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Is Becoming A Freelancer Right For You?


It’s the time of the year where people start thinking about resolutions.

Eating right. Exercising more. Becoming a better partner or parent.

It’s also when entrepreneurially-minded employees start to question whether they should work for The Man for yet another year, or finally go out on their own.

In this article, I’m going to dig into what it really means to run your own business, specifically a client services business. I’m also going to look at a few hard truths that — if I do things right — might make you reconsider whether freelancing is right for you.

You might think, given the business that I run, that I want and encourage everyone to become a freelancer. And until recently, that was somewhat true. But the more I talk with freelancers and those who want to start freelancing, the more I’ve learned about the real pros and cons of being a solopreneur.

Why you might reconsider becoming a freelancer

Many of the people who worked for me at my agency were former freelancers.

They gave up the independence of working for themselves to work with me, and willingly confined themselves to my office for most of the workweek.

Why would someone go backward?

Well, it soon became clear that the motivating factor behind giving up freelancing was the uncertainty of it all. Most freelancers don’t have a strategy for getting clients. And even if someone has a solid base of clients, there’s no guarantee that they’ll have work when they need it.

And a lot of the freelancers-turned-employees I’ve talked to about this pointed to obligations as a big reason for transitioning to traditional employment. Many of them are heads of their household and are financially on the hook for supporting their spouse and possibly some kids.

Another was something that I think a lot of entrepreneurs either ignore (as a temporary inconvenience) or embrace: you’re always on the job. New lead on Saturday? Let’s field it ASAP. Need to work extra to take care of your mountain of responsibility? OK.

Left untreated, this quickly leads to burnout. And after a few years of the high-stress that can accompany doing client work and finding prospective clients and selling these prospects on working with you, the idea of “show up, do your work, get paid” starts to sound really appealing.

Trust me. There are days I want to throw in the towel and go back to that halcyon world of bi-weekly direct deposits.

Besides the instability that comes without a serious sales and marketing strategy (most freelancers don’t have one) and the burnout that can come from over-working or over-obsessing, there are other things that can cause you to regret freelancing full-time:

  • Assuming you’re ready before you actually are. One actual client who promises you that they have “a huge project” is often insufficient. Don’t put your eggs in one basket. Work to aggressively build your network, even when you’re working full-time.
  • Not realizing there’s a big difference between your last job and your new job. If you thought freelancing would mean doing what you’ve always done, but without a boss… think again. You’re now running a business, and you’re in charge of the marketing, sales, contract negotiating, product fulfillment (that is, doing what you do best), invoicing, and occasionally chasing after owed debts.
  • If you want to do <your skill> all day, stay an employee. I can’t overstate this enough. Many of us are really passionate about our craft. We love doing it, and we want to do it most of each work day. This ties in with the point above, but being a freelance consultant involves much more than just doing whatever it is you excel at.

Now, why you SHOULD become a freelancer

There are plenty of reasons to quit your job and go out on your own.

The “gig economy”, as it’s known, is on the rise.

Savvy companies are looking for people who can jump in, solve a specific problem, and then leave.

And the rise of cloud computing, really fast Internet, and tools like Slack and Skype are allowing business to get done, even if everyone’s spread around the globe.

It sounds trite, but if taking full ownership over your own success is appealing to you — then you should seriously consider becoming a freelance consultant. It’s the quickest path that I know of to self-reliance. Unlike building a product like a software-as-a-service or writing a book, the “feedback loop” between starting and succeeding is pretty tight.

You can be courting a prospective client today, and billing them tomorrow.

More turnkey models — the sort that permit you to wake up to payment notifications from strangers — require more patience and time.

And they’re also not as guaranteed.

Many entrepreneurs invest time and money into building products that nobody wants, and there’s no way to send someone running back to the safety of employment like seeing their project stagnate and die.

Freelance consulting is a great way to “be your own angel investor” and subsidize the development of what you want to one day live off of. Unlike most salaried employment, you don’t need to freelance full-time.

You can, quite literally, double your freelancing rate and work half the hours and make the same income.

It’s hard for a lot of new entrepreneurs (including even ones who have been around for some time like myself) to not think, “it’s 9:30am on a Thursday morning. I should probably be at my computer working.”

But it doesn’t need to be that way. You don’t need to work full-time. Only you can set your availability.

And this leads me to my last major point:

You have permission to do whatever you want. There are no more gatekeepers.

