Become Freelance

It would be nice if we could all do what we love every day and make lots of money doing it.  That is the goal of any entrepreneur.  For those brave enough to venture out on their own, this is just the beginning.  If your excuse for not starting your business is a money issue, let it not stand in your way any longer.

Let’s face it, not everyone can start a business without money being an issue (or lack of it thereof).  Are you going to let that stop you from building your dreams of success?  I hope not.  There are ways to find the money you need to start your business.  You just need to know where to look.  We can help.  You’re about to find out WHERE to find money!

First of all, you need to be in the right frame of mind to ask for the money.  Many Freelancers are very independent in nature.  We don’t like to lean on anyone else or ask for anything.  We are loners who don’t like to punch a time clock or have anyone tell us what to do.  We depend mostly on ourselves to go after the things we want in life.  Push your pride to the side if you really want to make your dreams of becoming a Freelancer happen.  There is no time to waste dawdling and dwelling on the reasons why you can’t.  Instead, look for reasons why you can.  You will have enough money if you look for the right avenues to initiate your idea.

As a disclaimer, we realize that some of these ideas may be risky.  But then again, so is the adventure of breaking out on your own.  We are not recommending every idea to you, but rather telling you about them so that you will know all of your available options.  There is no right or wrong way and you will decide which way is best to fund your start-up venture.  It would be wise to seek advice from a few selectively-entrusted business acquaintances or Freelancers who may be in a similar nature of business as the one you wish to do.  This will avoid disappointments or regrets later by asking all of the right questions now.  Then you can decide which capital start-up resources will be in the best interest of your new business.

Resources for External Funding:

Find a Silent Partner -   If you’re not crazy about the idea of sharing your business with someone else who might have the money to get it going, and then think about finding a silent partner.  Unlike a traditional partner who would have an active hand in the day-to-day progress of your business, a silent partner is someone who sees your idea and trusts you to run the whole show.  In return, you will pay the silent partner a percentage of your overall profits, at least for a predetermined number of years or forever, depending on the contract you are able to negotiate with that individual.

Get a Business Partner -  If you’re open to the idea of a business partner, then find someone trustworthy to team up with.  Use caution when doing this.  Avoid using close friends or relatives as business partners, because inevitably this scenario will backfire.  Many a great friendship was lost because of two people deciding to go into business together.  Instead, look for an outside neutral party or an acquaintance that is already in a similar industry to the nature of your business idea.  This person will be more likely to see your vision, offer fresh ideas, bear some of the financial burdens and possibly bring you a whole handful of new clients right off the bat.

Uncle Sam -  Depending on the industry of your Freelance business, there may be funding available from Uncle Sam.  You’ve been paying him plenty of money for most of your adult years, so isn’t it time that he gave something back?  Look for a grant, government loan or minority-owned incentive.  It’s worth looking into, although it can be very stringent to apply for.  A grant would be ideal, since it offers money that will never have to paid back, but if you don’t qualify for the grant then you could seek a government loan that will be secured by your personal assets.  The drawback is that if your business fails, then those personal assets could be turned over as payment.  Sometimes the government also limits the amount to give new businesses.  Check out the U.S. Small Business Administration’s website: www.sba.gov.

Your Bank -  Before you roll your eyes and toss out the traditional financial institution as an option, keep in mind that bank loans are not impossible these days because new business means growth to the economy.  If you have a great idea and a stellar business plan in place, what do you have to lose by talking to the bank?  Even if your credit is less than perfect, if your idea is well designed and professionally presented then the bank will consider it.  You may have better luck at a SMALL bank or a CREDIT UNION, rather than a big worldwide bank.  Look for a local, regional or ecommerce bank that specializes in small business ventures.  Often they deal with and make decisions based on a personal level, rather than viewing individuals as just another number.

Your Kinfolk -  Well, we warned you.  A loan from family or friends could be a big gamble to your relationship.  However, this is still the most common means of start-up funding for many entrepreneurs.  Listen to this advice if you go this route -

• When borrowing from someone you know, never borrow more than you would be able to repay within a year.
• Create a legitimate legally-binding contract called a “Promissory Note” to guarantee your repayment.
• Keep business and personal relationships separate so that money doesn’t come between you.

Owner Financing -  If you are taking over a business which has already been established, try to work out a deal with the owner that will allow you will take over the company and then repay it over “X” number of years.  Have a lawyer draw up the agreement with payments to be made once annually or semi-annually.  Try to pay it off early if the business grows, and make sure you allow for that option in the negotiations.

Work a Second Job -  This is the slow way.  Nevertheless, you’ve gotta do what you’ve gotta do.  Working your tail off may not be the option you want to hear right now, but the longer you procrastinate, the longer you will be working at that job you aren’t crazy about.  Work now, play later.  Your rewards will be all the sweeter.

