Startup Costs to Consider Before Freelancing

Working in the world of freelance is different. Essentially, you are your own entity, and are entirely responsible for your success. Now to some people, this sounds like paradise and to others, this sounds like a source of tremendous stress. Whatever the emotion freelancing invokes in you, if you are reading this article, chances are you might be interested in learning about going out on your own.

It’s easy to think that freelancing is easy and cheap to do. I’m sure you’ve seen stories of stay at home professionals who have created a luxurious lifestyle for themselves. But as we all know, nothing in life is free and everything in life has its price. Read on to learn the start up costs of freelancing.

Equipment

Ah, the equipment: it’s safe to say that it is a critical piece of any freelancer’s success. Working as a freelancer, you need to provide yourself with the proper equipment so you are able to do business.

This is an obvious cost that has a frustrating way of being forgotten by most inspiring freelancers. Most freelancers come from the 9-5 world where everything is provided for them. When you’re a freelancer, you need to invest in your own equipment which includes printers, computers and expensive software. Don’t forget, your computer doesn’t run on happy thoughts and best intentions — it runs on electricity! Every utility you use at home for your work is costing you money.

Unfortunately, there isn’t any way around this cost, as this is the cost of doing business. Do your research in order to find the best deals available on equipment that is reliable and energy-efficient.

Marketing

You could be the greatest freelancer in the world, but if no one can find you, how can you show off your ability? The answer is, you can’t! Another cost to consider is the expense of proper marketing.

In order to succeed as a freelancer, you need to invest in yourself. Common marketing costs include website development, advertising, video production and even the cost for taking a client out to lunch.

Additionally, you need to consider the value of your time. Any time you spend working on your marketing is essentially unpaid labor. Your time is your most valuable asset as a freelancer; be sure to use it wisely.

Taxes And Insurance

Uncle Sam needs his cut! A cost that many freelancers forget to consider is how big of a bite taxes and insurance take from your bottom line. After you receive any payment, be sure to save at least 20% for taxes. This will ensure that you are saving enough money come tax season.

Additionally, as a freelancer you are responsible for your own medical bills. That being said, part of your paycheck needs to go to the insurance companies.

Legal Costs

I know you like to make money working from home but you need to ask yourself, “Am I protected legally?” As a freelancer, you may need to find a good attorney and an accountant. The attorney will keep you away from legal trouble and the accountant will help you find tax deductions for freelancers. These costs are the ones that are commonly overlooked and rarely addressed when starting up as a freelancer.