If you want to make more money, charge more.

If you’re tired of having your clients micromanage you, set the right expectations when you onboard your clients.

If you want to scale your business, nothing is stopping you.

You wouldn’t believe how many questions I get from readers asking things like “how do you trick your clients into paying you upfront?” or “how do you bill by the week?”

My answer is always the same: That’s how my business works. That’s my process. Take it or leave it.

This might lead you to think you need to be a hard ass curmudgeon to stomach becoming a successful freelancer. But that’s not true either. I’m always trying to shine some light on why it’s better to pay me by the week and upfront. It’s not “because I said so.” Instead, “here’s why I do it this way, and why it’s better for both of us.”

 

But isn’t freelancing risky?

As an identity, freelancing is on the rise. According to a study put out by Intuit, in just ten years 40% of the workforce won’t be full-time, salaried employees. And for a lot of people, this is scary. Just a generation ago, we lived in a world of pension plans and corporate loyalty. More of us are becoming free agents.

I get asked from time to time about how “safe” freelancing is, and whether it’s worth giving up the 9–5 to pursue owning a small studio or consultancy. I have a somewhat unorthodox definition of risk as it relates to business, and today I’d like to try to make my case.

The Single-Payer System

Most people are employees and have a single source of income. They get up each day, go to work, and collect a paycheck on a given interval. This is ideal, as typically we pay for stuff on another set of intervals — on the 5th the mortgage is due, credit cards on the 15th, car payments on the 25th, and so on. Employer income and personal expenses tend to counterbalance themselves quite nicely

However, the perceived stability of getting paid on a predictable schedule comes with a cost. You have one client, one customer — your employer. In some states and countries, it might be more difficult than it is here in Virginia to sever the employee / employer relationship, but at the end of the day it’s still a one-to-one relationship.

To me, this is extremely risky. There are environmental factors — the company folding, downsizing, whatever — along with a number of internal factors that could cause you to be out of work.

Life as a freelance consultant

When you finally quit your job and go out on your own, you’ll have swapped one income source for a number of sources, most of which come and go. And this volatility means that revenue can often be unpredictable, even though this can be mitigated through upfront billing, which makes balancing our personal monthly profit (client revenue) and loss (personal expenses) tricky at times, especially if you aren’t the best at budgeting and saving.

Many freelancers can rightfully feel like they have many bosses. Being that for the average freelancer the arrangement is “I’m selling my time for $XX” an hour, this isn’t that far off from salaried employment where you sell your time for $XX,XXX a year, so the arrangement isn’t that much different. The big distinction is that the freelancer here needs to wear a lot more hats (sales, accounts receivable, accounts payable, etc.) — they can no longer just show up and expect that deposits will hit their checking account twice a month.

With this arrangement, you might have 3 active clients, which means a third of your income can dependent on one individual client. If one of your clients were to walk, your monthly income would take a big hit, but your expenses would be more-or-less what they typically are.

When people think “freelancing is risky”, this is exactly why they maintain that belief. You have a small number of income sources. Any of these income sources can disappear in a moment’s notice. And your finances, unless properly tended, can go into spasms.

Take a look at this guide for starting a freelancing business, and be sure to calculate your rate and make sure that you’re bringing in enough money to match your lifestyle.

The Low-Risk Entrepreneur

If an employee has an employer and a freelancer has clients, the entrepreneur has customers — and lots of them. The low-risk entrepreneur isn’t dependent on any particular source of revenue, which has the tangential side effect of not being beholden or commanded by any particular customer. The diversity of their income makes their businesses generally removes much of the risk, save for any unforseen market upheavals (did I ever mention that the first company I started out of college was lead generation for mortgage companies circa 2006? Market upheavel.)

Take my business. I still sell my time, but I sell a lot more things. Books, software, classes, and now even a WordPress plugin. Literally hundreds of people pay me each month — some a little, some not so little — which makes me totally unfireable. I can wake up tomorrow, and know that my business is secure. This is something the typical employee or freelancer can’t do.

However, you might not have an arsenal of products that are being sold in your sleep. That’s fine, I didn’t always have these either. I’ve slowly built products over the last two years. But even before I got into products, when I was running my consulting business, mitigating the risk of the single or few payer system was high on my list of priorities.

In closing, if you want to take full control over your future…

  • You want to set your own hours
  • You want control over how much money you make
  • You want to spend some of your time R&Ding your own products
  • You want the pride that comes with owning a brand that you’re responsible for

…then becoming a freelancer is a great way of achieving that. And there’s no better time to start than now.

