Do you hate your job or spend hours at your cubicle daydreaming of the freedom to work for yourself, setting your own hours and rules as a freelancer? I can personally say I’ve been there and know exactly how it feels to hear stories from the likes of Tim Ferriss and Gary Vaynerchuk exclaim how working hard (or maybe not at all) can eliminate the daily ridicule of your CEO and escape that 9-5 grind. After making the transition from employed to freelancing myself, I can attest that, yes, it really is nice to define my own schedule, choose the environment in which I want to work on a daily basis, and rarely set an alarm in the morning. However, becoming a freelancer means some very critical aspects will change when you leave the security of being employed. Is it worth it? That’s up to you to decide, but first, be sure you’re aware of about these seven things to know before becoming a freelancer.
You Will Not Have a Salary
If you’re employed full-time, you likely have a set salary, whether it’s annually or hourly. Likely, you know how much money you’ll take home every paycheck — and that paycheck is usually very regular, typically twice a month. As a freelancer, you will not receive a paycheck regularly. If you do happen to sign a contract with a client with the expectation to receive payment every month, you still cannot expect this payment — clients, especially small businesses, are notorious for paying freelancers late (and some, never at all). Contracts can also be short, and your expected level of income can vary month-to-month. Compared to employees, freelancers do not have a steady income, and as a result, you must be prepared for this fluctuation of income. Monica Guzman, a freelance journalist and community strategist based in Seattle said, “initially I was so scared of this process — negotiating pay rates every couple months or less instead of every year or more? But after a little practice it got easier, or, at least, doable.”
You Will Need to Know Your Worth
On that note, Monica advises knowing this is also critical when making the transition into freelancing full-time, as “the rates you set help define you.” However, she does admit that “this is harder than you’d think.” Be sure to think about what rates you will set and that you will not be taken advantage of when a client asks for a deep discount, especially considering that as a freelancer, you will be paying your own taxes and all of your own benefits. (More on that below.) Monica says when you’re ready to start freelancing, “it’s all about you being ready and willing to assign a dollar value to your skill set, and not — as is so tempting and easy to do — sell yourself short,” especially just to get a paying gig.
You Will Not Have Company-Provided Health Insurance
As just mentioned, once you become a freelancer, you no longer have company-provided benefits. We’ve recently detailed ways that freelancers can acquire health insurance, but the sticker shock of private health insurance that rarely provides even the same level of coverage as plans provided by previous employers can be more than frustrating if you’re not prepared for it. Monica points out that “it’s no secret that American health care is a troubled system, but if you’re self-employed, it’s almost always worse.” She advises that “self-employment health care options — and what they lack — are definitely worth understanding before you take the freelance plunge.”
You Will Not Have An Office
One of the perks of working as a freelancer is the ability to choose when you work and where you want to work. However, you also lose the ability to socialize and develop a network with others in an established atmosphere that can lead to other opportunities — or even just lead to a more enjoyable lunch hour. Monica says that if you do work from home, “it helps to have a network, and to know how and when to tap it. Also, of course, to keep yourself visible, in whatever way makes sense for you.” Using social media, attending networking events and perhaps renting a desk at a local coworking space can help lead to new opportunities and clients. We’ve also discussed that learning how to manage your time and develop a schedule can help you stay productive while working from the casual comforts of your home, which can be very distracting.
You Will Need to Find Your Own Work
As Monica mentioned, networking is critical to finding your own work, as there will be no boss to assign you work throughout the week, month, or year. Those who are lucky find gigs with editors and project managers who can assign them work regularly and for the long-term. You will also need to leverage your own worth to choose the right projects. Learning how to say “no” to a project is critical to maintain a client list with projects you’re not only passionate about, but are literally worth your time. Working on projects that are problematic or take up time you could spend on projects with a higher turnover rate will only waste your time in the long run.
You Will Need to Pay Your Own Taxes
Also mentioned earlier, employers are required to deduct taxes from your paycheck. Freelancers, however, must pay their own taxes from the income earned from projects. Your clients will not withhold taxes for you. For some freelancers, this is a horrible surprise at the beginning of the next year following their first year freelancing. Monica says she’s met consultants “who funnel a quarter of their paychecks or more to tax savings accounts, just to make sure they don’t underestimate what they’ll be paying.” She has hired a CPA to help her, as she’s found that “taking care of your business is, itself, a job.” Whether you decide to manage your finances yourself or hire help, this is one aspect of freelancing to not ignore.
You’ll Need Mentors
Finally, be sure you have help along the way. Working in the comforts of a 9-5 job means you usually have someone to turn to for help when needed. When you start freelancing, you’ll likely need help to answer everything from the most basic questions about your new gigs to the most critical career decisions. For Monica, she says this “was so key for me. I’m running into issues at least twice a month in my work where I’m just not sure what to do or what approach to take, and an email to one or two of my mentors helps tremendously and saves me so much anxiety.” Before transitioning into freelancing, consider finding someone who can guide you along the way and help you make smart decisions to save you from unneeded stress because — trust us — as a freelancer, you will have more than enough of that.
Are you a freelancer? What things do you wish you would have known before freelancing full time? Feel free to share your thoughts in the comments.
CC image of taxes via reallyboring.