The job landscape and our relationship to work have both dramatically shifted in the past few years, with the pandemic triggering widespread layoffs, but also increasing remote work options. And as many companies are reversing their hybrid work policies, more people are responding by trading in traditional 9 to 5 positions for the flexibility of freelance life.

Upwork’s Freelance Forward report found that freelancers make up a significant part of the U.S. workforce, about 39%, which is an all-time high. That’s 60 million Americans who contributed $1.35 trillion to the U.S. economy in annual earnings in 2022, up $50 billion from 2021. And that number includes more than just side hustles.

The U.S. Census Bureau reported in 2021 that there were 50% more businesses formed every month during 2021 compared to before the pandemic, with particular gains in sole proprietorships and LLCs. And while the prospect of being your own boss might feel liberating, it’s also a daunting task to suddenly be in charge of every aspect of running a business.

Most art and design schools don’t require students to take any business classes as part of their degree plans, so when designers graduate or transition from an in-house position to freelance, they’re often unsure about what actually goes into the back end of running a business. Fortunately there are a number of resources available that can make that transition to solopreneurship a straightforward process. We spoke to three creative industry pros who explain what’s in and what’s out when it comes to starting a freelance business.

IN: NOT BEING AFRAID TO ASK FOR HELP

When you’re just starting out as a solopreneur or freelancer, it can be hard to clarify the vision for your business or brand without a sounding board or someone to dialogue with objectively. That’s where a business coach can offer invaluable guidance. Holly Howard, founder of Ask Holly How, runs a small business consultancy that specifically caters to creative entrepreneurs.

“Coaching is really beneficial for helping us get clear on what it is we want to achieve in the short term and long term, as well as surfacing our blind spots to use them to grow,” Howard explains. Common blind spots Howard often encounters with clients range from the difficulty of taking action in terms of business development to shifting mindsets they have around money, which can impact how they set their fees. “Part of the coaching relationship is also about offering structure for accountability and helping you to execute goals to build your freelance business,” Howard says.

Howard offers one-on-one coaching, as well as free online resources through her website, podcast, and newsletter. She also runs a set of business growth workshops that teach about the fundamentals of business, from setting a long term vision to marketing and sales planning to creating a financial plan or building systems within your business that ensure you have an infrastructure for how it operates.

She recommends reaching out to your city’s Economic Development Corporation or similar small business organizations that often offer pro bono services. “There are a lot of affordable, if not entirely free, resources available right in your local community that are often underutilized by freelancers because they just aren’t aware of what’s available,” Howard says.

OUT: UNDERCHARGING FOR YOUR SERVICES

Setting fees and understanding the value that those rates bring to your services is one of the most important things a freelancer can do to run a successful business. Howard says people tend to hit roadblocks in freelance life because they consistently undercharge for their services, not taking costs into account associated with taxes and health insurance and the additional overhead that a freelance business requires like software, subscriptions fees, office equipment or studio rent.

Getting clear on what services you actually want to offer can also help you identify the types of clients that would benefit from those services. If you’re a graphic designer, what does that really mean? Are you looking to specialize in package design? Or maybe your focus is presentation design. “If you’re not clear on exactly how you’re setting your services, it’s even harder to connect to the right types of clients,” Howard says, “Define your services, and really know the benefits of your services so you know how to charge an appropriate rate.”

IN: TAKING THE TIME TO TOUCH GRASS

Howard says one of the most important questions freelancers should ask themselves is, how do you want to spend your day? “Sometimes we think oh, I’ll just go out on my own and be creative all day long. But that isn’t the reality of what it means to be a freelancer,” she explains. Invoicing, setting up contracts, outlining deliverables, all the technical and administrative aspects of the job, take up a much bigger percentage of our time than we realize.

So to avoid freelance burnout, it’s essential to create a balance between life and Iwork, especially when that work often takes place in your living space. Creating balance might mean scheduling breaks throughout the day to get outside, stretch, or just allowing yourself to unplug in whatever way that works best for you. After all, you’re the boss, so you set the hours for when you’re on the clock.

OUT: MIXING BUSINESS WITH PERSONAL

It may not seem necessary when you first start freelancing, but you’ll save yourself a lot of headaches come tax time if you set up a business bank account that’s separate from your personal account, and treat them as separate entities right from the beginning. Claire Van Holland, CEO of CV Ledger, an accountancy for creatives, says that even if you’re not registered as a sole proprietorship or a DBA yet, starting the process of separating your business income from your personal income will make tax time much less stressful.

“Getting in this practice from the start will help ensure that all business transactions, whether it’s money incoming or outgoing, all live within the same place. And having a better understanding of how your money flows in and flows out will ultimately be what helps you to make more money in the long run,” Van Holland explains.

IN: POWER THROUGH KNOWLEDGE  

For a lot of creatives there’s a barrier to learning and understanding basic financial concepts because it’s not something that’s typically taught in design school. And not everyone can afford to work with a dedicated accountant, especially freelancers starting out with a limited budget. Van Holland, who’s a creative herself, has made it her mission to disseminate concepts around accounting, financials, business finance and strategy in ways that people can easily understand and access.

CV Ledger holds a free monthly “Office Hours” video session, where freelancers can sign up to ask bookkeeping and accounting questions and Van Holland also hosts the podcast Naked Finance that tackles different topics around money management and small business finance. “There is this stigma with money,” Van Holland says, “so the mission of CV Ledger and the podcast is to give people a chance to understand money, and empower themselves by taking the actionable steps to run their money without fear and anxiety.”

She also offers coaching sessions to show people how to manage their bookkeeping themselves if they’re not ready to work with an accountant yet. “Working one-on-one with clients can help them get comfortable with the right accounting software and understand how to run their finances, so that when they do hand it off to a professional, they actually know how their money should be managed, and that it doesn’t fall into the wrong hands,” Van Holland explains.

IN: FINDING SOLIDARITY AMONG YOUR PEERS

The pandemic undoubtedly changed the way people think about work, especially in building solidarity through union movements, but freelancers may not realize that there’s also a union for independent workers. The Freelancers Union provides resources, advocacy, and support to freelancers as they navigate the ever-evolving gig economy. Their advocacy has achieved some big wins like passing legislation that protects freelancers from non-payment in cities like New York, Seattle and Los Angeles.

Founded in 1995, the Freelancer’s Union has grown to represent over 600,000 members across the United States, spanning various industries and professions. Executive Director Rafael Espinal says that since the pandemic began, they’ve seen a significant increase in membership. “Over 200,000 freelancers have turned to the organization since March of 2020, which can be attributed to the rising number of individuals turning to freelance work in response to being laid-off, remote work opportunities, and the search for more flexible career options,”  Espinal says.

What are the benefits of joining the union? Members gain access to a community of like-minded professionals, networking opportunities, and valuable educational resources, including webinars and articles on topics like budgeting for taxes, or understanding the legal aspects of contracts and intellectual property. The Union also runs a free co-working space dubbed the Freelancers HUB in Industry City Brooklyn, in partnership with the City of New York. Members can also access affordable healthcare options through the union’s insurance portal, as well as discounts and special offers from partner organizations.

Espinal says that beyond understanding essential business strategies and how to prepare a strong contract, the best thing solopreneurs can do to succeed in their careers is to reach out to fellow freelancers, join online communities, and attend industry events to make connections with peers as well as potential clients. Holly Howard agrees.“The growth of your business really depends on building relationships,” she says, “it’s about fostering connections one interaction at a time. There’s really no shortcut for that.”