Skip to content
Tweak Your Biz home.
MENUMENU
  • Home
  • Categories
    • Reviews
    • Business
    • Finance
    • Technology
    • Growth
    • Sales
    • Marketing
    • Management
  • Who We Are

How To Set Up A Successful Freelancing Business

By Vic Anandan Published December 12, 2017 Updated March 16, 2023

Freelancing can be an extremely lucrative career option. According to an Upwork study, there are more than

Pick a pricing model

The first step in setting up a successful freelance business is to pick the right price for your services. It is not uncommon for workers to charge an hourly rate for their service. The reason this is so popular is because it is convenient for freelance workers who are switching from traditional jobs to know their baseline income and charge a corresponding hourly fee. But this is risky for several reasons. Firstly, freelancers have higher outgoing expenses in the form of hardware purchase, electricity and other administrative expenses that a regular 9-5 worker may not have. It is important to know your costs and pick an hourly fee that will suitably compensate you over and above these expenses.

But while hourly rates are convenient for the freelancer, they may be confusing for your client who may have no idea how productive you are with your job. From a client’s perspective, it is important to know how much their project will tentatively cost. A fixed per-project fee works better than an hourly rate. Evaluate the pros and cons of these different pricing models and pick one that fits your business requirements.

Set up a sales pipeline

As a freelancer, you are responsible for finding new clients for your business. While outbound marketing techniques like sales calls and advertisements are effective in a traditional business setup, these strategies also consume a lot of time and financial resources; both of which are scarce in the case of a freelancer. Inbound marketing tools like SEO, blogging, social media marketing and email marketing are more effective in setting up a sales pipeline that will ensure a regular flow of new customers into your business. An effective sales pipeline system takes a lot of time to get established though. It is a good idea to chart out an outreach process that will help you gain your initial bunch of customers till your sales pipeline starts working.

Partner with other freelancers/agencies

As a freelancer, you are competing against established agencies and businesses that have larger budgets to expend on customer acquisition. So while a sales pipeline is important for the long term, they may not always be adequate. One way to counter the challenges faced by you as a one-person business is by partnering with other freelancers and agencies who offer complementary products or services. For instance, a freelance web developer may partner with a web designer. This can be productive for two reasons. Firstly, it helps both freelancers grow their businesses by referring clients to each other. More importantly, the two freelancers can, together, make a stronger pitch to a client looking for holistic services. Clients prefer to hire a freelancer or agency who can take care of all their needs. By offering multiple services under the same roof, these freelancers stand a better chance at client acquisition.

Do not engage in a price war

For someone who is just starting out with their freelancing business, you may feel tempted to bid low in order to secure a project. But this strategy is harmful for your business. When you bid low, you put yourself in a price war against other freelancers. This cuts down on the margins for all freelancers in the pool. But more importantly, this strategy only helps you in securing projects from price-sensitive clients who are also typically more demanding. In essence, when you engage in a price war, you are not only bringing your income down to unsustainable levels, you do not leave yourself many resources to acquire more clients.

But securing clients as a new entrant to the market can be a chicken-and-egg problem. Clients do not trust freelancers with no experience. One way to address this is by seeking internships with reputed businesses in the industry. This gives you legitimate experience from reputed firms that may be leveraged for securing new clients. Another way to do this is offer pro-bono work for high value clients. Again, this helps you secure experience from highly established businesses which is worth a lot more than a low priced project from a small price-sensitive client.

Hire trusted third party vendors

As a one-person business, you are required to perform a lot of administrative tasks that take you away from your money making projects. Hiring trusted third party vendors to execute these tasks cost money and as a bootstrapped business owner, you may deem it necessary to cut costs and continue performing those tasks yourselves. But this has a huge opportunity cost. The only way for a freelancer business to succeed is through continuous growth and for this to happen, you must spend as much time as possible on marketing and servicing your clients. Other tasks like managing your accounts, or generating client reports may be taught to a third party who can do these jobs for you.

Freelancing can seem extremely profitable from the outset. However, growing a successful career out of this requires a lot of perseverance and effort. Investing your time in client relationships, pricing your product or service right and executing your projects on time go a long way in building a brand and a successful freelancing business.

Posted in Business

Enjoy the article? Share it:

  • Share on Facebook
  • Share on X
  • Share on LinkedIn
  • Share on Email

Vic Anandan

Vic Anandan is a management consultant specializing in technology benchmarking and certifications. He has over 15 years of experience in the industry and has travelled to over 18 countries so far."

Contact author via email

View all posts by Vic Anandan

Signup for the newsletter

Sign For Our Newsletter To Get Actionable Business Advice

* indicates required
Contents
Pick a pricing model
Set up a sales pipeline
Partner with other freelancers/agencies
Do not engage in a price war
Hire trusted third party vendors

Related Articles

Business
Management

Why Business Leaders Are Prioritizing Mental Health and the Tools They Use

Hanna Kim August 25, 2025
Business
Technology

What Is the Best Email Verification Tool for Cold Email Outreach?

Hanna Kim August 21, 2025
Business
Technology

How to Improve Deliverability: 5 Email Warmup Tools to Consider

Eric Knellinger August 21, 2025

Footer

Tweak Your Biz
Visit us on Facebook Visit us on X Visit us on LinkedIn

Privacy Settings

Company

  • Contact
  • Terms of Service
  • Privacy Statement
  • Accessibility Statement
  • Sitemap

Signup for the newsletter

Sign For Our Newsletter To Get Actionable Business Advice

* indicates required

Copyright © 2025. All rights reserved. Tweak Your Biz.

Disclaimer: If you click on some of the links throughout our website and decide to make a purchase, Tweak Your Biz may receive compensation. These are products that we have used ourselves and recommend wholeheartedly. Please note that this site is for entertainment purposes only and is not intended to provide financial advice. You can read our complete disclosure statement regarding affiliates in our privacy policy. Cookie Policy.

Tweak Your Biz
Sign For Our Newsletter To Get Actionable Business Advice
[email protected]