Moving from Corporate to Contract

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Working as a full time in house employee definitely has its benefits; camaraderie, stability, and the support of a team are alluring aspects for many designers. Yet, it also has many drawbacks. If you’re frustrated with the politics, tired of endless meetings, or you just want creative freedom and increased income, contract work can be an appealing option.

But how do you actually start freelancing?

I’ve worked on and off as a freelancer for over a decade, and I’ve learned many of the ins and outs of consulting the hard way. This article walks you step-by-step through starting and growing a freelance design business, from choosing a niche to finding clients and closing deals. I’ll share what I’ve found is most successful, what to avoid, and where to experiment to drive your business forward.

Pick a Niche

To start freelancing, the first thing you need to do is choose a niche. You’ll leverage this area of focus to position yourself to clients, close more sales, charge premium prices, and land referrals, so choosing wisely is extremely important.

The best niches align your talents and interests, focus on an area in high demand, and differentiate you from the competition.

When choosing a niche, make sure to follow a few best practices:

  • Match Your Niche to Your Interests and Talents – Perseverance is the key to any successful business; if you’re not actually passionate about your design niche, you’ll likely give up when things get challenging. So let curiosity and passion drive you.
  • Choose a Niche with High Demand & Long-Term Projects – You want to make sure your niche has enough demand to support you. It’s also helpful when most of the work isn’t comprised of short-term, quick-turnaround projects. It’s much harder to make a living with $200 logo design projects than it is with ongoing UX projects, for example.
  • Find a Way to Stand Out from the Competition – In an ideal world, your niche would have so much demand and so little competition that clients would literally beg to work with you. In the real world, however, you’ll have to differentiate yourself. Rather than positioning yourself as another web designer, be the one who focuses on a specific, in-demand area like mobile transactions or gamification or behavior design.

Find Freelance Niche Ideas

Researching your niche can make a sizable difference to your overall success, so be sure to do your homework. You’re looking for evidence of consistent demand at price points high enough to build a sustainable business.

One quick and effective tactic is to investigate job boards for common themes within your vertical. Look at both how frequently a specific niche appears in job listings and the salary that companies will pay for it. Dribbble and We Work Remotely are great starting points for designers and technologists; AngelList is another fantastic resource that includes both design and dev roles, as well as marketing and customer success.

Talking to colleagues and other freelancers in related verticals can also be instructive. Consider asking them what needs they experience most frequently.

Find Clients

Once you’ve picked a niche, you need to land your first client.

There are lots of ways to look for potential clients, but ultimately you’re looking for three major things – high deal value, quick time to results, and potential multiplier effects.

Based on extensive trial and error, I’ve found that building a network is the most effective way to find clients because it offers all three traits. If the idea of networking makes you want to throw something at your monitor, don’t sweat it. The method I use is simple enough that even introverts like me can succeed with it.

Here’s how it works:

Choose Three People and Ask to Talk

Start with friends, former colleagues, or even family members. You never know who might lead you in a useful direction. Get in touch, let them know that you’re starting a freelance business, and would like some advice.

Ask for Feedback

Give an overview of your plan, your chosen niche, and potential clients. Then, just ask for advice. The key here is to really listen. Take this opportunity to learn more and gain some feedback.

Ask for Introductions

The beauty of this method is that you never have to ask for work. If the person you’re talking to needs your services, they’ll volunteer the information. If not, wrap up by asking, “Do you know anybody else who could give me advice?” The goal here is to get 2 or 3 introductions from each meeting so your network can grow exponentially. Sooner or later, you’re bound to meet a potential client.

Repeat

It’s flattering to be asked for advice – and people love to help! As a result, most will agree to chat and make some introductions. Eventually, you’ll meet someone who has  a potential project for you. No overt selling needed!

Variations

There are also a few other variations of this tactic that work incredibly well:

  •  Work with other freelancers – Freelancers frequently receive requests for services they don’t offer and often refer their clients to colleagues. Consider building relationships with freelancers who offer complementary services. For example, graphic designers could partner with developers, user experience designers, or user researchers.
  • Join online professional groups and hold office hours – Professional groups are a gold mine of potential clients.  Consider making yourself available for online office hours. By offering a few minutes of your time and some free advice, you’ll hear directly from clients about their needs and kickstart the relationship-building process.

