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Freelancing takes hard work, rejection and one hundred mistakes. It’s not easy, but if you find your sweet spot, you’ll wake up excited every morning.

If you’re struggling to build a profitable freelance business, this guide can help you.

Choose Your Niche

Pick your field and your target. A good example could be a web designer (the field) specializing in dentist’s websites (the target).

Set yourself apart from the competition. Think about all the web designers you know. How many of them specialize in websites for dentists?

This is the unique selling proposition. Define yours and focus on targeting the type of clients you want for your business.

Calculate Your Rate

Calculate your total expenses. Include personal expenses, office costs and staff (a virtual assistant or your accountant).

Write down realistic billable hours. You can work 8 hours every day but it doesn’t mean you’ll charge all those hours to your clients.

Divide your expenses between the billable hours and now you have your ideal rate. Also consider taxes and payment fees. These are usually a percentage of your earnings.

Research Your Market

Investigate how much money your target is willing to pay for your services.

Using the example above, let’s say every dentist pays approximately $1,500 for a website and you need $6,000 every month to cover your bills.

You’d need 8 projects per month because you probably won’t finish every website in 1 month and you may receive an 50% upfront payment.

Is realistic to think you can find 96 dentists every year to build your business? Maybe this isn’t possible if you’re targeting your small city dentists. However, if you live in a bigger city the situation changes.

You’ll have to answer these kind of questions to know if your niche is profitable.

Build a Portfolio & Testimonials

Before anyone is willing to pay for your services, you need to prove you’re capable of delivering results.
Do free work to get some samples or create your own projects to show your abilities. Contact past bosses or colleagues to get testimonials and referrals.

Buy a domain and set a basic website with your about page, portfolio pieces, testimonials and contact form.

Create a Sales Strategy

We said before you need 8 projects per month.

Here’s an interesting fact:
6 out of 10 prospective clients buy your services if they got the referral from a friend.
1 out of 10 prospective clients buy your services with cold calls and cold emails.

It means contacting 80 dentists you don’t know every month to find 8 clients.

Or you could contact around 13 dentists through people you know to find those 8 projects.

Do the math and find out how many leads you need every month for your freelance business.

Learn To Negotiate

Don’t let clients force you to work below your minimum rate, no matter how much exposure or future work the clients promise you.
Don’t agree to start any project without an upfront payment.This helps you to increase your cashflow and protects you in case the client cancels the project after you started working.

For large projects your ideal scenario may be 40% upfront, 30% in the middle of the project and 30% at the end.

For smaller projects, 50%-50% is the business standard.

We’d Love To Know Your Thoughts

Do you have more tips to build a profitable business?

Have you tried any of these steps?

Let us know!

Author’s Bio:
Karen Martínez is a freelance blogger for hire. She’s the author of Freelance from Scratch, where she shares stories and tips for building a freelance blogging business and a better lifestyle.