I started freelance writing in 2016, but I didn't quit my full-time job until 2017. Within just a few months of freelancing, I was making more than enough money to replace my full-time income (and then some). But I waited almost a year before officially quitting because I needed to see if I could sustain my success. I wanted to keep a safety net so I could see how work might ebb and flow over the course of a year. I wanted to build a repeatable, predictable way to acquire new clients so that if one client relationship ended, I could quickly find and onboard another client. I played the long game and it worked -- I've tripled my income, work four days a week, and couldn't be happier.
I started out as a plumber, and following my entrepreneurial spirit set up my own business back in 2005. I learned early on that my time was valuable and it was best used on higher level tasks. Recruiting a part-time assistant to cover the phone, basic admin, and accounts is invaluable. Even though a lot of the tasks took just minutes, shifting between one task to the next can easily take up the best part of your day. Investing in support early on, will allow you to scale up your workload faster without it impacting on your service.
As an employee, you spend all your time working in someone else's business, which means you don't have to spend time working to build the business. When you become a freelancer or self-employed professional, that has to change. Expect to spend 25% or more of your time working on your business. That's time that you aren't actually doing the client work. It's time you are spending planning, marketing, handling administrative tasks, etc. Make sure to dedicate time each week to spend working on your business in addition to working in it. This is the most important shift you can make!
If possible, I encourage every employee to take some time to build a business while they're working for an organization. You can easily scale a successful side hustle if you do it right. Quitting your job to become a freelancer the next day isn't practical. It can take months to build a dedicated group of clients, and you might not have that time. Set a date for when you'd like to quit your day job. Spend that time growing your network on LinkedIn and taking on as many clients as you can fit in the evening and the weekends. You'll be glad you did that once you are ready to go full-time with freelancing.
The number one thing that helped me when I shifted to freelancing was being surrounded by other freelancers. I joined freelance Facebook groups, Slack communities and went to in-person meetups. This meant that every time I had questions about freelancing, I could ask questions in these groups and get a lot of perspectives and good answers -- often personalised to my situation. This was incredibly useful when it came to pricing and money. I could easily ask others how much to charge, what was market rate, etc. The result was I was a lot more confident when it came to charging high prices, because I knew that it was fair and in line with the market rate. Also, freelancers are always happy to help other freelancers. If you've got several questions, ask the group if anyone would like to hop on a call and talk about how they've done things. I've done this a lot and I've also offered advice to others. Hands down it's the most useful tactic that helped me transition to freelancing!
Freelancers and self-employed professionals should be prepared to market themselves. Independent professionals have to secure their own workflow. This requires getting their name out to potential customers and strategic partners that can optimize their impact. The freelance economy is incredibly competitive, especially if an individual is trying to be within the top tier of earners for a particular industry. Self-employed professionals can gain an edge over their competition by creating awareness for their personal brand. Effective marketing is the cornerstone of generating awareness. Freelances and self-employed professionals will see their marketing efforts payoff as their business gains traction and they grow their customer base.
As a business professional, you quickly learn that in order to stand out and get the clients your business needs to survive, you have to be original. You definitely have to stand out if you want to compete with the numerous other professionals in your space. And, unfortunately, trying to be everything to everyone makes it easy for you to get lost. It's very hard to market yourself if your targeting is not precisely focused. So what can you do? Find something you do well or offer a new perspective on your business. Carve out that niche and go after it! If you focus on being unique, you will be able to attract the attention of potential clients and differentiate yourself from the competition.
Schedule and honor your workday. When you’re shifting from an employee to a freelancer or self-employed professional you need to immediately get your work schedule down. Since you’re switching from answering to your boss, to being your boss, you have to give “your boss self” the same respect you gave your old boss. Don’t make alterations or exceptions to your workday, stick to the schedule you made and honor it. By doing this, you’re creating a separation between yourself and your work self which is now a business and needs to be treated as such.
The one thing I learned from shifting from being a full-time employee with a fixed job, fixed working hours, and fixed pay, to being a freelancer for a short period before I landed my next job is that, you must be willing to change. Change your mindset of taking your job for granted, change the mentality of waiting to be given jobs or projects, and learn to accept the fact that you are on your own now. This means you have to start taking charge, start having more initiative, go the extra mile whenever possible. All the while, remember to stay humble as anything could happen. Your humility and being down-to-earth as a person could one day save you when you experience career difficulties. This way, you are able to adapt to future changes and uncertainties in your career no matter what happens.
