

Use a project management tool

Look into project management tools. To help you decide on a project management tool, ask yourself:

  • Will you have employees?
  • Do you need to track your time?
  • Will clients need to look at your projects and respond to your notes?

Different tools fit different needs that your unique company may have.

I use Things to keep track of projects. I’m a very task-oriented person and I love being able to check something off my to-do list. Things allows me to keep Home and Work tasks, and separate everything by project. I can even drag stuff into today’s tasks, allowing me to know what really needs to be done today. For time tracking, I use SlimTimer. Other solutions that I looked at, but didn’t choose, are Action Method and dotproject.

As a right-brain individual, I struggled with this step of starting a business the most. However, once you have these building blocks in place, your business will be ready to rock.

Step 5: Get Your Social Media on

Step 5: Get Your Social Media on

Get connected! If you haven’t already, sign up for Twitter and LinkedIn. I’ve connected with lots of people on Twitter and found it to be a beneficial tool for reaching clients and networking with other designers.

There are also many other places to connect with people: Flickr, Digg, Delicious, StumbleUpon. All of these places allow people to connect in a more casual setting. By helping others and sharing resources to other people, you’ll be able to display your talents and knowledge to the people you’re connected with. (Check out a list of social news sites for web designers).

Conclusion

Building a business is tough work and although these five steps aren’t all-inclusive, they should give you a good place to start. I know that I’ve certainly learned a lot in my journey by making mistakes, performing research, talking to people, and seeing what others have done with their business.

I’d love to hear from other fellow designers who have started their own business, or are thinking of starting one see me on Twitter or leave a comment and join the discussion!

Related Content

About the Author

Shannon Noack is a designer in Arizona and the Creative Director of Snoack Studios. Designing is her passion in life and she loves to create websites, logos, print work, you name it. She also blogs regularly here and you can connect with her on Twitter as well.

64 Comments

Andy Feliciotti

December 10th, 2009

Great little guide, thanks!

Rochelle Dancel

December 10th, 2009

I have often found that, with articles to do with setting up as a freelancer or a freelance company, the nuts and bolts of the actual business side of things – tax, business models etc. – are often negated in favour of things like networking tips and productivity tools; don’t get me wrong – these are very important too, but this is often stuff that you’re doing/using already by default. So I was pleased to see stuff on banking and name registration here.

Thank you for this very useful article!

Sara

December 10th, 2009

Good Article, although I would think that #4 should be your #2. Along with starting a website, getting your business card designe and printed d with the same basic information is equally as important. As a person who deals with over 500 businesses a year (and majority of them are small businesses) it always amazes me to see who implements both. I still meet people on a regular basis who have a website but no business cards, or vice versa.

Chris Morata

December 10th, 2009

@Shannon Why did you decide to go with a sole proprietorship as opposed to an LLC? And what would you say is a good rule of thumb in the amount of money you should take out from payments you receive for taxes?

Matteo

December 10th, 2009

Very clever and basic information on the topic. I guess this is pretty much “worldwide” suggestions, right? Does anyone know if there’s any UK-specific post like this? That’d be very helpful. Great job Shannon!

Jon Crim

December 10th, 2009

Hey Shannon, these are some great tips! A good friend of mine started his own freelance company recently and the admin/financial and project management aspects were something that he hadn’t put much thought into – this part seems to be left out by many start-ups. Getting yourself organized is so key for long term success and will definitely pay off.

Murlu

December 10th, 2009

Perfect timing.

I am thinking about launching a freelance company in my town for web design. The competition is very abysmal, they use a ton of table based designs and I’m pretty sure edit photos in MSPaint.

Time to take over!

John (Human3rror)

December 10th, 2009

great! thanks for this. love freshbooks and things.

Mario Awad

December 10th, 2009

Excellent article. We are in the process of starting a small software development company and we’re using Harvest (www.getharvest.com) to track time, invoice, and create proposals… you should check it out. Cheers.

vlado

December 10th, 2009

What is the app on the screenshow below Billing/invoicing?

z0r

December 10th, 2009

Well, “Start a blog” is not a must-have. It’s good but not “blog only” feature – it can be news related to your business, or portfolio or something like that – just your site should be informative and functional and promote your business, not your blog. At least it can showcase upcomming news and events, I think so.

John Wang

December 10th, 2009

This is some great stuff Shannon. I love articles about people taking the plunge. I do disagree with the choosing Sole Proprietorship over another business structure, but that’s a business/personal decision.

My preference is towards a S-Corp or LLC due to the legal options of should you ever get sued, in a Sole Proprietorship and Partnership they can (and probably will) go after your personal assets along with your business assets.

