I have a few requests from friends in India who want to become a freelancer. I thought of sharing these tips in a blog post.
Getting projects may not be easy when you start. There are a few proven channels for a freelancer in India. They are:
- Your blog
Yes, you should have a blog of your own and proudly declare that you are a full-time freelancer. This will help you attract clients who will give out projects.
Most of the projects which are outsourced are related to UI. UI is important but not confidential. So, there are a lot of projects which are available in web and mobile app development. I call myself as a React developer. I build apps using React or React native.
Billing rate is something that you should calculate. Every year, we have 2000 hours of time for work. But, we won’t utilize ourselves 100% of the time. There will be times when you don’t get a project. And sometimes, it may take 2 months to finalize a project. During those times, please keep yourselves busy with training. PluralSight and Udemy are two good sites which have excellent training material.
Assuming you have 1500 hours of billable time, and you want to make $45,000 /year, you should target for a billing rate of $30 /hour. It is a bit difficult to get projects at that rate. It is easier to get projects in the low 20s, between $20 /hour to $25 /hour. And as you increase your billing rate, you should work more on business development and also keep your presence felt using channels like your blog.
As a freelancer, the best structure of your business is a sole proprietor. Register with MSME (Ministry of small and medium enterprise).
From a taxation perspective, there are two options. You can opt for presumptive taxation. In that case, you track only your receipts. And declare that your profit is 50% of the receipts. Also, while filing income tax based on presumptive taxation, make sure that your business code is 607 (Professional – Other).
The other option is business taxation. In business taxation, you track both your revenues and expenses. And file taxes accordingly. This is useful if you have employees and you are paying salary to employees. And your profit is less than 50% of your revenues. But, I will recommend this option as being more ethical.
Finally, if your clients are outside India, then you don’t have to pay GST. If your clients are within India, you have to pay GST if revenues are greater than 20 Lacs /year. If you are just starting, you don’t have to worry about GST.