Even if it’s passion for your craft that propels you forward day after day as a freelancer, it’s important to recognize that beyond being a talented writer, web designer or architect, you’re business owner, too. While you may not enjoy things like reading contracts and tackling bookkeeping, you’ve got to give them some attention or your business won’t be sustainable.
Recently, I asked Andrew Sherman, a partner in the law firm Jones Day, for his advice to readers of the $200KFreelancer, who want to build successful businesses. He’s guided many firms, both large and small, and is a prolific author of books such as the recent one, Harvesting Intangible Assets, a guide to unlocking the value of your company’s intellectual property. Here are his tips for building a thriving business as a freelancer.
Define your niche. Specializing in a particular area and becoming known for that expertise is a smart route to building a thriving career as a freelancer, says Sherman. It’s important to spend some times figuring out what services it makes the most sense to deliver to the marketplace, so you can make the most of your time. “Just because you’re a freelancer, it doesn’t mean you shouldn’t have a business plan,” he says.
Do a risk assessment. Get advice from trusted professionals such as your lawyer and accountant on whether you need to set up a separate business entity, such as a corporation or LLC, to protect yourself from legal liabilities, he advises. “If you start doing big projects, you may want to look into errors and omissions insurance, he adds.
Know your rights. Many freelancers sign work-for-hire agreements and other contracts regularly. Make sure that you understand who owns the work you’re doing for a client, so there’s no misunderstanding later.”If the hiring party does not assign specific rights to the intellectual property you’re creating, you own it,” says Sherman. “That’s an important thing to understand.” There may be times when you can piggyback on work you’ve already done for a client–but only if you own the rights.