For many people, freelancing is the first step into self-employment. This is partly because it is easy to start without a big initial financial investment. However, there are some payments that aspiring freelancers should be aware of. We created a brief overview to help you understand how much money you will have to invest to get started as a freelancer.
1. Work Equipment
Most freelancers only need a laptop and Wi-Fi to be ready to go. So, keep those two basic expenses in mind. If you use your private laptop to get started on freelance projects, you should make sure that your computer has enough power for your specific type of work. This can be concerning sufficient storage space on your laptop or an external source, as well as a good graphics card if you are working in video or photo editing. This is also true for your Wi-Fi connection: Make sure that it is fast enough for your working needs.
If you work from home, it is also crucial to have some basic office furniture such as a desk and a desk chair and potentially a second screen, a computer mouse and a keyboard. To support your back and general health, make sure that these have been set up for your individual needs.
Another essential gadget for freelancers is a smartphone. Maybe you are one of the lucky ones who is able to separate their private life from business. If that’s the case: congratulations. Just keep using your private phone and you’ll be fine. However, some people might find it beneficial to have a second phone that is only being used for business purposes. Keep that in mind while calculating your work equipment expenses.
Depending on your field of work, there might be other gadgets and types of equipment not mentioned that are crucial for your success. That is why we recommend preparing a list with every big and small thing you might need to professionally work as a freelancer.
2. Software and Licenses
A lot of freelancers need to get certain licenses to complete their work. Two of the most commonly used programs are probably Microsoft Office and the Adobe Creative Suite, so keep those in mind for your budget. On top of that, there is software that can help with invoicing clients, keeping track of your hours, organizing your work or having sufficient cloud-based storage for your projects. If you use one of them or think they might be helpful in the future, make sure to put some money on the side for those types of accounts and memberships.
Investing in marketing and ads is crucial if you want to build a solid client base. Therefore, you should consider social media ads or other advertisements in your budget. Another important aspect is always carrying business cards, since you never know when you could meet a potential new client. Finally, hosting your own website is also part of self-marketing. Your website is an easy way to showcase your work and to help new clients to get in contact with you. But you will have to pay for hosting and potentially even a web designer. Keep that in mind when calculating your finances.
4. Business Trips, Seminars & Accountant
Last but not least, have a think about potential seminars and classes you would like to take to broaden your knowledge and be even more desirable for clients. These have just as much to be paid for, as business trips to meet clients or to visit events and gatherings for networking. Finally, there might come a point in time when doing your own taxes is not profitable anymore. The time you spend doing your taxes could potentially be better used for actual work. As soon as you reach that point, consider getting an accountant involved in your business to help you with all the paperwork and with filing your taxes in time.