Many software developers who were once full time employees of a large or small company have now decided to start a career as a freelance software developer. Not only are the hours more flexible (giving you the possibility of more freedom), but even the pay can be better in some cases. It isn't as difficult to become a freelance software developer as you might think, either. Here are 5 tips for starting out in your freelance business...

1. Know How Much You Need to Make

First, as freelance software developer, you will need to know how much money you need to make in order to survive. You can charge by the hour or by the project, but when people come to you with a project, you need a good idea of what your prices are. Research some other freelancers and find out what the going rate is to get a good idea of what you need to charge.

One of the best ways to figure out what you need to earn is to consider what your monthly expenses are. Once this is established, see if there are any areas that may be cut back. It is important to add a couple of extra hundred dollars onto your monthly bills for "incidentals." Next, divide that sum by 4 and then divide that sum by 32 (or any other number of hours you hope to work per week). This is how you will arrive at the hourly rate you will need to maintain your standard of living.

2. Create an Advertising Strategy

You must consider who your intended client will be, and develop advertising and marketing strategies to reach this group. Know that advertising may be as simple as posting ads (on bulletin boards and in news media) and hanging up fliers. Advertising can also be networking, attending conference, writing in a blog, creating a website, and even writing articles for free directories such as Ezine Articles. Posting your website's link for clients to find at the end of your article will lead them back to your site. Be creative in your advertising endeavors, and focus on ways that will deliver the most for your budget.

3. Join Freelance Websites

There are some very good freelance websites out there that can help locate clients. One such site is Elance; you can bid for jobs by naming your price and terms for particular project. Some people do very well on Elance. Other website out there include: GetaFreelancer, Guru and DemandStudios.

4. Keep Accurate Records

Record everything you earn, as well as your expenses and your losses. Come tax time, this will be very important. Hire an accountant if you feel you are overwhelmed. It will be your head if you don't keep great records.

5. Research Your Field

Always be up to date on what is happening in your field. You don't want to be outdated, and especially now as a freelance software developer, you must be competitive.

Your clients will rely on you to know the latest information, what the current software trends are and how competitively you can price. Knowing all of these things will make you look more reliable and useful to your clients.