How A Freelancer Can Form A Small Business – And Tips To Do So Efficiently

The freelance economy is only going to continue to grow as people desire the freedom of being able to work remotely. The ability to travel and still earn is something that plenty of people want to do at some point in their lives.

Creating a business as a freelancer is not as difficult as you might think as you will simply have to do what you are already doing, just at a higher level or with more volume. Forming a business with low startup costs should be the goal as the freelancer might not have a lot in terms of cash flow.

Freelance business owner on the phone

The following are tips to help a freelancer form a small business as well as tips to do it in an efficient manner.

Build Up A Healthy Client Base

Starting a small business means that as a freelancer that you have more work than you can handle. Below we will discuss strategies to getting this work done and earning passive income if you have contractors that you can rely on.

The best thing that a freelancer can do is produce great work as companies want to continue working with freelancers that they know will deliver. For this purpose, you’ve got to maintain a healthy client base – and add new clients to it regularly.  But how?

Well, you can begin with reaching out to former colleagues that might need work done as well as they know how proficient you are at specific tasks. Former employers can be great to reach out to as they might have freelance work available which can be consistent income if they need hourly work done weekly.

LinkedIn is another place that can be perfect for a freelancer looking for new clients outside of freelancer platforms like that of Upwork. Building a client base will take time but with decent client retention this can happen in a timely manner.

Source To Other Freelancers

The best way to scale is to find other affordable freelancers to outsource large orders to. As long as the quality of the work is the same or better this can be a great way to make truly passive income.

For a writer that is assigned 100 articles to write over the course of the month for $50 an article. Sourcing this to a few writers can turn it around more quickly and if paying $25 per article there is still a 50 percent margin.

The one thing that you cannot do is miss deadlines due to other freelancers as this can ruin a client relationship. Companies that love to use freelancers like ones that hit deadlines, communicate well, and produce quality work.

That aid, do not allow a subpar freelancer to do client work as this is not presenting the business is a good way.

Well-designed business website

Get A Website

The design of a website after purchasing a domain name is important as is the name of the business. Standing out is important in an industry but standing out too much can be a negative thing. Set goals for each section of the website whether it is to generate sales or help legitimize the young company.

Establish An LLC

Establishing an LLC is important as this can keep clients from going after you personally in court. After forming a business this will be your corporate identity with rules about filing taxes and for licenses in the state. Failure to do these things can leave you in poor standing and lead to the dissolution of the business which can lead to revoking the businesses license.

Expand Services Offered By White Labeling Services Of Other Freelancers

A freelance writing company that teams up with freelancers or another company that offers web design can be the start to a full service digital marketing company. This process of marking up services of another company or individual and labeling it as your own is considered white labeling.

White labeing is a common practice throughout industries but again it is important to only partner with those that hit deadlines and communicate well. Losing clients due to a white labeled service being subpar is doing the opposite of growing the business so it could be time to cut ties with a specific partner.

Educate Yourself In Best Business Practices

There are going to be decisions when starting a small business that have to be made. For those that have not run a business before this can be difficult so educate yourself online about the best business practices.

Small things like turning the company blog into a resource for current and potential clients is something that can generate revenue. Do not be afraid to ask for help or hire someone with experience starting a business to help out. You want your business to have a strong base so it can be profitable for years to come.

Freelancer in a client meeting


Going from a freelancer to a small business owner might not be as large of an adjustment as you might think. Establishing this business can also help you land larger clients as some companies do not want to work with freelancers but rather source to small companies. The above tips can be a huge help when first starting out, take note of them!