Freelance your way to starting a business

How contract work could help fund your startup

This is Part 2 of a 4-part series about saving for a small business. Just joining in? Read Part 1.

You’ve just learned that with some smart saving and planning, you can self-fund your startup without a small business loan. Another way you can earn and save the money you need to launch your startup is freelancing.

There are many benefits, and the flexibility that comes with freelancing can be appealing. You might have the freedom to set your own schedule and choose the job you want. And now, there are even more options out there to help you save to start your business. It’s also important to consider potential downsides, such as an unreliable income and lack of benefits.1

How to start freelancing

More and more people are finding work online, so they can do what they love without being tied to an office. Thanks to this trend, you might find it’s easier than ever to find contract work. 

When you need to make extra money to boost your startup savings, there are lots of freelancer tips and tricks to help you find work. But one of the easiest ways is searching for an online platform that fits your  experience and specialty.

  1. Simply Hired is a platform that accommodates just about any field of work. Whether you’re a nurse or an accountant, you’ll be able to find contact work easily. It’s connected to job boards all around the world, so you can find what you need to get working quickly.
  2. Fiverr is a marketplace for digital services, and it takes on a unique approach. Rather than having you respond to job posts, you can create your own job based on what you’re good at. You basically become a seller of your services. On the flip side, Fiverr is also great for business owners who are working with a tight budget because they can find contract workers at an affordable rate.
  3. 99designs is a platform specifically for freelance designers. If you’re a skilled graphic designer and you love branding of all types, this could be a great option for you to make extra money.
  4. Toptal is geared toward offering top-tier digital services. Toptal claims its freelancers include some of the best software developers, designers and finance experts in the world. By working for some of the biggest companies around the globe, you could establish relationships that will give you a chance to have consistent freelance income on the side once you go full-time with your new business.

Good, old-fashioned networking can also open up freelancing opportunities. Tell friends, family and colleagues you’re looking for freelance work and post to your network on social media. You never know who they may know. Put the word out there, and you could start saving those freelancing dollars for your startup before you know it.

How to manage your freelance earnings

You might be tempted to use your extra income for something other than your small business. To help yourself set limits, you could consider the following steps:

  1. First, if you’re keeping your full-time job, ensure you’ll still be getting your monthly income. Talk with your employer about your freelance work. Make sure there aren’t any conflicts of interest that could lead to trouble down the line.
  2. Set up a savings account that’s specifically meant for your future business. It will help you keep track of your money and separate your personal savings from your business needs.
  3. Consider setting up automatic transfers or direct deposits to savings to make sure you’re always saving for your startup.
  4. Once your savings plan is set, be persistent about keeping track of your finances so you don’t run into issues once tax season rolls around.

Save some for tax season

When you freelance, you might be paid for jobs with no taxes withheld. That means you could be responsible for making tax payments. Consider setting some aside money from each job in your savings account to handle those. Be diligent about estimating the taxes you may owe. And consider reaching out to a tax professional to be on the safe side.

Freelancing is a great option for you to make money on the side so you can save to start your business. Keep working hard by consistently putting money away, working extra freelance hours and keeping your goal in mind, and you can make it happen.

In Part 3 of the series, see how you can save by skipping a storefront and launching a successful online retail business.

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