Enter Contests -  Chances are, if you are a Freelancer then you have a special skill that can be worth money.  Otherwise, you wouldn’t be starting a career as a Freelancer in the first place, right?  Whether you’re a writer, illustrator, photographer or a poet, there are many contests that allow you to put your best foot forward.  The nice payoff would be winning enough to get your business off the ground.

401K and Retirement Funds -  Eeek.  If the thought of tapping into your long-earned retirement fund makes you shudder, then consider this – do you want to retire with the company that you are now employed with, or do you want to retire rich?  You can have both.  Some people may be in more of a position to borrow against their own future retirement account than others, especially if the account has accrued to a significant stash.  You can arrange a repayment of what you borrow, and if you have a super duper accountant then he may be able to find a loophole against paying the big year-end tax to Uncle Sam.  Explore this as an option and worry about paying it back later, after you have enjoyed the fruits of success with your new Freelancing endeavor.

Pray for an Angel -  Yes it would be heavenly to have money fall from the sky.  This is not the kind of angel we’re talking about.  An angel investor is someone who is already wealthy and successful and who now wants to help start-up entrepreneurs, while enjoying a share of the profits.  Angels can be difficult to locate.  A personal introduction via colleagues or through networking might produce an introduction to the right candidate.  As they say, “It’s not what you know, it’s who you know.”  This rings true when searching for an angel investor.  Often these people are approached by everybody with a great idea – from a new invention to a buyout of another business.  There are a whole bunch of websites that will lead you to angel investors, but be careful not to fall prey to scammers.  Here’s some advice on finding your Freelance angel:

• Have a professional business plan and proposal prepared in advance. Power point presentations, powerful sales graphs and thorough research will give you added leverage.
• Buy an introduction to potential angel investors through an investor-matching service. The mediation of a third party will make the process much smoother and will create trust from both sides involved.
• Negotiate fairly with the investor. Some of these rich guys who shell out money to new entrepreneurs want big bucks in return. Make sure your cut of the profits is not lost to someone else. This is your idea.
• Respect the privacy of your angel. He is busy and doesn’t want to be bothered with your nuances. An angel is like a silent partner and doesn’t wish to be seen, nor heard unless forced to do so.
• Have a business idea that will attract angels. Technology, science, energy and ecommerce are all hot commodities for angel interests.

Attend Trade Shows -  Not only are they a good place to network and familiarize yourself with your desired industry, trade shows can be a good source of ideas to raise capital for your business.  Trade Show Week Magazine offers nearly 7,800 trade shows in the directory.  Visit:  www.tradeshowweek.com and click on ‘Directories’ or search by the nature of your industry.  Another great reference is the Trade Show News Network (TSNN), an event database which includes worldwide data of over 15,000 trade shows, public events, conferences and exhibitions.  You’ll also find over 360,000 seminars at:  www.tsnn.com.

Learn From the Indians -  During colonial times, the Indians set up trading posts with early Americans to exchange products and services.  When you’re just starting out, you may find many business owners to be open to bartering time, talents or remuneration for your professional help.  Whether you are going to become a Freelance masseuse, personal trainer or carpet cleaning company, try to get the things you need to get started by trading your services to another company or individual who needs you.  For example, if you need a new sign to hang in front of your studio, try calling a sign company and asking if they are open to bartering for your services as equal trade.  Many will be glad to save money that they would otherwise pay out of pocket for those services.

Plastic -  Ouch, these bite.  Be careful with using credit cards.  Interest rates can eat you alive if you are not able to pay it back.  If you decide to fund your endeavor on the charge card, then take heed of the following advice:

• Never use cards with high limits. Negotiate a low rate with your credit card company and use no more than one card.
• Never borrow more than you can pay back within the introductory interest rate period. Normally it will be 6 months to 1 year.
• Pay it off as soon as possible. As soon as your business takes off and you begin generating healthy profits, make double or triple payments.
• Save your credit score from scarring by being timely. Many business owners get in too deep, making their personal accounts suffer as a result. Remember that responsible credit will enable you to possibly obtain a business loan from a bank later.

Bootstrapping -  Bootstrapping is a slang term used by Freelancers and entrepreneurs to define starting a business with very little, if any outside funds.  The term was derived from legendary Baron Munchhasen, a German sailor who was fabled to have pulled himself out of the ocean with nothing more than a bootstrap.  Amazingly, bootstrapping is done far more frequently than any other means of funding.  Majority rules!  You may be one of those people.  Bootstrapping is such a great topic that we’ve decided to allocate a whole section to help you do it right.