With the world at a standstill due to the COVID-19 crisis and countless creatives out of work, many people who have never considered starting a business are turning their eyes to entrepreneurship. Whether you’re interested in starting a full-fledged business from home or freelancing to make ends meet, working for yourself is a powerful way to reclaim control in times of economic uncertainty. But before you enter the world of entrepreneurship, there are a few things you need to consider.
Legal and Logistical Steps to Start a Business
Working as a freelancer is simple. Freelancers who work under their own name don’t need to register their business or file for tax permits. Legally speaking, all you need to get started as a freelancer is a Social Security number and an IRS Form W-9. At the end of the year, you’ll receive forms 1099-MISC from clients in order to file your taxes, but you’re responsible for making your own estimated tax payments throughout the year.
If you intend to work under a trade name, incorporate as an LLC or other business entity, or hire employees, starting your business becomes more complicated. The Small Business Administration offers a guide to walk you through the process of formally registering a business.
How to Set Up a Home Office
After establishing your business as a legal entity, the next step is setting up your home office. This can be a major expense for creatives who rely on specialized tools and software for their job. In addition to software licensing fees, entrepreneurs need to invest in media workstations like APEXX desktops from BOXX that are equipped to handle the complex applications and demanding workflows that are so integral to a creative’s work.
Other home office expenses include business-grade internet service, an ergonomic desk setup, and core business software like accounting, project management, social media marketing, and website-building apps.
And How to Pay for It
All these expenses add up to a considerable sum. If you don’t have the cash on hand, turn to small business financing so you don’t have to wait to get your venture off the ground. Traditional financing options include small business loans and equipment financing, but many budding entrepreneurs are turning to alternative financing instead. Whether it’s microloans from nonprofit lenders, peer-to-peer lending, or crowdfunding, alternative funding sources support entrepreneurs who don’t meet the criteria for conventional lending due to low credit scores or a lack of business history.
Are Employees Worth the Hassle?
Hiring employees isn’t on the radar of most creatives running a business from home. Labor is a major expense for small business owners, not to mention the struggle of making space for an employee in a small home office.
However, doing everything yourself can be a mistake, too. Entrepreneurs spend a lot of time on tasks that don’t pay but are essential to keep the business running. While this may be manageable at first, most self-employed creatives find they can’t keep up with administrative tasks as their client list grows.
Freelancers offer an affordable and convenient alternative to home-based creatives. Not only is hiring freelancers a commitment-free way to staff your business and access specialists like web developers and graphic designers, but using remote freelancers also eliminates the need for office space. And with freelance job boards like Upwork, business owners can do all their hiring and interviewing online.
Hiring remotely does pose its challenges, however — the biggest of which is communication. While it’s important not to micromanage an independent contractor’s work, effective communication is key to a good working relationship. In addition to project management tools like Asana and Trello, Slack is a godsend for remote teams. With the ability to create both team-wide and project-specific chat channels, Slack lets you stay in touch and stay organized.
Once all these matters are in order, the final hurdle is finding your first paying clients. Whether you reach out to local businesses or find your first clients online, make sure you’re prepared to make a strong first impression with a portfolio of past work and references from previous clients. After landing your first gig, it won’t be long before you’ve built a reputation for your business in the creative sphere.
Image via Unsplash
Marcus Lansky was born with a spinal condition so severe that his parents were told he would never walk. Despite the odds against him, he learned to walk with the help of countless doctors, physical therapists, and cheerleaders. He specializes in helping people with disabilities start their own businesses. Learn more at Abilitator