Freelancing is pretty much a buzz word 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 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.
In the Philippines, the freelancing practice has pretty much caught on. 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
The first thing you need to do is to register your business. There are three types of business ownerships in the Philippines. A sole proprietorship is a type owned by a single individual, and 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 and is also responsible for all the liabilities the business may incur.
In terms of taxes, the individual and his or her business are considered 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, a DTI trade name application is no longer necessary as the individual’s name will be used as the trade name.
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, as it 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, and 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.” Basically, this is how you package yourself as a product or service and how you market it to colleagues, clients, and leads.
Today’s freelancers often make the most out of social media and 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 wouldn’t have to worry about cases of tax evasion, as well as your clients who choose to work with you.
While the registration process can be a bit daunting, especially with the list of application requirements, in the long run, turning your freelancing gigs into well-oiled business operation will benefit you and your career. Being registered 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.