Setting Up Your Freelancing Business
I recommend that students of Web Development try to find freelancing gigs in order to learn their trade and make a little money at the same time. This article describes how to set up the business side. (See the separate articles on What to Charge and How to Find Clients.)
Choose a Name for your Business
One of the fun things about starting your own business is to name your business. Even so, in Minnesota, I’d recommend using your name in the company name, like John Smith Designs or John Smith Web Services, to avoid the hassle of filing a DBA name.
- Start your business as a sole proprietorship.
- If you want another name, then setting up an LLC may be easier than a Sole Proprietorship in Minnesota. I found setting up an LLC in Minnesota to be very easy…no lawyers needed.
What Service Should You Sell?
Your list of services may include, depending on your skills and courses you have taken:
- Web Design or Web Development
- Website Hosting and Maintenance
- Logo Design
- Programming
- Print or Infographics Design
- SEO Copywriting (eg, with Yoast)
Make sure that this list of services is clear in your business website. Keep in mind that you need to find services to sell that are in demand AND that you like to do. For example, you may love basket weaving, but may find it difficult to find clients to pay you for that service.
Tracking Business Expenses
Start tracking your business expenses, because these expenses are subtracted from your revenue, the money you earn from clients.
- Website Hosting
- Travel to Business Meetings
- Food at Business Meeting (only 50% counts)
- Mileage to business meetings
- Computer for your business (The computer for your business must be separate from your personal computer.)
- Adobe Products
- Business Cards
- Advertising
If you have the space in your home, you may want to carve out a separate place for your business home office. There are a lot of rules about when you can claim a home office, so while you are a student it may be harder to make this deduction.
An easy way to track your expenses is in a spreadsheet. It is important to write down your expenses as you go, so you are able to include them in your taxes.
As a freelancer, my largest expense is for website hosting for my client websites.
You may have more expenses than revenue the first years of your business. This is a business loss and the loss reduces your income. (Schedule C)
Is school a business expense?
After you have established a business with the intent to make money, classes that relate to that business are tax deductible. For example, your required history class is not tax deductible.
- Include all your expenses. Books, supplies, mileage.
- It would only apply to courses that directly relate to your company
- If your company makes websites, then these types of courses would apply: Photoshop, Illustrator, PHP, JavaScript
Note: Check with your own tax professional on what business expenses you can report. The tax rules are complex, change frequently and depend on the individual taxpayer’s situation.
The Best Part-Time Job
Working as a freelancer can be a great part-time job while you are in school and will give you professional experience for your resume. Here are some of the benefits:
- List the work for your company on LinkedIn and on your resume.
- Give yourself a title: Eg. Owner and Web Developer
- Many full-time programmers have self-employed businesses they run on the side, so you may want to keep your company after you get a full-time job.
- You have a story to tell at job interviews
Interested in learning more? Check out our educational resources on WordPress and Web Development with HTML/CSS.