How to Make the Decision to Go the Freelance Route in Your Career
I didn’t always know that freelancing was the career path for me.
In fact, for a long time I was excited and determined to climb that corporate ladder. I liked the office environment. I got excited to cruise past goals, implement projects, streamline processes, and impress my bosses.
So what changed?
Well, I did.
It seemed the more responsibility I got, the more frustrated I became that my ideas and time were still under the control of someone else. In addition, the older I got and the more settled I became in where I was in life, the more I hated the idea of a 9 to 5 job (ahem, 9 to infinity – thanks smart phones).
I began to dream about starting my own business and doing freelance marketing and writing.
Others could do it; why can’t I? I figured.
Still, it wasn’t an easy decision. I’d worked my way up to a comfortable salary and loved the industry I was in. What if going freelance full-time ended up not working out and was a major setback to my career? It ended up being one of the best things I’ve ever done, and it may be for you as well, but first make sure you’re ready to take the leap by asking yourself some important questions.
Here are 10 questions you need to ask yourself if you’re on the fence about going freelance full-time.
1. What is Your Network?
You should be able to name at least 20 people you can reach out to about your services who you think would be the right client fit for your business. These can be acquaintances you barely know, but who you’re connected to on LinkedIn. These can also be contacts of friends. When you put pen to paper and start brainstorming who’s in your network, you really should be able to double or triple or even quadruple that 20 number.
2. Are You Sure You’re Fine with Working from Home?
It’s ok if the answer to this is “no” – you can still be a freelancer. You just need to make sure you take the steps to keep yourself motivated and engaged with others, otherwise it’s easy to get distracted and even depressed if you’re a super social person used to those water cooler talks and after-work happy hours. You can find a coffee shop that serves as your office (budget in daily coffees) or a co-working space (which might motivate you to work harder to gain a new client to justify the expense). You can also join online Facebook groups within your niche and find out who lives close to you, then arrange weekly or monthly meet-ups. There are lots of ways for extrovert or easily-distracted-at-home freelancers to thrive – you just need to adequately prepare yourself for those hurdles if working from home will be challenging for you.
3. How Will You Handle Finances?
You’ll want a clearcut plan for how you’ll invoice clients, when and how you’ll be paid, and how you’ll pay expenses. Depending how your business is set up, you may need to make sure your personal and business banking is kept completely separate for liability purposes. You’ll also most likely want to budget for a professional accountant to make sure you’re writing off everything you can and appropriately paying your taxes – for example, did you know you often have to pre-pay your taxes if you’re self-employed?
4. Do You Have a Savings Buffer?
Let’s say your biggest client suddenly utilizes their out clause and cancels your contract. How many months do you have to find a new client to replace that money before you’re operating in the red? If the answer is zero, you may want to build up a couple month’s salary (or longer) in your savings account before you go completely freelance.
5. Are You Treating Your Business Like a Business?
You should have your business registered with your state as a sole proprietorship or LLC. You should also have business insurance. In addition, it’s good to have an already drafted contract you can send clients that has been put together by a lawyer to better protect yourself from a legal standpoint.
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6. How Will You Handle Health Insurance?
This is a tough question for many freelancers. I was luckily able to go onto my husband’s insurance policy through his work. There are other options, though, and they may be pricey so make sure you can handle those costs as a business expense and still be profitable. First, look into the Affordable Care Act as I know some self-employed individuals who have greatly benefited from budget-friendly plans under it. There are also private health plans offered through a variety of health insurance providers. These can have pretty high deductibles so make sure you budget for that and put enough money away to cover that deductible should a health crisis arise.
7. Are You Ready to Hustle?
Being a freelancer is incredibly rewarding, but far from easy. You have to constantly be networking and pitching and thinking of new ways to get clients.
8. Is Your Personality Risk-Averse?
This can be significantly offset by perseverance and that aforementioned hustle, but it’s something to be aware of and comfortable with if you don’t have a large financial safety net. You need to believe you’re going to make it as a freelancer, but you also don’t want to be delusional: will you be ok if it turns out freelancing isn’t for you? What would your next steps be? Figuring out the worse case scenario and having a game plan for it so you’re ultimately ok with it will actually help you be a better business owner, because you can get through the hard times without succumbing to the fear of what if.
9. Do You Have a Website?
You may be the world’s best in-person networker, but you still need a website. It doesn’t have to be anything super fancy, but it should be high quality so it shows you’re a professional, legitimate business.
10. Do You Have a Business Plan?
This is perhaps the most important item on this list for your business success. You need to sit down and put together a plan for your freelance business for a minimum of one year – aim for two. The business plan should include what you offer and what sets you apart from other freelancers, how you’ll make money, profit goals and expenses, competitor analysis, tactics you’ll use to network and grow your client base, and goal for each month/quarter/year.
Come back to One Day in a City every Friday for new Freelance Friday articles that will help you launch and run a successful freelance career! And don’t forget to check out my travel and adventure articles for tips on what to do when you’re not working so you can fully take advantage of freelancer perks.