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Five Questions to Consider When Going Into Freelancing

John Somnez covers five standard questions every programmer should think about when considering whether to pursue a freelance career.

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Many people have the dream of becoming freelancers. They think by working as freelancers they would have more flexibility with their agenda and even make more money.

However, becoming a freelancer isn’t easy. There are many questions that need to be answered and this can cause some confusion. I tried to answer some questions on this video. The questions I addressed are:

  1. I have a great idea and I can hire someone to do most of the code. But how do I find someone that will not steal my idea?

  2. I freelance my services. Do I need to incorporate / register as a LLC?

  3. As a freelancer, should I buy liability insurance?

  4. What is your opinion about freelancer.com and similar sites?

  5. In some cases is it better to find someone local?

Watch this video for my answers to those questions:

Transcript of Video:

John Sonmez: Hey, what’s up, John Sonmez from simpleprogrammer.com. I’ve got a couple of questions here about freelancing. I thought I’d answer a few of these questions. I got this email with three questions here. I think I can give you some pretty quick answers on these ones. This email comes from Dennis and he says, “Few more video ideas. I have a great idea and I can hire someone at Freelancer.com to do most of my code but how do I find someone that will not steal my idea?” That’s the first question, how do you find someone that won’t still your idea?

That’s tough. You can’t. You can’t guarantee against that. The best thing to think about in this case if someone is on the freelancing side, if they’re doing freelancing then they probably are less interested in developing their own idea because they would be doing that already. I wouldn’t be too worried about that. It may happen, someone may steal your idea but you just make sure that if you hire someone that you’ve got a contract in place that says that you own the rights to everything that they produce for you during that time and that’s the best production that you have, but anytime that you—it’s going to be the interview process. You’re going to have to trust someone. There’s a lot of situations that you just have to trust someone and you can look at their record. If someone has been doing freelancing for five years and they have excellent record, the chances of them taking your idea and going off with it and not doing any more freelancing work is pretty low.

Next question, I freelance my services, do I need to incorporate/register as an LLC? Again, I’m not a lawyer, this is not legal advice, but I would do it. It makes sense to me. There are certain tax implications like in the US for doing that. Personally, I have—when I was doing freelancing work I would incorporate as an LLC and then I would file it as a S Corp which would allow me to hire myself as an employee of that company and to not pay as much—what is it, the self-employment tax. There are some advantages to that. There is also the advantage, again, not legal advice but my opinion on this is that you can protect yourself to some degree.

That’s going to lead right into the next question which is, as a freelancer should I buy a liability insurance? As a freelancer I don’t know. I mean it’s pretty cheap so I would say, yeah, you might as well because if you end up doing something and someone sues you, if you have liability insurance you’re covered.

In the work that we’re doing as software developers there’s a lot less liability. It’s not like working on someone’s house like working on the roof or doing their—working on their teeth, a dentist. Those professions obviously need liability insurance. Again, I’m not a lawyer so I don’t know for sure. I can’t advice you of whether or not you should buy liability insurance. When I looked at the prices last it was so cheap that it made sense to me to do it. It didn’t seem like there’s any reason to not do it.

Finally, what’s your opinion about freelancer.com and similar sites? Okay in some cases or better to find someone local? I really like—actually, I’ll give a free plug to Upwork. I really like Upwork. I found some really good people on Upwork. In fact, hey Rodrigo, my video editor I found him on Upwork and you can often find some really good people. The things I like about sites like that—I can’t speak for freelancer.com, I think they combined with Upwork anyway which used to be oDesk. The thing I like about that is that you can put out a job, you can get a lot of people to apply for it. You can interview those people and you can see their track record and it also has a time tracking thing so you can see the work that they’re doing and then they handle all the billing for you and you don’t need to get W9s because it’s directly coming from there. I like it. I’ve got definitely contractors that I work with on Upwork. We could go off of the platform and pay individually but I prefer just to pay the small fee that Upwork charges and to have that record in there and to have them handle all the transactions.

I think it’s a good way to go and I think you can find—I like that better than local for a lot of things because you have a lot wider range of talent out there especially if you go outside of the country. If you’re in the United States, you can find talent that might not be as expensive as if you try to hire locally. The only disadvantage is you have to hire very well because everyone that’s working on those sites is working remotely. A lot of people can’t work remotely and remotely a lot of people can take advantage of you so you’ve got to really find the people that don’t take advantage of you on those sites because you can’t monitor them. They have to be trustworthy and you’ve got to fire quickly if someone’s not doing a good job or if they’re patting hours or something like that you’ve got to be ready to fire whereas locally probably if you hire someone you can have them working in the office with you or you’ve got a little bit more control over the process.

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