According to Forbes, a recent study indicates that over 35% of Americans now identify themselves as freelancers. In short, these are people who are self-employed and may work for one or more client, but as a rule they’re not bound to any.
Freelancing certainly has its benefits. You’ll certainly save money on travel, a professional wardrobe and even on food. But before you begin exploring a career in freelancing, there are a few things you need to know.
1. Freelancing is a job
If you’ve somehow been led to believe that freelancing will afford you the opportunity to work in your pajamas after waking up at noon, you’re only partially correct.
You can work in your pajamas. But it’s not recommended. If you truly want to make it as a self-employed freelancer, you’ll have to put every bit as much effort into your career as you would a traditional job.
Once you leave your desk job, your earnings are your responsibility. You’ll create your own paychecks and you’re responsible for finding your own clients. It’s going to take a strong head on your shoulders and an “early to rise” mentality to get started.
If you treat freelancing as a career, it can become one for you. Treat it as anything less and you’re guaranteed to fail.
2. Keep your finances in order
When you leave your desk job, there will be no one handing you a paycheck. That said, there will also be no one to hand you a W-2. It’s for that reason that you’ve got to keep close watch on your finances.
The most prudent advice you could follow is to hire an accountant, at least for your first year of self-employment. Meet with her, and she can help you devise a plan to set aside money to avoid a hefty tax bill come April.
Should you choose not to hire an accountant, the very least you’ll want to do is invest in a good bookkeeping software. Enter your expenses and your income. You’ll need a profit and loss statement to apply for credit, too, so be sure to keep it up to date.
Finally, save each and every piece of paper that comes your way, from invoices to clients to that bill for your wireless router. Many items are tax deductible; even a dedicated office in your home is deductible in the United States.
3. Diversify your eggs
That is to say, don’t put all your eggs in one basket. Your career as a freelancer may be in graphic design, information technology, writing – any number of things. But all fields will have one thing in common: they’re volatile.
Don’t rely on only one client to pay your bills. Instead, market yourself using the vast number of platforms on the web, or through local venues. Sell your services to everyone you meet, and develop a good “elevator pitch.”
It’s also advisable that you learn a bit about the stock market. Even if you’re not interested in becoming a day trader, having a healthy portfolio can help to secure you financially should a dry spell occur. And a dry spell will occur. Learn about penny stocks, or about investing in blue chip stock. Then use that portfolio if you ever need cash to fall back on.
4. Don’t expect a miracle
Again, you’re going to have to market. And it’s strongly recommended that, before you even think about hitting send on that resignation email, you’ve got a freelancing job lined up. (Also, please don’t email your resignation. That’s tacky.)
Now, there are some fields which will, by nature, pay more. If you freelance as an IT security analyst, you’re going to get paid more per job, on average, than a freelance transcriptionist. But the truth is that it’s quite viable to make a full time living as a freelancer. It just might not be right away.
So while your IT counterpart just landed a gig which paid $3,000 for a few hours’ work, your first job may pay a tenth of that. Don’t expect to be earning a full time income right away, but don’t be discouraged either. Continue to market, and the work will present itself.
5. Enjoy your freelancing career!
Freelancing isn’t waking up at noon and working in your pajamas. It is, in fact, much harder and much more mentally taxing than many 9 to 5 jobs. But the perks will come, and when they do, you need to enjoy them.
You are going to work many, many long hours and you’re going to work every day. But, while you do have clients to answer to, you won’t have anyone micromanaging you. Want to bring your nephew to the pool on Tuesday morning? You don’t have to ask anyone. Prepare to work for a few hours in the evening, and go ahead.
Need to schedule an emergency dental appointment? You’ve got no one who can tell you no. Feel like a long weekend? Sure! If you’re caught up on work, there’s no one who will miss you in the office. Turn off your phone and go.
Freelancing is by no means glamorous. It’s hard work, and if you wish to succeed, you’ll have to treat it as seriously as any other job. But as long as you keep good business sense about you, you’ll do just fine. Work hard, prepare financially, and enjoy the perks of working for yourself.