Freelancing is pretty much a buzzword in the United States, where there were 15.5 million Americans who were self-employed in May 2015 according to the Bureau of Labor Statistics. The numbers increased by approximately one million since May 2014.
In a related American study, researchers estimated that over 40 percent (roughly 60 million) of the U.S. workforce would be freelancers by the year 2020.
The freelancing practice has pretty much caught on as well in the Philippines. In 2012, a Filipina freelancer earned PHP1.5 million after completing about 35 writing and translating jobs through Elance, an online freelance platform.
If you’re a freelancer, you can go even further and turn your freelancing gigs into a business by going through a Bureau of Internal Revenue (BIR) registration.
Freelancing Career Turn Into a Business
Go Legit
The first thing you need to do is to register your business. There are three types of business ownership in the Philippines. A sole proprietorship is a type owned by a single individual; this is how you can turn freelancing into a legitimate business.
In a single proprietorship, one person owns all of the assets of the business. He is also responsible for all the liabilities the business may incur.
In terms of taxes, the BIR considers the individual and his or her business as one taxpayer and can use a single tax identification number (TIN). However, as a sole proprietorship, he or she needs to apply for a trade name with the Department of Trade and Industry (DTI), as well as secure several business permits and licenses for the business application.
On the other hand, an individual who doesn’t have a client yet that he or she is catering to has a taxable income. In this case, the person can register with the BIR as an independent contractor/professional. However, in this case, the individual’s name will be used as the trade name so applying for a DTI trade name is no longer necessary
Creating Your Own Personal Brand
Just like in freelancing, your clientele grows through word of mouth and recommendations. This is where personal branding comes in. Whether you are a sole proprietor or an independent contractor, it is important to build your own personal brand. Branding can affect both sales and lead generation.
Researchers found that 84 percent of decision makers start their purchase process with a referral. So, the more people recommending you, the more projects and clients you will gain. This is where personal branding can help you a lot.
Simply put, personal branding is the method of people marketing themselves and their expertise as “brands”. This is how you package yourself as a product or service and market it to colleagues, clients, and leads.
Today’s freelancers often make the most out of social media, blogs, and even their own personal website to market their personal brand. The easier people can find your business information and works online, the faster they can touch base with you.
Benefits of Going Legit
A BIR registration and official receipts will increase your credibility as a professional business provider. Applying for credit cards and loans will also be easier now that you are a registered business. Moreover, you and your clients wouldn’t have to worry about cases of tax evasion.
While the registration process can be a bit daunting (especially with the list of application requirements); turning your freelancing gigs into well-oiled business operation will benefit you and your career in the long run. Registration will enable you to work with bigger clients and projects, which translate to greater earnings.
If you’ve been freelancing for a while now and want to take your career to the next level, it’s time to go legit and build your own brand.