Today, approximately 34 percent of the workforce in the United States is made up of freelancers, and the expectation is that this number will increase to 40% by 2020. Clearly the American entrepreneurial spirit is alive and kicking, and you may be wondering how you can get in on it and carve out a place for yourself in the freelance world.
Challenges of Freelancing
One of the biggest challenges that many freelancers face is establishing themselves in their chosen field. It’s difficult to get work without a portfolio and some client testimonials—and you can’t get the portfolio and testimonials without first getting some work. It’s a Catch-22, and that makes the idea of quitting your day job cold turkey an intimidating one for some.
The other issue that haunts freelancers is the difficulty of predicting their income. People who earn their living from freelancing often find that their income fluctuates dramatically from week to week and even from month to month. That can make it very hard to feel confident that you’ll be able to meet your living expenses without eating up your savings.
Because financial concerns can loom so large for freelancers, many who are just starting out make the mistake of undercharging for their services. They think if they have the low bid on a job and land it, that they’re doing themselves a favor by building up a portfolio. However, there is definitely a downside to short-selling yourself and it can end up having a ripple effect that stays with you for years.
How to Make the Transition
Now let’s talk about how to make the transition from full-time employee to full-time freelancer. The biggest benefit of beginning the transition while you still have a full-time job is that you can do it right. You can plan carefully, set small achievable goals, and be sure that by the time you’re ready to make the leap, you have everything sorted out and ready to go.
These are the steps to take.
- Research the fees being charged by freelancers in your field. Depending on what you are planning to do, you may be charging an hourly rate, a per-page rate, or charging a flat rate for a particular project. No matter what you are doing, it’s important to take your time, materials, and expertise into consideration. You might not have a ton of experience freelancing, but that doesn’t mean it’s a good idea to ignore the market rates. Believe it or not, people will be more likely to hire you—and to turn into repeat customers—if you don’t undervalue yourself. If you low ball a bid and land the job, the client is going to expect the same low price next time. Charge what you’re worth.
- Find some potential resources for jobs and see what’s available. There are a lot of different resources out there for freelancers. For example, you might decide to seek out jobs on dedicated freelancing websites such as Outsource or Fiverr. Alternatively, you might peruse the job listings on Craigslist or even decide that you want to set up your own website and advertise on social media. Depending on the type of work you are doing, some options will make more sense than others. Take the time to find them.
- Determine one small, achievable goal to measure your progress. For example, you might decide that you want to pay off one credit card or save for a new car. Whatever it is, set your mind to achieving it and figure out what you need to do to get there. The benefit of doing it this way is that you give yourself the chance to go after jobs and get them without the pressure of feeling that your freelance income has to be enough to support you right from the start. As you complete jobs and impress your clients, you can move on to larger goals.
- Speaking of clients, the best thing you can do for yourself at this stage is find ways to personalize your customer service and build client loyalty. One way to stabilize your income is to turn one-time clients into repeat clients, and you can do that by delivering quality work and stellar customer service. When clients feel that you have really taken the time to listen to them and deliver a finished product that meets their needs, they will be eager to order from you again.
- If you have a valued repeat customer, consider trying to sell them on a retainer. The beauty of retainers is that they guarantee your income month to month. They can smooth out your finances by helping you predict what you’ll make. Not every client will be interested in a retainer, but if you’re in the habit of writing multiple blog posts and articles for a client every month, you might be able to interest them in something steady.
- Don’t neglect your tax obligations. As a self-employed freelancer, you’ll have to make estimated quarterly tax payments for your freelancing work. It’s a good idea to figure out how you’ll pay your taxes from the get-go so that you’ll be prepared when the time comes to quit your job.
As you earn more money freelancing, you might want to make a transition to saving your regular income and paying your living expenses from your freelancing income. Doing this can help you make the mental transition to freelancing and also set some money aside to help you if you have a lean month or two.
As more workers begin to turn to freelance work, the competition is likely to increase. Why not get in on the ground floor now and start making the transition? Before long, you could be working for yourself doing something you love.