How to Build a Freelance Business Instead of Working a Freelance Job

Learn how to build a freelance business instead of working a freelance job in the FREE Six-Figure Freelancer audio course, with Preston Lee, founder of Millo.co 

“Work for yourself”, they said. 

“Be your own boss and you’ll never punch a clock again”, they told us. 

“Set your own hours and work on the beach, sipping Cuervo as a guitar ensemble plays mariachi covers of your favorite ‘90s dance hits”, they promised.

Well? Has it worked out for you? Are you living the dream yet? It’s certain that some of you are. But a lot of freelancers end up trading one job for another. They may not punch a clock anymore, but they’re still trading hours for dollars. They may be their own boss, but if they don’t treat themselves like a traditional boss would, they won’t get paid. Freelancing is a wonderful way to make a living, but if you treat it like a job, you’re limiting yourself unnecessarily.

There are differences, of course. When you freelance, if you want a raise, you can scale your rates. You can go out and get more clients. If you want to take an extended vacation you don’t need to check with your teammates and get three levels of management to sign off on the request. Freelancing as a job affords you freedom that a traditional job doesn’t.

But you’re still caught in a fulfillment trap. You’re still tasked with projects that you have to complete, under deadline, or risk being fired. The only difference is who does the firing. All the while, you’re trying to network, build contacts, and find that next job (and the next job, and the next job) so that you aren’t forced to eat ramen at every meal and sleep in your car.

So why trade a traditional job for a freelance job when you can build a freelance business instead?

For one, many people don’t know the difference.

How is a Freelance Business Different From a Freelancing Job

Freelancers often talk about how they’re building their freelance business, but then continue the relentless exchange of time for money. They’re either working for their hourly rate, or they’re engaging in the daily grunt work of running their business and getting paid nothing in the process. In both cases, they’re working a job first, and building a business second.

A true freelancing business has components that run themselves. Units of work that you don’t need to do, but that still get done. Businesses feature a degree of automation.

Consider a traditional company. The owner doesn’t do all the work herself. She has employees that run parts of the business for her so that she can focus elsewhere. The CEO doesn’t fulfill. She has other people to do that. And she establishes processes that take care of the day-to-day minutia for her. A CEO looks at the big picture and leaves fulfillment to her employees.

As a freelancer, you don’t have employees. At least not right away. But you can still approach your business as a CEO instead of an employee. You can build in automation that relieves you of the repetitive tasks that don’t make you any money. You can outsource work that doesn’t allow you to maximize your income. You can use processes, in place of employees, to work smarter instead of harder.

Otherwise, you’re just a person that works a lot of different jobs. You’re a bookkeeper. You’re a secretary. You’re a marketing consultant. You’re a janitor (probably). And last, and often least, you’re a [insert your chosen freelancing job here]. Be a business owner instead, and find better ways to get some of these jobs completed.

Automation and Outsourcing Are the Keys

It’s worth defining a few terms before we continue. 

Automation involves creating processes or finding tools that streamline the parts of your freelancing business that are critical to your success, but that can burn a lot of your time, that you have to do over and over again, and that don’t actually have a direct effect on your profitability. 

These tasks are called non-differentiating work because they do nothing to elevate you above the competition. Every business on the planet has to perform these same functions. The smart ones figure out ways to get this work done as quickly and as efficiently as possible so that they can focus on work that makes them better.

Outsourcing, on the other hand, involves hiring subcontractors, or other freelancers that work for less than you, to do some of the grunt work that keeps you from billing at your maximum rate. You want to outsource work that you aren’t good at or work that takes up too much of your time. 

Outsourcing work is like hiring employees, but you don’t have to deal with all of the hassles. And you can still work in your underwear without underlings buzzing around, judging you.

How to Automate Your Business

The first step is to dissect everything you do on a daily, weekly, and monthly basis, and look for repetitive tasks. Make a list of everything you do repeatedly, on every project, with every client. These are the areas you want to automate. You want to create “set-it-and-forget-it” processes that guarantee the tasks get done and get done as efficiently as possible.

When you onboard a new client, you likely collect a lot of the same information each time. Instead of doing this manually you could create a web form that asks the questions for you. You could include a link to it inside of your welcome email, which should itself be largely formulaic to save extra time.

You could craft a project completion process that automatically sends out an email asking your client for feedback and a review so that you don’t have to remember to do it yourself. You can also take advantage of the myriad tools available online.

With Calendly links included in your cold emails, prospects can instantly set up a call with you that fits into your schedule. Reply.io and other services let you automate email responses so that you never forget to follow up with potential clients. There are tools that help you scale email campaigns, automatically capture leads from your web traffic, and help you skim contact information for key decision-makers from the websites you visit.

Using a combination of processes and software tools can get the backend of your business humming so that you don’t need to pay nearly as much attention to it as you likely do now.

The Benefits of Outsourcing

Let’s say you bill at $100 an hour. If you spent 20 hours a month on your bookkeeping, that’s $2,000 of billable time that you can’t charge to clients. 

Imagine if, instead, you hired a freelance bookkeeper at $50 an hour. Not only is their hourly rate lower, but they’re also expert bookkeepers, so they work faster than you can. If it takes them 15 hours instead of 20, you’ll end up paying them $750 to do the work, freeing you to bill your 20 hours to clients. In the end, you net a positive income of $1,250, the difference between $2,000 and $750. And you never have to spend your time doing #$%& bookkeeping again!

Outsourcing lets you bill more of your time at your highest rate, increasing your income and relieving you of the drudgery that comes with running a business.

And it doesn’t have to end there. You can outsource your freelance work, too. Writers can hire lower-billing freelancers to write the projects they don’t have time to fulfill themselves. Designers can work with other designers to take the projects they don’t enjoy.

Outsourcing to other freelancers lets you take on extra projects, adding a modest markup so that you make money without having to do the work yourself. You can scale your business far beyond your own capacity using outsourced labor, which guarantees you an ever-increasing income.

You Are Not Your Business

The best way to sum up what it takes to build a business instead of working a freelance job is that you need to work ON your business, not IN your business. You need to work on a business structure that takes as much work off of your plate as possible. And one that guarantees a steady, reliable flow of revenue.

This requires intentional focus. Hoping for the best never built an empire. It’s not enough just to do good work and hope that your clients will pass your name around. You need to intentionally create incentives for them to generate that word of mouth.

You can’t go to the occasional networking mixer and send a few cold emails a week and hope they sprout into clients. You need to do the math and create a plan that generates a predictable number of leads each month, and then converts enough of those to fill your pipeline so that you aren’t always worried about where the next project will come from.

You need to automate what you can, outsource whenever possible, and eventually hire other people to do the work that you do so that your business can tackle more projects than you could ever handle on your own. 

Building a successful freelance business means scaling it beyond you so that eventually it can run fairly effectively on its own. 

This won’t happen overnight, but if you put the right pieces in place and scale them consistently, you will one day find yourself on a beach, swilling Cerveza, and checking in on your automated business while the sweet strains of “Groove Está en el Corazón” lilt lazily from a group of nearby guitars. 

And then you’ll know you’ve arrived.