 

  • Coderkat

    I’m working a full time job and freelancing in the evening. Because of financial commitments, I can’t take the leap right now, but I am working towards this. The evening gigs have consumed all time and I haven’t had a chance to prospect for new businesss other than networking, which I dedicate about 12 hours a month to – belonging to networking groups and I’m on the board of several organizations (this helps establish credibility in my community). I just purchased your class on double your freelancing rate and I’m really excited to receive the tools (and APPLY them) to be able to make that step…

  • taztang68

    I’ve had cancer and still paying on medical bills so haven’t had the means to get the courses done that I need, to be a credible webdesigner, so I’m looking for either a job, where I can do what I truly love (webdesign) or a way to get the courses I need, and take it one assignment at a time, until it’s a full time job..
    It’s not so much of “what is keeping me back”, but more a “how can I get it to work”. I’m learning as much as I can on” what to do, not to do, consider and not even think about”, in owning your own business, and although a challenge, I’m pretty sure I got my second chance to make a better life for us, and I’m working on making that happen.

  • I’m a full time freelancer by accident, I lost my job exactly 1 year ago, since I was always taking small projects on the side I decided to go fulltime instead of looking for a new job.

    It’s been hard, but a few months ago I found you on twitter and I’ve learned a lot, I’ve been raising my rates on each new project I get and I’m trying to build small products on the side 🙂

  • MJ

    Ok. I echo Coderkat. I’m employed FT with a software company, doing freelance on the side. I’ve been building my freelance since 2004 and this year my nights/weekends earnings exceeded my FT base pay. Now I’m asking the question, why am I putting in 40+ hours for a company when I can make more than they are paying me in a fraction of the time? I want to make the leap, but the biggest hang up for me is that I know transitioning to straight freelance may end up taking even more of my time than my current situation. Any recommendations on setting boundaries so that work doesn’t consume family life?

  • Dave Aronson

    I’ve been freelancing, er excuse me I mean *consulting*, full-time (at least, when I *have* clients) as a software developer since 2011. Factors that helped me make the jump:

    – Patient and understanding wife with a stable and well-paying job, including health benefits.

    – Good savings, for both of us.

    – Strong desire to have better control over which technologies I got to work with, get training in, etc., to avoid going obsolete.

    – Strong desire not to face Washington DC area commuting conditions.

    – 26 years (now 30) of experience, giving me much more credibility than when I tried it 21 years prior and lived mostly off my meager savings for two years.

    – Several years of Toastmasters, helping me “fake being an extrovert” so I could actually communicate with clients much better, including turning *potential* clients into *actual* clients… plus the confidence to try.

    – Having just been “let go”.

    It was rough at first, as I didn’t have much experience with the specific technology stack I knew I wanted to get into, nor business. I devoted time to saw-sharpening (on both that technology and *business*), and networked like crazy. For the past three years, I’ve grossed six figures, and I have a client lined up that should give me six figures for _just the first half_ of next year. I have almost 2.5x’ed my rate between my first paid gig (this go-round) and the upcoming client, by raising my rates after each project.

  • Carrie Hane Dennison

    I became a freelancer because I couldn’t survive in the environment I was in. It was a stop-gap measure to make a quick move and figure out what I wanted. That was 4 months ago and I cannot imagine going back to FT employment. I have been doing mostly subcontracting for agencies, which is OK but not what I want to keep doing. I’m still in ramp up and had a slow month, but that has given me motivation (and a bit of time) to do the marketing and sales to build my client base.

  • Jesper de Jong

    I’ve been a freelance software developer for the past 7 years, since the beginning of 2009. Before that, I’ve worked at an IT services consulting company for more than 10 years, also as a software developer. Starting as a freelancer was one of the best things I ever did in my career, I absolutely don’t regret it and I certainly don’t want to go back to being an employee.

    Good software developers are very much in demand so even without any marketing plan at all you can easily get a job. I’ve never been out of work as a freelancer and I get contacted by headhunters and agencies every week. I don’t worry about not having work, and I also think the security of a permanent job is overrated.

    What I find a lot harder is getting away from the time-for-money regime, and getting rid of middlemen (those headhunters and agencies) that want a piece of my hourly rate. I’d love to be able to do fixed-price projects so that I have more freedom over my time, but selling that is a LOT harder than taking on time-for-money jobs and I haven’t succeeded with that yet.

