How to get started as a freelancer - part 2
This is part of a series. Here is part 1.
Part 2: Taking the jump
One you feel you are ready to quit your job and get started as a freelancer, you should do the following:
- Get a Charted Accountant (CA) and perhaps also a lawyer – The legal and accounting work is actually very minimal. You can start as a proprietorship without registering yourself as a company. Later if your business grows, you can register as a private limited or an LLP. Any good CA will advice you when to make the switch. However, at all times you should have a CA and a lawyer who you can call for any advice. CA will be needed more frequently.
- Learn to keep accounts – this is basically the only regulatory requirement. At the very least, you can keep a list of all payments received from clients and any business expense you are incurring in an Excel sheet. You should keep paper copies of all your invoices and IFRC certificates (issued by banks for any payments received from outside India). If you are doing a lot of transactions, it is better to hire an accountant who will maintain the accounts in Tally. At the end of the financial year, you should hand over all the accounts details to the CA for him to do an audit and file returns for you.
- Prepare an NDA and a contract template – Before starting any project discussions, any serious client will ask you to sign an NDA (Non-disclosure agreement) which basically says you will keep all discussions confidential. Some may present their own NDA which you should sign and return to them. A contract or an agreement is signed when both of you agree to work together. It specifies the terms and conditions of engagement like how much the client will pay you, how often you can invoice, how long will the project will run, any penalties for breaking the agreed terms, etc. You should keep a template contract ready in case your client does not have one. Both of you should sign it after discussions but before starting any work.
- Set your price – The price in the market varies a lot depending on experience, quality or sometimes just randomly. You will have to set a price – it can be a range. Typically prices are quoted in Dollars per hour to foreign clients and Rupees per hour or Rupees per day to Indian clients. Always charge for your time (per hour or per day) rather than a fixed cost. You may have to add service tax on top of your price for Indian clients – ask your CA.
- Find a senior freelancer who is willing to outsource or sub-contract parts of a project to you. That is a less risky way to get started. Finding such a person may be difficult. You can try local meet-ups and word of mouth to reach out some experts in your field and ask them for projects.
- Once you are confident of taking on clients on your own, apply for projects directly via various marketplace websites depending on your field.
In the final part, I will cover how to execute once you land a project.
Part 3 is here.