How to start a freelance business and keep your day job: 10 Steps

A comprehensive guide to starting a successful side business before you make your startup dream a full-time reality.
You want to start a business. You need to start a business. But you're not quite ready to quit your job and take the plunge.
Don't feel bad--here's one reason you should feel that way.
Fortunately, there's a great alternative: starting your own business while keeping your day job.
The following is a guest post from Ryan Robinson, an entrepreneur and marketer who teaches people how to create meaningful self-employed careers. (His online courses "The Launch While Working Formula" and "Writing a Winning Freelance Proposal" can teach you how to start and grow your own business while working a full-time job.)
Here's Ryan:
Of all the side businesses you can effectively grow while keeping your day job, freelancing is one of the most feasible. At its core, you're essentially using your skills--the tasks and abilities you've already mastered--to take on contract work and augment your income. What's more, it's attractive for many reasons beyond just the money.
But, before getting started with your freelance business, you need to get very clear on why you want to freelance in the first place. Once you have your goals in mind, how you use your limited amount of time will greatly determine your level of success with freelancing.
1. Define Your Goals.
Without clearly defined, easily measurable goals, you're going to have a very difficult time getting to where you want to go.
  • Is freelancing a path to just earning extra income on the side of your day job?
  • Do you eventually want to become a full-time freelancer because of the lifestyle benefits of being your own boss?
  • Are you looking to use freelancing as a steppingstone to eventually achieving a different goal entirely?
Regardless of what your ultimate goal is, you need to make it abundantly clear. Take the time to understand why you're considering starting a freelance business, and make sure it's the right move in your progression toward achieving your bigger-picture goal.
Let's say your bigger-picture goal is to become a fully self-employed freelancer. You'll set your own hours, decide whom you want to work with, and call all the shots in your business. Now, how do you get there?
You know that you'll need to get your freelance income up to a sustainable, healthy level that allows you to eventually quit your day job without stress about where your next paycheck is going to come from. Because I've quit my day job too early in the past, my personal rule is that I must reach a side income of at least 75 percent of what my salaried job pays me, before even considering quitting to pursue my side business full time.
Starting with your freelance income target, based on your living expenses, risk tolerance, and realistic expectations on how long your savings can sustain you, now you can back into a rough idea of how many clients you'll need (and what you'll have to charge them), before making it to the point where you'll be able to leave your day job to freelance full time.
2. Find a Profitable Niche.
Let's assume you're a graphic designer by trade, or you've at least been building your skills with Adobe Illustrator and Photoshop in your free time. Clearly, there are a lot of competitors in your industry who will be willing to charge much lower rates than you, no matter what you do. There are people from all around the world with lower costs of living who will always be willing to accept lesser-paid gigs than you. Get over the idea of trying to compete on price as a freelancer, right now.
It's not worth racing other people to the bottom, especially when sites like Fiverr and Upwork already have countless options for low-priced freelancers. Side note: I recommend not ever listing your services on either of those sites, unless you absolutely need to (after striking out trying everything in this post).
By taking the time to find a profitable niche for your freelance business, you're actively seeking out an industry and type of client that value quality. When you're in a space that competes on quality, you'll completely change the ways that you sell your services. You'll be competing on value, not price.
Instead of taking any graphic design project that comes your way, choose to concentrate solely on infographic design for startup blogs, or e-book layouts for enterprise tech companies. Choose an area that genuinely interests you, and focus on becoming the best designer in that narrow space.
Once you've made yourself invaluable within your niche, you'll have a platform by which you can expand your freelance business in any direction you'd like.
3. Identify Your Target Clients.
Attracting the right types of clients for your freelance business is just as important as finding a profitable niche.
As you're getting started, it's fine to take a bit more of a shotgun approach to landing a few gigs. Make some initial assumptions about whom you want to work with and target them first. After working with a few of them, you'll develop a very clear sense of whether to continue pursuing similar clients.
In my freelance business, I've honed my target client profile over time to matching only two very specific types of businesses: high-growth tech startups and business influencers with well-established personal brands. The primary reasons I've narrowed the focus of my freelance business this far are because I work best with these types of (very similar) clients, and they run in similar circles that lead to frequent referrals. I'm building my reputation within my niche.
This is a difficult decision to make at first, because it means turning away a lot of business. However, the process of narrowing your target clients to those you work with best will help you achieve much better results in the long run. Once you have a few clients that are willing to advocate for you, the momentum will really pick up.
Going back to our focus of competing on value, not price, everything you do in regard to starting your freelance business--especially when you have a very limited amount of free time--needs to point back to your ability to deliver the highest-quality results for your clients. As one of my freelance idols, Paul Jarvis, so eloquently put it over on the CreativeLive blog, "make your clients so happy & successful that they become your sales force."
