5 things to know before you quit and start freelancing
- Jul 23rd, 2013
- 4 Comments
It’s been two years now since I left my job as a marketing director to start my independent design company, and I haven’t looked back. Owning my own design business has been an amazing, challenging and fulfilling experience. Are you thinking about starting out on your own? Here’s five things everyone should know when they’re getting ready to quit their job and become a full-time freelancer.
Ready to quit your job? Be prepared. The day I quit my job was one of the more nerve-wracking days I’ve ever had, but I went into it knowing two things:
Make sure you have some contacts, even if they’re not spending much with you every month. Many times just knowing that you have more available hours can increase their commitment to working with you!
And get ready to be frugal. My first six months had a few lucky breaks and a couple of consistent clients, but even so I found I was taking a pay cut for that startup period as I worked to find new clients. My advice is to try to be in as flexible a financial position as possible when you start. Live frugally, and cut your monthly expenses as much as possible before you start – it’s definitely not the time to buy a new car or start an expensive hobby!
As much as you want to think positively when you make this change, you should also consider the worst. Write your exit strategy as a contract with yourself, and what conditions will trigger this Plan B. It might be dipping below a certain amount in your savings, or having a certain number of billable hours per month by a particular date. Whatever it is, make that deal with yourself, tuck it away, and don’t dwell on it – just be ready to use it if and when the time comes.
Ever seen a “be your own boss” ad, where people work four hours a week and are vacationing in paradise the rest of the time? Don’t believe the hype. Being your own boss is a lot of work, especially when you just start out, and it’s probably a different kind of work than you’re used to. Not only do you have to handle production, but a large portion of your work week will be spend sending out bids, writing proposals, following up on leads and projects that are out for client review, tracking your invoicing and expenses, and supporting past work you’ve published.
To make a living independently you need to be able to work for yourself if you’re not working for someone else. Spend time not spent on client work or bidding for your own marketing and network building. This unpaid time can be some of the most valuable time you spend in terms of growing your client base and perceived authority in your field. Of my first several months of working independently, I often worked 50+ hour weeks, and only about 15-20 hours a week was spent on billable client work. The rest of my “job” was networking, updating my website and marketing materials, writing proposals, and making an effort to get my name out there.
If you want to succeed as a freelancer or start-up firm, be able to make work for yourself that furthers your interests, and work hard at it, even if you’re not 100% sure what the payoff will be. If you want to go independent, go with the mindset that the times that you have nothing to do are actually the times where you have everything else to do.
One of the biggest mistakes I see with freelancers are those who don’t consider market value when pricing their projects. If you really want to make a living as a designer, you have to sell your services at a realistic rate. It’s not the same as having a day job – now you have business expenses, health insurance costs, and non-billable administrative hours to consider.
What’s the right market value for your time or service? It depends on your area and the going rates. It’s likely you can find out either by having worked for a business that provides similar services in your area, or by doing some simple research to find out what others are billing. Price yourself too low and you face problems from potential customers who don’t take you seriously – or the inability to get enough hours to cover your expenses and still make a reasonable living. Price yourself too high and you won’t get work. Find a good starting rate you’re comfortable selling and stick with it for a while – eventually you may need to raise or lower your pricing, but with enough advance notice most of your clients will understand and continue to work with you.
Make the most of your time by doing what you specialize in and working with other freelancers for the rest. If you’re following the advice above and spending time networking with others, you’ll find there are people who do the things you don’t like to do, but are necessary to complete projects. By working with others you can focus your time on what you enjoy and are efficient at doing to improve your ability to deliver projects.
Collaboration can improve your client base and portfolio quickly, and you’ll tap into markets you may not anticipate when you initially go independent. For example, I serve many companies directly as a designer and consultant, but over time I developed relationships with companies who focus almost exclusively on marketing strategy. Now in addition to my direct clients, I collaborate with these companies on behalf of their clients. This benefits both my company and theirs – it reduces the time I spend selling instead of producing, augments what their company can offer to their customers, and improves their bottom line through reselling my services at a small markup.
One of the great benefits to being an independent designer is discovering unexpected opportunity to grow your client base and your ability to make a living through networking with other professionals in related but non-competitive fields.
Set yourself up as an actual business. Acting as a sole proprietorship isn’t the way to go – there are far better options out there. Set up an LLC or other business entity. Find a local accountant who can advise you on taxes and help you deduct your expenses. And finally set up a business bank account to use for business income and expenses. Not only will having an LLC give you the added benefit of separation from your personal funds, but prospects and clients will take you more seriously knowing that they are working with a business rather than a fly-by-night individual.
Striking out on your own as an independent designer can be an incredible experience – as long as you go in prepared! Just remember, there’s a lot more to being a freelancer than the dream of working your own hours and having free time whenever you want. It takes work, discipline, and a willingness to take on challenges you may not even see coming. And with a little luck and elbow grease, you’ll find that it’s the best job you could ever have.