By Karen Geier at Workopolis
This article originally appeared in the Workopolis Career Resources Blog
Everyone has days at work where they imagine how different their life would be if they worked for themselves. There is a rightful allure to Freelancing: there is a certain freedom to how and when you complete projects, you can work around your other life commitments, and you don’t have to request vacation days. Yet, there are realities to the Freelance lifestyle that temper these advantages. If you’re considering Freelancing, it is important to ask yourself whether you’re truly ready to adopt a Freelance lifestyle.
Here are a few things to consider before heading out on your own:
Can You Afford To Quit?
Look back at the last 12 months of your spending and figure out what is the bare minimum for you to make every month to be able to continue your lifestyle, or a simplified version of it. This is important so you can plan out your time and make sure you can cover your expenses. If you can’t right away, you might consider ways you can work your Freelance around your current role until the opportunities for you are better.
Can You Afford An Interruption In Your Income?
It’s important to be realistic about one of the key aspects of Freelancing: you don’t get paid regularly, every two weeks. Some companies employing contractors or freelancers pay at or even after 60 days from receiving invoices. This means you need a runway of at least 2 months’ expenses in order to not have an interruption. It’s not impossible. You just need to plan ahead. Remember that this adds up, too. If you’re only getting paid every 30-60 days and in varying amounts, you’ll need a contingency fund, or a lenient banker.
Do You Have Clients to Start With?
This might seem like a strange consideration, but it’s important to make the distinction between people who have “expressed interest” in hiring you freelance, and people who have signed contracts with you. Make sure you have firm commitments, or offers in your hand before you hand in your notice. You need to make sure you have enough clients committed from day one to ensure you can make a go of it.
Are You Prepared For an Unstructured Work Schedule and Environment?
Being a Freelancer means that you don’t have to clock in at 9 and out at 5. It also means that sometimes, you will be working from 7-7 in order to get a project to bed, or have a 4 hour window in the middle of your day on the other side of town. Freelancing often means having to work around clients, and in this day and age, those clients are in different timezones, are Freelancers themselves, or have flexible hours, and children who keep them up all night. If you’re not a person who is comfortable working around the demands of others, you might need to rethink Freelancing.
Are You Ready to be the Secretary, the Accountant, and the Salesperson?
A good rule of thumb is to take whatever you are thinking of charging hourly and divide that number in 3 to see what your actual “take home” from jobs is. This is because at in-house roles, someone manages your schedule, workload, pay periods, and brings business in the door. As a Freelancer, these jobs fall to you. When you’re quoting your rate, don’t undercut yourself. Try to find comparable jobs online to inform you on what hourly rates would be. Resist the urge to be “cheaper than the competition.” You might find out the effort isn’t worth the low rate you quoted.
Being a Freelancer can be very rewarding, and potentially very lucrative. It’s important to plan properly, and make sure you can live comfortably to spur you on to gaining more business.