    I’m looking forward to your book.

  • Brittany Gardner

    Brennan, as always you’ve shared some valuable information here! I am super excited about your book and will be on the lookout for it. I became a freelancer because I was absolutely miserable at my 9 to 5 job. I was working in a field that had nothing to do with my degree and I wasn’t using my creative mind at all. I started to freelance while I was still working my miserable job but I finally realized that I couldn’t balance the exhausting mental demands of my job and run my own freelance business. I was always tired and burned out and couldn’t complete my own tasks for my business. Not to mention i went through some terrible mistreatment at my job which ultimately helped me make the decision to just leave my job and work for myself. It isn’t easy being a freelancer but I don’t regret my decision. I have my sanity back and feel like I’m working within my purpose. I do wish that I’d had a strategy or some type of business plan in place before leaving my job but again NO REGRETS here!

  • Liam Carter-Hawkins

    Really looking forward to this book Brennan, I think the mindset is something very few people actually take seriously considering without it none of the rest is going to work – I’ll be buying a print copy!

  • Meghan Giglio

    Thank you, Brennan! I always enjoy reading your experience and your expertise in the field of Freelance consulting. It helps keep me going as I build my own business! I look very forward to your book, it will be on my watch list 🙂 Cheers!

  • steve wantong

    Brennan, I am really excited reading this post; You are all right when You say freelancing is not for everyone.
    Being a freelancer, my beginning have been paintfull; But now I can say all is going so easy;
    What I want to highlight here is that most freelancers fail not because they have not the right skills; but because they give up so soon before results appears. The real problem is that they have to change their MINDSET for see success. That is the Key.
    I am waiting for you next book.
    Take care of you.
    God bless you.

  • Richard Garand

    I became a freelancer instead of getting a job because I couldn’t stand the idea of being ordered around when I thought I knew better. After a few years I learned that some of my ideas were not so good 🙂 But I did get to a point where I could deliver a lot of value for clients, and they actually change what they do based on my advice instead of just telling me what I should be doing all day.

    Managing the unsteady income has definitely been a challenge. Simply charging more helps, but doesn’t completely solve the problem. To really master this and not have to worry about the money coming in next month, I had to figure out a few pieces including how to manage cashflow and how to charge appropriately (hint: the same hourly rate you would have as an employee is not appropriate).

  • Vilx-

    Thank you Brennan, for the post that I’ve been waiting for! I’m not a freelancer and I’ve been having doubts for a long time whether I should try it or not. Your post however has confirmed my suspicions, and now I’m starting to be more firmly on the “not” side (although who knows what the future will bring). The reasons are pretty much the same you’ve outlined above – a family that demands financial stability (+ no meaningful savings to speak of); permanently need to be “at work”; and also the requirement to develop skills and do a lot of things I don’t have any interest in (selling, marketing, etc). What I want to get out of freelancing would be to earn more and work less, but it seems that at least for a few initial years it would be the exact opposite. And that’s if I got lucky and wasn’t forced to get back to paid work anyway.

  • Jessica

    Great post! I’m constantly asking myself this question. Although it’s a lot of work, I’m maintaining my full-time position while building up a freelance writing base on the side. It’s been a great way to get my feet wet with freelancing, without the risk of having no money to pay my bills!

    The hardest challenge for me has been finding and locking down enough clients – or at least enough high-paying clients – to even consider having this side hustle replace my full-time gig. Researching, pitching, marketing, networking… there always seems to be more than enough non-paying work for me to do with my business on top of the actual paid writing gigs.

    Looking forward to your book!

  • Jeff Schmitz

    I’ve not yet become a full-time freelancer for these reasons.

    Impostor syndrome: I’m self-trained in computer repair and support. I know my services are valuable, but I also know I’m not as good as a lot of pros out there. I support a couple .orgs on a volunteer basis, so I know I can do it, but the responsibility is different when it’s for pay.

    Lack of clients: I have a couple customers now, but their needs aren’t great. I would have to pour significant energy into lining up clients and I’m uncertain how to do so in an efficient way.

    Security: I have a large family, so I can’t just give up what I have. I’d like to start increasing my freelancing business on the side, but I largely find myself unsure how to proceed.

    Your newsletter articles have been helpful. I just need to find my next steps.