Again, that was the only decision I disagreed with. Well, I kinda have a love-hate relationship with QuickBooks so I do opt for a different option on that end as well.

Great job! Congrats!

kris

December 10th, 2009

Hahahaha. Simple! Do you want hear about this simple way in Poland. Ai dont think so, cause its 3x writing hehe.
Anyway. It some helpfull info for all.
Cheers

Greg

December 10th, 2009

Nice simple article… Can’t forget the Financials and Project Management (though it’s easy to do when you enjoy web work over accounting)

Shannon

December 10th, 2009

@Rochelle Dancel: I noticed the lack of business/admin side of things in most freelance articles as well! It’s such an important part of starting your own business, with many decisions to be made and no one talks about it that much.

@Sara: I suppose the list isn’t in the greatest order for everyone, but this is pretty much the order I went in. I was waay too excited to get the website off the ground, seemed more important than banking solutions at the time ;)

@Chris Morata and @John Wang: I went with a Sole Proprietorship instead of an LLC or S-Corp because I’m starting out small and taking one thing at a time. A Sole Proprietorship didn’t require much red tape, jumping through hoops or crazy paperwork and that’s what fit for me for right now. In the future, I’m sure I’ll make the switch to another type like an LLC in order to protect my assets. But this seemed like the best and most reasonable solution for a gal just starting out. I wanted to be off the ground as soon as I could and I would love to do more research when I switch my company status, to make sure it’s all done right.

@vlado: That screenshot is of the mac version of QuickBooks.

Thanks for the kind words everyone! And I wish all of those just starting out the best of luck!

Waheed Akhtar

December 10th, 2009

Nice article Shannon. I am into freelancing from last 7 years or more than this but never thought to have a freelance company. I think we don’t need necessarily to have a company (or office) for freelance work. We could do it from any where and best we can do from our home.
Correct or guide if I am wrong.

Shannon

December 10th, 2009

@Chris Morata: I see I forgot about your taxes question earlier, sorry about that! I believe you’re asking about year end taxes? You’ll need to plan on doing quarterly or estimated taxes, which is 4 payments per year. And keeping up with that not only helps to avoid a fat fine but it helps to not let it all pile up at the end. Some good IRS reading here: http://www.irs.gov/businesses/small/article/0,,id=110413,00.html Hope that answers your question!

Jay

December 10th, 2009

Step 1. Create a business plan.

Cre8ive Commando

December 10th, 2009

Nice post Shannon :-)

When I started my web design business back in the day I think one of the most important things was branding and networking. Meeting people at various social events and handing out a few business cards can give you some great leads.

Driving some traffic to your site through Google Adwords can also help when you’re starting out along with writing some SEO friendly blog posts.

I found that outsourcing certain parts of projects allows me to handle larger workloads and more complex projects.

Most of my work still comes from word of mouth referrals so I think the main thing is to just get out there! ;-)

Doug S.

December 11th, 2009

Step 1: Come up with a basic business plan that defines your short-term, mid-term and long-term goals, needs, plans all of it.

Step 2: Talk to an economic developer about how best to classify your new business for tax reasons, what sort of government assistance is available and to review your business plan and help you make it viable.

Step 3: Set up your financials, both how you will track them and where you will keep them (your bank account is not where).

Step 4: Hire your employees, if you’re going to have any.

Step 5: Create your branding.

Step 6: Create your website.

Step 7: Begin marketing your new company.

Step 8: Consider a blog.

That’s more like what your order should look like. Blogs, social media, all of that is secondary to everything else. At least, this is the order that business experts who deal with starting new businesses will recommend you do. The best part about economic developers is that they’re usually a free service. They’ll explain to you all the stuff you need to consider with the IRS. There’s a lot of info and you should know it BEFORE you start to make your company.

Damon Bauer

December 11th, 2009

Yes, this is all fine and dandy to get your name out there, but where is the part where you are actively searching for clients? When, between all the blogging, social media-ing, submitting to design galleries, etc, do you work for clients to get money???

In my opinion, this is a big omission of this article – although I think its a great article for the basis, I think gaining work should be at least touched upon somewhere. Good info on the taxes and such!!

Stacie

December 11th, 2009

I enjoyed this article along with the other comments.

Just this year I started a freelance company called Microbrew Media. I think it’s also important to list what the goals for the company are as well as what expenses one will encounter in the first year.

Good luck to all!

