I’ll try to make this quick, I know these kinds of posts can get annoying.
I keep hearing these two terms pop up throughout my research on becoming a freelance web developer. I’m just very on the fence about them.
I do ultimately hope to make this into a sustainable job, but for the time being I’m just testing out the waters and doing it more as a hobby. This isn’t to say I won’t take my clients projects seriously, because of course I will, but I keep getting told I need to form an official business and set up insurance and all of these other things. It just all seems too much this early on, I don’t know if I’ll even pursue this path either. I also only plan on having one or two clients just so I can learn the field some more rather than make a profit.
So, I guess my question is this: are these necessities for starting out? Am I bounded by law to have some sort of insurance before beginning freelance work? I understand having these things makes selling yourself easier and overall just keeps you safer, but if I’m just taking on smaller projects and stay clear in my contract and project outline, I hope I won’t have too many legal issues.
Any and all help is appreciated, thank you.
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You don’t need anything to get started.
You can bill a client, they can pay you. You DO want to have a contract that states the terms of the engagement (and hopefully have a clause about any recourse if there’s an issue). A simple term that I’ve seen used is that “the clients recourse for damages is limited to not to exceed the total sum of payments during the project” – or something along those lines. So, if things go really wrong and you get into trouble, they are just limited to what they’ve paid you, but can’t get additional damages. (YMMV).
Yes, LLC and Professional insurance are wonderful, but definitely get some traction in the market and then spend some of your earnings setting those things up.
You don’t really need anything to legally get started. What you should have is an agreement the clearly outlines the scope of what you’ll be doing and what recourse the client has should something go wrong.
In The States, be prepared to pay taxes on any income, per client, per year over $599. So keep track of that and ask for 1099s in December so they can (hopefully) get them to you and you can figure out how much you have to pay. Usual 40-45% or the amount over $599.
Have a bullet proof contract that isn’t more than 5-7 pages long. Google how to write great web development contracts. AI can help get a base going, too.
Be ready to be an Admin, Project Mgr, Account Mgr, developer, assistant, Finance person.