Freelancing is becoming more popular, as people increasingly branch out on their own and say goodbye to the 9-to-5. If you’re also looking to become a freelancer, here are the six things to consider before you do.
1. What are my marketable skills?
In order to be a successful freelancer, you need to provide a marketable skill or service. This can include writing excellent blog content or being a tech savvy software developer. Whatever it is you do, you have to be a confident, independent, skilled one-person band. You also have to understand what makes you different from the competition. If you’re working in a popular industry such as social media, keep in mind that the market for social media managers is pretty saturated. So, you’ll have to offer something that will make people want to hire you over the next person.
2. Do I want to be my own boss?
When you’re self-employed, you really work for yourself. You set your own schedule, you determine the work you’re going to take on, and you function as your own business. Freelancing is great for someone who wants to be their own boss instead of working for someone else. If flexibility is your top priority, freelance work could give you just what you want because the hours you work and where you work are at your discretion (as long as you can still deliver to your clients of course). Some people are able to freelance for half of the year and take the rest of the year off—which is something you won’t find at a corporate job. You also have much more independence in your work because there isn’t anybody tracking your daily activities—you operate all on your own.
3. Can I handle the financial risk of not receiving a regular paycheck?
Being in full control of your own finances is the biggest difference between self-employment and full-time employment. In order to be successfully self-employed, you must understand the risk that comes with being fully responsible for getting clients, and essentially fully responsible for getting paid. You don’t receive a traditional paycheck and instead are paid per client for your services. The compensation you receive for providing your services is determined by you, and the client you’re working with agrees to the rate prior to work being done.
One way to find clients is to have a profile on sites such as Upwork and Fiverr where people go to seek out freelancers. You also need to charge a rate that will give you a living wage, but your goods or services also need to be worth the price. When charging for your services, it’s important to have the agreed upon cost in writing—you don’t want any confusion on the cost once the job is done. You should also consider the costs freelancers incur that traditional employees don’t, such as needing an office space and electronic equipment. And you need to consider your own taxes because taxes aren’t deducted from your paychecks. So, before you start freelancing, it would be a good idea to talk to a tax professional about how much money you should be setting aside in order to pay your taxes during tax season.
4. Can I afford the benefits I need?
Aside from monetary compensation, freelancers are responsible for their own benefits. This includes health insurance, vision insurance, retirement plans, and more. Since you don’t have a company that provides these benefits for you, it’s up to you to enroll in plans that work for you. If you recently were employed by an organization and you were receiving insurance benefits, you could look into COBRA insurance. With this option, you’ll receive the same insurance you did before but at a higher price due to now having to pay the company's portion of the bill. This option only lasts about 18 months, but it can help buy you some time to find a new insurance plan. If this option doesn’t work for you, you could also go to healthcare.gov during open enrollment and find plans that work for you. Finding all the benefits you need will definitely take some time and research. Look into what your state offers, what the federal government offers, and what you can simply apply for online.
5. Am I willing to negotiate my pay and stand up for what I’m worth?
Reflecting on your strengths and weaknesses will help you decide if freelancing is a good path for you. If you’re very independent, extroverted, and never afraid of taking a risk, then self-employment could be great for you. One key skill is negotiation, because sometimes freelancers have to negotiate their compensation more frequently than a full time employee. You need to know your worth and stand behind it to ensure large corporations don’t take advantage of a one-person-band like you. Having good communication skills is essential as well, because that will help you get the most clients. You don’t have a sales department that gets clientele for you – you are the sales department.
6. Does it make sense to ease into freelancing by keeping my full-time job (for now)?
As more people find themselves picking up a side hustle to accompany their 9-to-5, starting your freelancing career this way could be a happy medium. Completely breaking off on your own comes with a lot of risk, but if you keep your full-time job while you do it, you can maintain some stability in your life. You could use your nights and weekends to develop your brand, find clients, and simply get the ball rolling on your freelancing career. If business picks up, you can consider leaving your full-time position and freelancing full time. If it takes a while to build a reputation and clientele, you’ll still have money coming in the door to pay the bills.