Callum Chapman

December 11th, 2009

Great article. I started Circlebox Creative and Circlebox Blog mid-2009, but more of a personal portfolio and hobby. Since then though I’ve quit my job and redeveloped the two sites, I then looked into setting up a business bank account, sorting out taxes and what not. It was a long, confusing and very excitable process!

ranjit

December 11th, 2009

This is some wonderful stuff Shannon.. Really its too informative

Simon

December 11th, 2009

Thanks for the great article. It was very relevant as I recently started my web and graphic design company. I had previously been doing freelance work and have been planning on making this jump for sometime. I would suggest to all you out there who have been having the same thoughts, plan it well and then go for it!

dinesh

December 11th, 2009

Good article Shannon

Imran Arman

December 11th, 2009

These are good information for people like me who are thinking to start their online-business as a freelancer.

Thanks for sharing it.

SonnyDesign

December 11th, 2009

Very informative article and i can relate to this. I started by business a year ago and i haven’t applied some steps in this article but now because of this i can be more organize and ill make sure to apply this steps. Thank you for sharing your experience.

Alex Flueras

December 11th, 2009

Great article, thanks for sharing!

Shannon

December 11th, 2009

Great suggestions from everyone! Creating a business plan with goals and expenses is certainly important. I’m definitely still learning how to better my business and I firmly believe I will continue learning always!

@Damon Bauer: Yes getting clients is tough, and I think should be a whole article all on it’s own! Things that have been helpful for me are word of mouth through friends and family, spreading the word on social media sites, and networking at social events. I’ve also done a bit of cold calling (although it’s not my favorite) and I have tons more ideas to build up a good client base. Hopefully one day word of mouth will be my biggest way to spread the word, it would be nice to put a bit less effort into the finding clients part :) Good luck!

Charles Fabuel

December 11th, 2009

I am developing my own business. It is a good information for me.

Fahdos

December 11th, 2009

humm interesting
I think i’m gonna start my freelance company too :D
thanks and good luck!

rana

December 11th, 2009

nice article, liked it very much. Currently I am an individual and hope to open a company asap. Here, to get jobs easoer, all we should join freelance sites. I have written an article on my blog about my the site i am using for more than a year. read this here if you want:
http://ranacseruet.blogspot.com/2009/12/best-website-for-freelance-jobs.html

saurabh shah

December 11th, 2009

YOU made my day Shannon ! I was looking out something like this and found this…

@damon – Getting client is really tough as Shannon says but i think if you practice your own to find the clients through social sites / blogs / forums / some group.. just connect with that,, use them share your knowledge there and ask them about the work. Be socialize and do networking, go to events and make the relation with the people and i guess you may find lot of work from all. This is how i have found my clients and still many more secrets ;) Hope this will be helpful to you …Goodluck !

once again Nice article ! :)

Dravalley

December 11th, 2009

nice piece of information. very well laid out. i wanted to start freelancing but this is a more greater encouragement and knowledge boost. thanks!!

PM Hut

December 11th, 2009

I run a Project Management website for over 2 years now and I’ve been exposed to over a 100 PM tools and this is the first time I hear of a PM tool called things.

Anyway, I advise actually using an online tool, they have higher availability and they are built around the concept of collaboration, which is the heart of Project Management.

Chetan Sachdev

December 11th, 2009

Nice article, thanks for sharing. Going to start mine soon :)

Mike Chaffee

December 12th, 2009

I am echoing the many positive comments, Shannon. Nicely done!

In my experience in helping launch startups, getting the bookkeeping started ASAP is important. New business owners tend to overlook expenses. “I didn’t know I could deduct THAT!”

Also, the act of recording transactions, while not the primary purpose for beginning your new business, DOES show that this is not a hobby. You are running it as a professional would…because you ARE a professional.

This saves taxes. Many businesses lose money the first year. If yours is typical, keeping track of all of the expenses could put extra $$$ in your refund!

Bryan

December 12th, 2009

Great article! What is that project management application you featured?

Gary Callaghan

December 12th, 2009

Thanks for this insightful article. Some great tips especially when I’m going to start my own little freelancing business soon, so this will help imensley.

Mark Carter

December 13th, 2009

This is all great stuff on starting up a Freelance business as a web designer. And timely too! Many thanks for that. The Business and Administrative stuff were especially useful pointers.

Waasys

December 13th, 2009

being a freelancer is an art!

Paul Story

December 14th, 2009

Thanks for the great article. Another point that I think gets missed for those of us who mostly design online is to remember print marketing as well. Especially in your local area. If you are trying to pick up small business clients, getting signed up with your local Chamber of Commerce is always a good idea as well.

shekhar

December 15th, 2009

really helpful guide. thanx

Nick Ryan

December 15th, 2009

I think you laid out a good plan to build a strong foundation.