  • May Lee Thompson

    Great articles! Thank you so much! My husband was a full-time freelancer for over 6 years and yes, for stability reasons, he had to go back to a full-time job. He also felt like he was losing his ‘new skills’ as he was by himself most of the time and did not have time to network with other designers. He felt the need to get back into the group of designers to keep his design skills fresh along with needing some stability income to support a family of four. I am a part-time web designer and considering quitting my part-time job to do a part-time freelancing. I am hoping to pick up some work from my current employer and some from my husband’s current clients from his freelance career. I am hoping and praying that it would be the right path for me to choose. Thanks again!

  • Randle Browning

    Great post, Brennan! I’ve been setting myself up to start freelancing in 2016, but one of the biggest things stopping me is just finding clients. It feels like with my industry (content marketing) and what I want to do as a freelancer (content strategy, brand voice, scrum training for content/marketing teams, webinar + video consulting) isn’t the type of thing you find on freelance job boards. I get the impression that I would come across those jobs by word of mouth and referrals, and I’m stumped on how to start that engine. (I work remotely and do not live in a city, so my networking is largely online!) Would love to hear how others here have dealt with issues like this.

    • Content marketing jobs can be found on job boards, but it’s not as tricky as you think to find your own clients—and the money is fantastic! Build a strong writing portfolio and show it off somewhere like Contently. Start your own website with pre-determined content marketing or consulting packages and promote your site and blog through (irony of ironies) content marketing. Plenty of networking can be done online, too. Get active in entrepreneur groups on FB—you’ll see plenty of opportunities come up there. Twitter and (sometimes) Instagram can also be a great place to meet people depending on your target audience. It’s just about building relationships and letting people know what you do along the way. Finally, freelance content marketing jobs show up on LinkedIn all the time. It’s not my favorite way to find work because you’re competing with so many others for a job, but luckily I don’t need to search there very often because I’ve built up a solid base of steady, recurring clients who refer my work to others. It takes time, just like with any other freelance industry, but content marketers definitely aren’t at a disadvantage!

  • Michelle Zareas

    Great article! I completely agree. I have worked for the family business in management for the last eight years, and have been in the hospitality industry for over 25 years. I wear a lot of hats from errand girl to event planning, marketing, PR, graphic designer, and crisis management. I would very much like to make a career change which utilizes all of these skills. I have some ideas. Fantastic ideas! That being said, I know all too well the sacrifices that have to be made in order to work for one’s self. I am actually trying to decide whether or not I want to go work for “the man” for a change, and end my work day at the proverbial 5:00pm and my work week on Fridays. This article is a good confirmation, as well as reminder of the pros and cons of freelancing.

  • All fair points here, Brennan.

    Freelancing certainly isn’t for everyone.

    But for me? I couldn’t imagine working for someone else again. I value my freedom and flexibility far too much.

    One strategy I found that worked well for me (to offset some of the “uncertainty” as you put it) was to really diversify my client portfolio.

    I made a conscious point early on to (mostly) take on clients with monthly recurring invoices — blog writing, social media management, etc.

    And rather than cater to businesses with substantial online presences, I focused on the little guys just getting started. The bloggers. The solopreneurs.

    It offers me some sense of job security. If I lose one big client and I only have two, I’m in trouble. If I lose one small client and I have 27 more, I’ll live.

    Just my thoughts though.

    Great post — I’ll share it out now!

    Brent

  • fabsrobles

    I completely relate to Imposter Syndrome. I currently work as a FedEx driver in my (very) small town, and freelance on the side in my spare time. I wasn’t formally trained in design, but I have had a measure of success practicing it for the last 5 years or so, but I really doubt my ability to make a full time freelance situation work for me because of my lack of education, in combination with other factors. :/ One day, God willing!

  • The Cloudflo Team

    There are so many things that would help to know before starting, but sometimes circumstances just line up and you just have to try it like I did. Then, if you follow Brennan and many other online experts you’ll be able to learn quickly and figure it out as you go along. If you’ve decided to embark upon the journey, we’d love to hear about how you are managing and to fill out our survey on freelance business and financial management. We’ll share the results for free once we get 100 respondents – http://goo.gl/forms/Y45WpO0ydZ

  • Sourav Paul

    Thanks for the post and for the useful tips. As a full time freelancer, I hope to increase my audience following these tips. 🙂

  • It’s definitely worth to be a freelancer but … you need to be well organised 🙂 Great article btw.

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