Going out on your own. Everyone thinks about it. And more and more, people are doing it. Sometimes out of necessity, sometimes out of choice. With improved online collaboration and communication tools, better and more effective ways to promote yourself, and, politics aside, the ability to get healthcare through the ACA, working on your own has become more acceptable, common and within reach. But it’s still a huge move and if it’s out of choice, then you might want to consider getting your house in order and taking care of the following (by no means exhaustive) list before making the big leap.
1. Get your finances ship shape
The importance of this can’t be overstated. Unless you already have guaranteed customers lined up, getting your own freelance business up and running is hard work and can take longer than you imagined. Make sure you have a financial cushion to get you through at least the first 6 months (more is always better). Consider a dedicated credit card to keep all of your business expenses separate from your personal expenses.
And having health insurance is a must – even if you’re young and invincible. Obviously, if you have a working spouse and are covered through their plan, that’s optimal. But there are other options available today either through the ACA and state exchanges, or through organizations like the Freelancers Union. Lastly, don’t forget about your retirement. Maybe taking off one year of retirement planning while you get up and running is acceptable, but don’t put it off for good because you no longer have the type of paycheck where a 401K contribution automatically gets deducted without you having to think about it.
2. Have a plan
Hopefully this is an obvious need and you realize it covers a fairly extensive list of considerations. What is your offering? Who are your customers? What are their pain points? Do you need to setup an LLC? What is your lead generation or networking strategy? Do you need to make any equipment, office space, or marketing investments? What milestones are you trying to achieve and by when? What is your time frame for being revenue positive? If you don’t succeed (and not everyone does), how long until you throw in the towel.
If you have a spouse or significant other, and your move to independence impacts the well-being of your relationship, marriage and/or family, make sure you get buy-in on your plan from those that are most affected. It’s not enough that you think it’s air tight, your partner, wife, husband, etc. should also be in agreement. Think of them as your Board of Directors. It could save you from a lot of acrimony down the road.
3. Have a network
While you probably have hundreds of connections on LinkedIn, for purposes of starting your own freelance business, your network should include people that you can actually collaborate with. If you’re a content strategist or an SEO expert, make sure you have a stable of trusted collaborators that compliment your skill set and that you can bring into projects that you’re bidding on. It’s even better if these are folks you’ve collaborated with before and you can point to work that you’ve done together. Bringing in a random team member you found on Elance or Freelancer can be a risky move.
4. Develop a portfolio
Face it, when you’re on your own, you’re selling yourself. And your experience. Make sure you’re able to showcase a portfolio of work that demonstrates clear examples of what you plan to do in your business and that you can take credit for. Maybe it’s work that you did moonlighting or for former employers*. And while not everyone’s a designer, it’s still important that your portfolio looks not only professional, but well-organized and aesthetically pleasing.
*Important: if it’s work you did for a former employer, make sure you’re not prohibited from promoting it to your prospects or putting it up online (every company has different rules about that).
5. Have some references
This is similar to having a network, but a bit different. While you’re no doubt awesome at what you do, having references lined up that will attest to that fact is critical. This is something you should plan for before leaving your current job – don’t surprise your network after you make the move. And it’s important that your references go beyond former colleagues – they should include past customers that can vouch for the quality of work you’ve delivered for them and plan to deliver to your new customers.
6. Understand your personal value proposition
Just like a company sets a value proposition for their products and services, you should understand what your personal value proposition (PVP) is. As stated already, when you’re on your own, you’re selling yourself. Why would a potential customer hire you for a job or project over someone else? Your PVP should get to the heart of what you’re really good at, what the customer profile is of companies you can help the most, and what specific value you can bring to your customers. Ask yourself why you would hire you.
7. Understand what you’re worth
This is really hard for people who are new to freelancing. Being billed out at $150 to $200 an hour when you were with former employers is one thing, but billing yourself out is a whole different experience. The first thing you need to understand is how much you need to earn to regain the salary you were making and to keep your lifestyle in check. That should be your starting point. Remember, that rate your employer billed you out at included a lot more overhead than you will have as a freelancer. You also have to remember that you’re never going to be 100% billable and that you will experience ebbs and flows in your business. While it’s important to not price yourself out of the market, it’s also easy to under value what you can charge.
8. Learn how to manage your time
No doubt that one of the reasons you’re attracted to going out on your own is to be your own boss. To take that beach day or go on that field trip with your child when it works for you, not your employer. That is a perfectly valid reason and one that is easier to realize when you know how to manage your time. While time management is important when you’re on a client project deadline, it’s just as critical for all the other things you need to do to get your business going – networking, writing content, lead generation, writing proposals. Somebody probably handled all this stuff at your former employer, but now it’s your job. Set clear, realistic goals and focus on the things that are most effective and important. And if you’re not good at something, figure out how to offload certain tasks.
9. Know what productivity tools are out there
It’s no mystery that technology has made freelancing a lot easier. Skype, Dropbox, Freshbooks, Insightly, WordPress, SquareSpace, MailChimp, etc. – these are all great tools that are free or inexpensive and can help you communicate, collaborate, get organized, and market yourself easily and effectively. Understand what you need to get your own business going – a website, CRM, email marketing – and talk to friends and try free demos so you know beforehand what will work for you.
10. Make sure you have a good workspace
This sounds like a no-brainer but it’s critical for your effectiveness and state of mind. Do you have a separate office in your home so that you can shut the door and not be bothered or do you plan to work off of your kitchen table? If you have small children and a spouse at home, having that separate office might be more important than you realize. Just because you’re at home doesn’t mean you’re not working and those boundaries need to be set immediately.
Many people only realize after they’ve made the leap to independence that in fact, they like working with people and working from home is a lonelier experience than they bargained for. There are a lot of shared workspace options today like WeWork and WorkBar – and of course there’s always Starbucks or your local coffee shop. Know what works for you and don’t fight your instincts.
Have any other tips for would be or newly minted freelancers? Share your thoughts in the comments below:
Image: Death to the Stock Photo