How to Start a Freelance Writing Business
Are you passionate about writing? Maybe you’re working on the great American novel, but you need a way to make money in the meantime. Why not start a freelance writing business to use your skills to make a living?
Freelance Writing Industry Overview
A freelance writer composes various pieces for companies or individuals, including articles, blog posts, whitepapers, letters, and more. Some specialize in writing about certain subjects such as business or fashion.
A freelance writing career is an ideal type of business because it provides time flexibility and deciding on what work to take on. Some writers focus on specific topics, niches, or target audiences, while others vary the topics they write on.
According to Statista, there are 67.6 million freelancers of various types in the United States. It is projected that the number will be 86.5 million by 2027, just over half the U.S. workforce. It is difficult to estimate the total revenue for freelance writers because freelance writing businesses are small and private companies.
The industry is growing due to people wanting job flexibility and because the demand for freelance writers is growing. It is estimated that 48% of companies hired freelancers in 2018, and that number is steadily increasing.
Your target market will be companies or individuals who need writing services, particularly in your chosen specialty.
Skills, Experience, and Education Useful in Running a Freelance Writing Business
There are several specific skills that you will need to open a freelance writing business.
- Experience. There are several different styles of writing a freelance writer can focus on, such as technical writing, copyrighting, bookwriting. Having experience in a particular writing niche will help land potential clients. Knowledge of SEO and content writing can also very important for many small business clients.
- Education. A degree in journalism or your area of specialty will give you an advantage.
- Business knowledge and experience. You will need to have a basic understanding of marketing, finance/accounting, and human resources.
- People skills. You’ll need to build rapport with your clients so that you retain them as customers and keep them coming back.
Checklist for Starting a Freelance Writing Business
If you’re thinking about starting a freelance writing business, it’s important to do your research first. Here is a checklist to help you get started.
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your freelance writing business should be to write a business plan. The business plan will make you focus on some critical aspects of the company, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect freelance writing business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a freelance writer, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: 3 steps to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
Most freelance writers run their business from home, however, it’s important to check city ordinances to ensure a home-occupation license isn’t required.
Step 5: Apply for Business Licenses and Permits
You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Check with your state for specific license and permit requirements for your freelance writing business. Some other common local, state, and federal registrations a freelance writing business may need include a sales tax permit and an Employer Identification Number.
Step 6: Open a Business Bank Account
Keeping your business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 7: Get your Marketing Plan in Place
To get started as a new freelance writer, having a writing sample or two is a must. These don’t have to be samples from an actual client, but having a few samples to look at so clients can evaluate your work. You can quickly find writing jobs on job boards like Upwork, Fiverr, and ProBlogger, where people and companies post freelance jobs. After you build up a good reputation, you will just need to set up a good profile and have an effective cover letter.
Longer-term, there are several marketing techniques for a freelance writer to consider such as guest posting, and social media marketing such as creating a LinkedIn profile and Facebook. Also, sending potential clients to your website helps increase your professional image, and don’t forget to include those writing samples. Another way to build your website is to add your own blog posts to demonstrate your writing.
Step 8: Get Business Insurance
There are several types of insurance a freelance writing business should consider. A few of these include:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
The cost to insure a freelance writing business will vary depending on a number of factors. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 9: Hire Employees
You may need employees to help you run your freelance writing business. Make sure that you select people with appropriate experience and training.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 10: Set up an Accounting System
Setting up an accounting system for your freelance writing business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start a freelance writing business?
The costs to start a freelance writing business is very inexpensive, and you probably already have most of what you need.
– Reliable desktop or laptop computer $500 – $2,000
– Strong internet connection – $30 – $50/month
– Software such as Microsoft Word, Google Docs, and Grammarly – $0-$15/month
How profitable is a freelance writing business?
Once you have established yourself, you can make anywhere from $15 – $40 per hour or more. If you make $25 per hour and get enough business to work 40 hours per week, you will make $52,000 per year.
Some freelance writing job platforms take care of billing the customer, but some writers will work directly with clients. When working directly, the writer will have to send an invoice before getting paid. Many new freelance writers struggle with sending invoices on time (or forgetting to send them at all), so be sure to set up a system to make sure and get paid for all of the work you did.
Are there grants to start a freelance writing business?
It’s extremely rare to find a grant to start a freelance writing business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for a freelance writing business?
The NAICS code for a freelance writing business is 711510, which is categorized under Independent Artists, Writers, and Performers.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.