Research how paying federal and state taxes will change for you. It can be a real shock to go from working off a W-2 to 1099s. Getting a set paycheck every week from a company automatically deducts for social security, Medicare and other state and federal taxes. Freelancers have to plan their tax burden ahead of time due to receiving their payment in full without deductions. Consulting with a tax accountant can help you with perspective and advise on what strategy is best for you in paying.
The best tip for people shifting from an employee to a freelancer/self-employed is to set realistic expectations for how much work they can take on. It can be tempting to try and take on too much work when first starting, but this can lead to burnout. Instead, start slow and gradually build up your freelance business. This will help you create a sustainable freelance career that you can enjoy for years to come.
Taxes, permits, and business formation, if applicable, should be thoroughly researched and discussed with both a lawyer and a tax accountant. When switching from a salaried position to self-employment, it is easy to ignore important things such as establishing your business to minimize your tax liability. As you expand and your income increases, taxes might catch you off guard and impede some of your hard-earned progress.
If you’re shifting to a freelancer role, one important thing is to have enough clients to make the change sustainable. Many freelancers work with a certain number of steady clients, but leave room for that occasional special project that they’d like to fit in. You can even work with a recruiter to ensure you’re aware of new, exciting opportunities. Also, you’ll always want to maintain good relations with past employers, and keep in touch for the possibility of future collaborations. Ultimately, being a freelancer means being prepared. So, research for apps and tools that will not only make your work easier, but will keep you organized and on track to reach your goals.
In terms of taxes, transitioning from W-2 to 1099 can be confusing for some. It is important to recognize that as a self-employed freelancer, you need to keep track of the taxes you owe and try to pay them throughout the year rather than right before tax day. Make a long-term plan in terms of how to keep up with your tax payments so that you will stay on track without acquiring any late penalties.
Freelance and self-employed professionals should minimize their expenses. Freelance professionals have the benefits of freedom and self-determination in their work lives. However, these benefits cost the security that comes with being an employee. Benefits like medical care and retirement savings all fall on the individual on a self-employed basis. By minimizing their expenses, freelancers and self-employed professionals can afford important benefits like health care and retirement planning while maintaining their freedom.
Self-discipline is a key factor in succeeding as a self-employed freelancer. While it can feel freeing to not have to work for someone else, you still need to create your own schedule and make sure that you are being productive on your own in order to earn the amount of money that you desire. It is not worth it to become lazy just because you are your own boss.
Anyone who earns income from one or more freelancing gigs is going to pocket all the money they earn - at least up front. But when it comes time for Uncle Sam to collect, understand that you will have a lot to pay back. Gone are the days of filling out a W-2 form and forgetting about taxes until you file. Consult with a tax professional, if necessary, and don’t wait until the 11th hour to do so. Think about what you will owe the federal and state governments long before your deadline approaches. You should be setting aside money for that purpose every time you get paid, whether it’s weekly or monthly. Don’t procrastinate, otherwise you will suffer a significant sticker shock when April 15 rolls around.
Working for yourself is an opportunity that provides freedom and flexibility that is uncommon as an employee. However, in order to sustain it, you must stay disciplined and hold yourself accountable for your work. With no one monitoring you, it’s up to you to ensure that your work is completed efficiently and on time. If needed, you also must establish a schedule and routine that keeps you productive. Working as a freelancer means you are your own boss now. Stay diligent and disciplined to make a successful transition from an employee to a self-employed professional.
Self-employment is an emotional journey as much as it is a physical, mental, financial and spiritual journey. Self-employment comes with its own emotions, which are usually brought about by many factors. It will be helpful if you have a mentor to help you with some of the most demanding challenges you will experience. Having some support from your loved ones also helps a lot. So, I suggest staying close to the people who motivate you to continue moving forward.
It's difficult to run your own company. It is not for everyone, and even the finest company ideas do not always succeed. This actually happens rather frequently. While statistics vary by research, it is believed that more than half of all enterprises fail, or at the very least fail to prosper. Furthermore, other circumstances in an entrepreneur's life may change, requiring them to return to work, whether in the corporate sector or with another small firm. So I asked Catherine Morgan, a career-transition coach who works with entrepreneurs and anyone wishing to move to a new role through her own organization Point A to Point B Transitions, for advice on how entrepreneurs should position themselves while applying for corporate employment.