Your goal is to build your authority and eventually be seen as the go-to resource for a specific type of client. By appealing so well to a narrow (well-selected) niche, your target clients will have a very quick path to deciding that you're the best person to help them with their projects. This, above all else, is the path to charging premium rates without anyone batting an eye at the first prices you throw out.
To determine the best types of target clients for your freelance business, ask yourself these three questions:
  • Which businesses will find my services useful?
  • Which businesses can afford to pay the prices I'll need to charge, in order to get to my income goal?
  • Who are the decision makers within these businesses, and what can I learn about their demographics and interests? Can I find a way to connect with them on a personal level?
My target clients--smaller startup teams and founders with personal brands--can instantly relate to me because of my personal affinity to startups. Because my portfolio work is directly applicable to what they do, they also start out with much more confidence that I'll be able to drive similar results for their business, too.
4. Set Strategic Prices for Your Services.
I've spoken a lot about setting the right prices for your freelance business. I even architected an infographic over on CreativeLive that walks you through the process of setting your freelance hourly rate.
From a pure numbers perspective, this calculator from MotiveApp is as good as it gets for determining what your hourly rate needs to be, in order to meet your income goals and expense levels. It's a great tool for double-checking that you're charging enough to afford the lifestyle you want to live, but I recommend determining your pricing strategy with a very different progression in mind. Remember, you need to price yourself on the basis of the value you deliver--not on the basis of what your competitors are charging.
Don't allow anyone else to dictate the terms by which you define your value. That's not what freelancing is about.
In this post on his blog, Neil Patel chronicles many of the lessons he learned while running an SEO consulting business. A lesson that stood out for me is that the more you charge, the less clients complain. Because Patel very astutely selected target clients that have big budgets, he knows that they're much more willing to spend money--in order to make that money back through investing in your services. Smaller clients, on the other hand, often don't have as much money to play with, and thus can't sustain much in terms of losses when projects don't deliver big returns.
There's no such thing as prices that are too high. Your prices may be too high (or too low) for the types of clients you're targeting, but if you do your homework when deciding whom to pitch your services to, you'll be selling exactly what your clients need--for a price they can justify.
For my freelance content marketing services, I write well-researched, in-depth blog content for my clients. Most of my content is in the range of 1,500 to 2,500 words per piece, and designed to rank well in organic search results, which is extremely valuable for most businesses. Because my work extends beyond just writing, and into strategic distribution and driving traffic after the content publishes, I add a lot more value for my clients than any other "writer" can bring to the table. Back when I decided to start a business, I knew that I wanted to target premium clients that would pay more for that extra value.
They're going to hire someone to help with their projects, so it's just a matter of showing them you're the right person to help. Price becomes a secondary concern, if they're already convinced that you're the best person for the job. It's business and they'll make it work, or it wasn't meant to be.
5. Build a High-Quality Portfolio Website.
Because I'm such a huge advocate of creating a powerful online presence to support a freelance business, I brought in an expert, Laurence Bradford, to share all of the essential elements to building a freelance portfolio that wins you high-value clients.
As a starting point, let's understand what the purpose of having a portfolio website is. It's often the first impression a potential client will have of you, your style, your work, and the past clients (or companies) you've worked with. You need to effectively communicate the services you offer, and who they're for. Beyond that, you need to sell why you're the best person for this type of work--for the clients you want to work with.
Straight from Laurence, here's what every freelance portfolio needs to do to be truly effective at selling your services:
  • Communicate your specialty and display examples of your work.
  • List your contact information and show off your personality.
  • Highlight your relevant skills, education, and accomplishments.
  • Display testimonials (even if they're from co-workers or former bosses when you're just getting started).
  • Have regular updates that show your evolution, new clients, and latest work.
As you're developing your portfolio site, find other freelancers within your space and get some inspiration from them. Uncover how they're positioning themselves and communicating their value propositions, and formulate how to start a freelance business your way.
6. Create Examples of What You Can Deliver (on Your Portfolio Site).
You want your website to serve as a destination to demonstrate your expertise. With that in mind, one of the best ways to show you're in the know within your space is by regularly publishing new content, images, or videos (depending upon the content medium you work in) that will impress your target clients. Once you have an understanding of what your clients need, go out and create examples of that exact type of content--as if you had been hired to produce it--for your website.
There's no better way to sell your services than to already show your clients that you can create what they need. What's more, it will make their projects that much easier when you have a library of related work to pull from for inspiration.
My website is a living example of this. At least once per month, I make a point of publishing a very thorough, 4,000-word-plus blog post on a topic related to starting and growing a profitable side business, the theme of everything on my site.

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