5 Things to Consider Before You Go Freelance

Freelancing is more popular than ever, and in this so-called gig economy, between 20 and 30 percent of the working age population in Europe and the U.S. already engage in some form of independent work. This number is expected to rise significantly in the coming years, and according to some predictions, the majority of workers in the U.S. will be freelance by 2027.

While being able to manage your own schedule and work from just about anywhere probably sounds agreeable to most people, freelancing also comes with its unique set of challenges. So below you’ll find five important things to consider before you launch your freelance career. (Note that although the exact considerations may vary somewhat depending on your area of expertise and industry, most apply no matter what you do and where you work.)

1. Are your skills marketable and in demand?

Building a client base as a new freelancer is something that takes time, but having the right skills will make the process a lot smoother. The workforce is also changing and evolving faster than ever before, and if you want to stay current in your field, it’s important to keep upgrading your skills.

According to a recent survey by Upwork, some of the fastest growing freelance skills include video editing, 3D modeling, and influencer marketing. Another survey by the World Economic Forum found that soft skills such as cognitive flexibility, people management, and negotiation will be in high demand over the next couple of years.  

Find out what skills are needed in your industry and then take control of your own learning by taking professional courses and workshops, attending industry events, or volunteering. You should also spend some time updating your resume and highlighting the right skills and qualifications. 

2. Do you have a strong professional network?

You’ve probably heard it said that it’s not what you know but who you know, and this is especially true for freelancers. Having a strong professional network is important because potential clients will always feel more comfortable working with someone who has strong references or has been referred by someone they know and trust.

Research shows that employers and HR managers often hire the person they like rather than the most qualified candidate. People are also more likely to want to work with someone who has been recommended by a personal connection. According to one study, referred candidates are 10 times more likely to be hired than other applicants.

If you don’t already have a strong professional network, you should start building it before you make the switch to fulltime freelancing. Start by spreading the word amongst your co-workers and friends. You can also try to attend conferences and join relevant groups on LinkedIn or Facebook.

3. Do you have a financial buffer?

A recent survey by PayPal found that one of the main concerns freelancers have is dealing with an irregular income. It makes sense because although being your own boss means more freedom and flexibility, it also means taking on more risk. Clients may not pay on time and projects you were counting on may fall through at the last minute.

So before you start freelancing full time, you need to make sure you have a financial buffer to cover expenses when business is slow or you’re waiting for payments. Try to set aside enough money to cover at least three to six months of expenses so you won’t have to stress out too much over little setbacks or unexpected situations.

In order to do this, you’ll need to work out exactly what expenses you’ll have, such as self-employment tax, health insurance, and cost of living, and then create a realistic budget.

4. Have you made a workable plan?

If you don’t start out with a clear plan, you may quickly find that you’re in way over your head. Most important, you need to know what your expenses will be like and how many hours you need to work or projects you need to take on each month to cover those expenses.

You also need to know where you can find new clients, how you will market yourself and your services to them, and how you can eventually build a steady client base.

One of the best ways to prepare for freelancing is to give it a test run while you still have the financial security of a monthly paycheck. If it won’t violate your employment contract or company policies, see if you can start freelancing on the side to get a feel for what it’s like to deal with clients, invoices, and marketing on your own.

5. How well can you work on your own?

Not everyone can manage their time effectively or stay motivated while working on their own, so you need to consider your personality and preferred work style. Freelancing can be a bit lonely at times, and one U.K. survey found that although 93 percent of freelancers enjoy being their own boss, nearly 40 percent also reported feeling lonely since they had become their own boss.

Of course, this doesn’t have to be a deal breaker. As long as you comfortable working in solitude and aren’t too worried about not having that daily interaction with co-workers or clients, it is possible to build up a professional network and also maintain an active social life outside of your work. But it is good to be aware of the potential challenges and have a plan in place.

For example, if you think you’d miss the social interaction of a busy office, you could look for co-working spaces in your area. If you’re worried that freelancing will hinder your ability to socialize outside of work, you could look into joining a club that suits your interests, whether it’s sports and fitness or photography. 

Marianne Stenger is a writer with Open Colleges, one of Australia’s leading online education providers. She covers everything from career development to learning tips and the latest research in education. You can connect with her on Google+ and Twitter or find her latest articles here.