In an uncertain economy, freelancers can be a good choice for small businesses who may not need a permanent, full-time staff member. Many types of work, from writing to graphic design to bookkeeping, can be performed on a freelance basis. To find and hire a freelancer who will do quality work, the Better Business Bureau recommends the following tips.
Hiring a freelancer may be an efficient and effective way to work through a short term project and/or one which may have budgetary constraints,” Mechele Agbayani Mills, President and CEO of BBB in Central East Texas said. “Just keep in mind, all freelancers are not equal, so do your homework and check references.”
- Know the difference between an independent contractor and an employee. Knowing the difference is vital since the answer can affect how you withhold taxes. Unlike employees, freelancers are independent contractors who control when and where they work, and furnish their own equipment and tools. That said, situations vary, and should be handled accordingly. In the United States, you can find more information about differentiating between employees and freelancers at IRS.gov.
- Research prices and create a budget. The prices freelancers charge for specific projects can vary greatly based on many factors such as location and years of experience. Remember, a lower rate could mean lower quality. Instead, start by setting a budget and then take your time shopping for a qualified candidate. Most freelancers are willing to discuss your project and will provide you with a free estimate. Use BBB’s Get-a-Quote to get a get pricing or request a consultation from an Accredited Business.
- Create a clear description. To find a freelancer who is a good match for your project, you must get clear on what you need. Start by writing out what work you need completed, your timeline, a description of your business, your budget, and any other pertinent details. A detailed description will help you clearly communicate your needs and expectations.
- Know where to find talented freelancers. Before posting your job online, ask around your business network for recommendations. It’s possible someone you know already found a talented freelancer, which can eliminate much of your search. If that doesn’t work, then post your job to a freelance marketplace or job board. Be prepared to receive (and weed through) a lot of emails. Narrow your search by pre-selecting communicative freelancers who have the appropriate skill set and can work within your budget.
- Interview potential candidates. Be ready to share information about your needs and be frank about your expectations. It will quickly become apparent if this is a person with whom you will feel comfortable working. These freelancer interview questions from the Society for Human Resource Management (SHRM) are a good place to start. If you have a few options and are having trouble making a choice, consider offering paid test projects to freelancers you are interested in hiring. It’s a great way to see the person’s work first-hand before committing to a longer-term working relationship.
- Sign a contract. Contracts provide legal protection for both parties and should clearly outline the project’s scope, deadlines, when deposits and payments are due, cancellation policies, and confidentiality requirements. If you need guidance on writing a freelance contract, see these resources from Freelancers Union.
- Get the tax forms right. Before the freelancer begins working in the U.S., have them fill out a W-9 form which will request their correct name and Taxpayer Identification Number. Keep the W-9 on file for four years in case any questions arise from the worker or IRS. If you paid the freelancer $600 or more by the end of the fiscal year, complete a Form 1099-NEC for nonemployee compensation. You must provide the freelancer and the IRS with a copy of this form by January 31 of the year following payment. For more information on tax forms for independent contractors, see these IRS resources and forms.
For more information
See SHRM’s toolkit for hiring an independent contractor, which includes sample agreements and more. To learn more about hiring a freelancer, see the BBB Scam Alert: Hiring freelance help? Watch out for imposters
For more advice, read BBB’s tips for businesses. If you’ve spotted an online scam, report it to BBB ScamTracker. Subscribe to BBB Scam Alerts for weekly updates about new scams. Business owner? Get BBB Accredited. Remember, great businesses are out there. Always look for the BBB seal; it’s the Sign of a Better BusinessSM. Start with companies you can trust by going to bbb.org.
About BBB: BBB is a nonprofit, business-supported organization that sets and upholds high standards for fair and honest business behavior. Most BBB services to consumers are free of charge. BBB provides objective advice, free BBB Business Profiles on more than 5.3 million companies, 11,000 charity reviews, dispute resolution services, alerts and educational information on topics affecting marketplace trust. Visit bbb.org for more information. BBB Serving Central East Texas was founded in 1985 and serves 19 counties.