Pricing, Pitching, and Closing Deals

Once you’ve found a client who needs your services, the next step is to close the deal. 

Here are 4 key steps:

Key #1: Do Your Homework

Talk with your potential client about their goals. What problem does your work solve? Beyond a design deliverable, what business goals will your project solve? Ask the client to quantify these goals in terms of real costs or sales numbers; you’ll use these numbers when you write your proposal.

Key #2: Build Trust 

If you think your client needs a large project or ongoing services, consider building the relationship incrementally first. By offering a free planning session or a small project you can build trust, demonstrate competence, and learn more about the client’s needs before you propose something larger.

Key #3: Triangulate Pricing

Rather than a guesstimate, try to price your project by balancing your costs, the “market rate” (what other designers would charge), and the overall business value of the project.

Key #4: Structure Your Proposal Properly

Think of your proposal as a sales funnel. When you write it, you want to do so in a way that makes it feel obvious that they should buy from you.

I recommend the following structure:

1. Define the Problem

Refer to the client’s problem and why it’s crucial that it gets solved. If possible, emphasize the cost in terms of lost dollars, lost sales, or lost productivity.

2. Outline the Solution

Describe how your work will solve the problem. Keep the focus on what your client will gain and paint a picture of future success that your work enables.

3. Describe Your Offer

Tie the problem and solution together through the work you’ll do. Describe the project in detail and explain how each feature will solve the client’s problem.

4. Address Objections

Answer any potential concerns proactively so they’re not left wondering.

5. Make the Ask

Ask for their business. Make sure to include a timeline and next steps. 

Each step sets you up for success. You’ve got this!

Build a Sustainable Business

Once you’ve mastered the basics of selling projects, you’ll need to focus on growing your fledgling consultancy into a sustainable, long-term business.

While the business of freelancing isn’t always glamorous, putting in the work will ensure you’re able to realize your creative and financial dreams. Here’s where to start:

Get the Right Tools

Once you have a few projects set up, you’ll need to keep your business efficient. An online accounting tool, such as Freshbooks or Quickbooks, can organize your income and expenses and automate away some of the tedium of repetitive financial tasks.

Managing your time effectively is also essential. Freshbooks and Quickbooks have time tracking features, and there are many other excellent tools dedicated to time-tracking and invoicing like  Harvest

For organizing sales and outreach, another crucial freelancing business task, I’d suggest building a simple pipeline on Trello or Pipefy. Both offer free plans and simplify the process of categorizing contacts into stages and managing follow-up.

Grow Sustainably with Productized Services

At a fundamental level, most freelancers sell clients their time.

The problem with this model is that you quickly run out of inventory. After 40 or 50 hours of work, your efforts result in increasingly diminished returns. Clients expect bigger hourly discounts and your work output suffers. All of this is bad for both your clients and your profitability.

So while ongoing retainer agreements are a great way to stabilize your freelance income, selling hourly blocks of time is typically a losing proposition in the long-term.

The solution to this challenge is to get creative with the services you offer. Instead of selling your time at a discount, consider selling productized services instead. If you can structure your offerings so you can “build once but sell twice” (or ideally more than twice), your profitability will skyrocket. Here are a few creative retainer models to consider, but however you structure your deals, make sure that you ensure they’re valuable for both you and your client.

Learn and Grow

With a bit of hard work and determination, it’s possible to make the jump from corporate to contract and start working on your own terms.

If you’re still wondering if this whole freelance thing is for you, ask yourself if you’re ready and willing to learn and grow. Almost everyone has the capacity to succeed as a freelancer as long as they possess the tenacity and humility to experiment. 

If you get stuck or need advice, feel free to reach out. I’m always willing to help fellow designers. Congrats on taking the first step towards independence! 

Further Reading

If you’re ready to dive further into the details, here are a few of Tim’s extended resources to help guide your next steps:

Photo by BRUNO CERVERA on Unsplash

Tim Noetzel

I’m a full-stack product designer passionate about creating products people love through data-driven design.
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