Chris McCorkle

December 16th, 2009

“Step 1: Find a Business Name”

Using just your name is good, but appending your specialty is better. “Chris McCorkle, Web Designer” is much better than “Chris McCorkle.”

“Step 2: Create a Website”

Don’t delay this step just because you don’t want to take on the task of SEO, marketing, etc. Start out with a simple website containing your specialty, bio, contact info, and examples of work. Then, as you get used to your site, add more work, fresh content, and search your favorite design and marketing blogs for quick tips on SEO and marketing yourself on the web.

“Step 3: Start a Blog”

Once you’ve set up step #2, or even while you’re in the process of setting it up, a regularly updated blog is a healthy blog- especially when you write great content. Don’t burn yourself out trying to get your posts on the web. Although social bookmarking sites play a key role in driving traffic to your blog, spending all of your time and energy writing blog posts (unless -writing- is your specialty) may wear you out. Don’t lose focus. Let the blog HELP out your main site. Two new clients are far more valuable than twenty hits on your blog!

“Step 5: Get Your Social Media on”

Another key player in driving traffic to your site, a presence on Twitter, Facebook, et al is never to be overlooked by anyone looking to convert visitors into clients. As I mentioned above, it’s important to concentrate your efforts on that which makes you money: your new clients and work! If you’re still without deposits, contracts, and work, spend some more time in this area of the web. Just drop your links when it’s warranted, and don’t spam!

Good luck, new designers. I did it… and so can you.

Marco Barbosa

December 16th, 2009

Very useful Shannon!

Thank you!

Damon

December 18th, 2009

@shannon & saurabh -

You guys are right – finding clients and such should probably be an article in and of itself. I think the premise of the post is good, so thanks for a nice read Shannon.

naveed ahmad

December 20th, 2009

thank you so much for this great and usefull article i am also going towards this direction and you have mentioned some very usefull steps :)
thanks alot

gastonmdq

December 22nd, 2009

Excellent article shannon im starting my own project with a friend so this article it very useful!

thanks a lot

Doru Catana

December 22nd, 2009

first I would like to say thank you for the great article.

second I would like to mention one aspect that most people do wrong.

they all say, plan, plan, plan. then they plan for 1 week, 2 weeks and when it comes to do the work they slack, they don’t do it.

instead I would recommend plan simple guidelines, don’t get caught up in details, they won’t count in the big picture, after that get to work.

Main steps in the whole work process:

1. PROMOTING PROMOTING PROMOTING
2. DELIVER DELIVER DELIVER

hope my message ads even more quality to this great article and hope you guys crush the competition.

good luck.

Doru Catana

December 23rd, 2009

I forgot to mention one thing!

I recommend you use basecamp as a project management tool.

You might say I am a basecamp junky.

They have a FREE version also. At first you will not see it. It’s a tiny link. Most people don’t see it.

In case you are having problems locating it just press Ctrl+F and type FREE.

I also use GoPlan which is very similar, but BaseCamp looks cooler. :)

Now get to work people.

And one final addon:

“Motivation gets you started, habit keeps you going.”

Austin

December 24th, 2009

Great guide! Maybe you should throw in a step thats ‘Get to work’. A large part of starting a business is actually delivering to your clients so that they recommend new clients to you or come back with other projects.

Phil

June 1st, 2010

How about actually going out the door and get to learn people face2face. Tell everyone about who you are, what you do and why it should matter to them! I personally love to throw around business cards and see where my day ends :)

sugiarto

June 26th, 2010

Thanks, for the article. I am also a freelancer

Cima

July 16th, 2010

Thanks Shannon…This article is really helpful

Gjergji Kokushta

July 18th, 2010

I love CurdBe. That’s what I use for sending out my invoices. Nice article Shanon!

cory williams

July 26th, 2010

very well constructed..thx!!

Tyrone

March 23rd, 2011

Nice article, but I think a lot of people who write about setting up as a freelance designer miss the most important part. Dedication and a commitment to succeed without this many freelancers will fail or fall short of their goals.

shane

June 12th, 2011

this article is very heplful.I am starting freelance business so I need guidance on entire process required i have done one website but there is no planning jst doing it.so may need your help liked your article

christaG

July 16th, 2011

Thanks Guys! This was very insightful.

Mickey Bobst

August 25th, 2011

I’m a site crazed individual and i also want to go through interesting website for instance your own property.

Brian

September 1st, 2011

what about finding leads? making sales? doing work?

ajay

September 1st, 2011

Thanks, a lot for this.

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