Do you ever think about shaking off the doldrums of office life by striking out on your own as a freelancer? It’s an enticing proposition, to be sure. But, the freelance life isn’t all month-long vacations and days spent shooting off emails in your sweats and slippers. Going the self-employed route takes work—especially in the beginning, when you’re building up your network of contacts and ensuring that you have a steady stream of income coming in to reach your financial goals.
So, how can you set yourself up for success from the get-go? We asked those who’d know best: freelancers who’ve had great success working for themselves — like a business pro who now consults for Fortune 500 companies around the world.
Working for yourself can be a tough adjustment if you’re used to getting steady guidance and support from managers and coworkers. Bottom line: At the end of the day, whether you sink or swim as a freelancer is entirely up to you.
“There is no ‘safety net’ when you’re a freelancer — no infrastructure,” says Teri Aulph, a Tulsa-based author and business consultant for Fortune 500 companies. “So you have to be honest about your financial reality: What are your margins? Cost structures? Are you looking at your return on investment? It can be overwhelming, but having a plan is critical.”
So, before venturing out on your own, sit down with a clear understanding of your finances and then draft a business plan (consult the Small Business Association for tips on how to create one). As with any major money project, you’ll want to establish goals and a strategy for meeting them — whether that’s acquiring a dozen new clients by year’s end, becoming profitable in the next six months or doubling your rates.
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Even if you leave a profitable job to freelance, you’ll have a limited amount of capital at your disposal until you start to accrue clients. So what should you spend on first to get your business off the ground? Consider the advice of Aulph: “Talk the part before you look the part.”
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Translation: Your upfront expenses should be allocated toward getting clients, not satisfying a superficial checklist of what you think that an entrepreneur should have. “Business cards, yes,” says Aulph, “nice office furniture, no.” Once you have steady income streams in place to cover your necessary expenses, then you can start browsing Pottery Barn.
Clients don’t always come to you — in the beginning, especially, you have to go to them. And, the more people you know, the better your chances are of coming across potential business opportunities.
You can start with the obvious: social media. “Industry groups on Facebook and LinkedIn are priceless in terms of boosting morale, answering questions and networking,” notes Linsey Knerl, a Nebraska-based freelance writer and social media manager specializing in small business and financial service start-ups. “Plus, freelancers who are social-media-savvy tend to share opportunities freely — without fear of competition.”
And it’s not just social media platforms that can help get your name out there: The Small Business Association provides local resources for small business owners, and you can also look into in-person industry events and gatherings through sites like Meetup.com and even Craigslist.
The saying “time is money” has never been so true as it is for a freelancer. “Once you become your own boss, it can be hard to make yourself sit down and get all the work done on time when you can easily say, ‘I don’t really feel like working today,’ ” admits Owen Hunt, a contract multimedia artist in Orange County, Calif.
This newfound flexibility means that you have to make your time on the clock worth your while, especially when you’re juggling multiple clients. “Good freelancers must always be on their toes, so they don’t underbid themselves on jobs,” says Hunt. “Because you’re working with different clients, every new project is a new beginning, almost like your first day at work.”
As part of your business plan, you should have an idea of what you’ll charge, based on the going rate for your services (the Small Business Association has helpful guidelines). And then it’s time to ask yourself a hard question: Is a project worth your time? As Tom Finnegan, a freelance copyeditor in San Francisco, confesses, “One of the biggest challenges I’ve faced as a freelancer is saying thanks-but-no-thanks to offers of work that won’t pay well!”
When you don’t have an IT department, accounting team, or an administrative assistant, all of the above falls to you. Rather than waste time struggling with projects outside of your expertise — like tackling your complicated tax return or trying to build your own website — consider creating your own team of helpers.
“I handle my own finances, but I have a CPA who takes care of my taxes and a financial planner who takes care of retirement,” says Dr. Drumm McNaughton, a mastery-level management consultant based out of Fallbrook, Calif. “There is only so much time in the day, and I ‘outsource’ those things that are ‘cost centers.’”
So do a few calculations: Is all that time spent on frustrating non-revenue-producing tasks costing you more than it would to outsource? If so, you may want to look into hiring someone to take them over — perhaps another freelancer!
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Not every client is going to be a perfect match right away, but that doesn’t mean that you shouldn’t follow up with them down the road. “With every potential client,” notes Aulph, “you can plant a seed for what you can offer in the future. When they are ready for that next step, they will come to you.”
And, remember: Your name is your business, so don’t let it fade away. Nervous about sending a note to a long-ago client? One way to get back in touch is to create a system for checking in, whether that means sending holiday greetings or putting together a biannual newsletter update.
“On my freelance editing website, I have two features that I regularly update,” says Finnegan. “Every new posting is announced in an email to the editors in my address book using humor — and virtually every time that such a message goes out, a job comes in.”
“Once you’ve established yourself, even modestly, with a portfolio of good work and a network of contacts for potential referrals,” adds Finnegan, “freelancing should deliver on its promise of steady word-of-mouth—and more work than you expect.”
Sure, we'd all like to be earning more. But, even if that bonus check is nothing but a dream, LearnVest is here to help you make the most of what you've got — read their stories, use their tools, and talk to a pro planner about getting a financial plan custom-designed for you.