Becoming a freelancer sounds great. You have the freedom to set your own hours, you can work from wherever you like, and and you can dedicate yourself to work that inspires you.
But all that upside comes with downside. You are now your own boss. You alone need to make sure that work is coming in the door, and you alone make certain that you are prepared for your future.
1. Divide your working time
There are basically 5 activities that you will be involved in when you are freelancing:
- Client work
- Finding new clients/gigs (sales)
- Maintaining relationships and networking
- Improving on skills
- Business upkeep (accounting, taxes, paying bills)
Automate as much of this as you can (there are some useful tools here) with the goal that you are billable as much as possible. The rest should be divided up.
That balance is challenging because in the beginning you will not be as well known, and may not have the experience and skills to charge what you would like. That means that you spend more time looking for work and improving your skills than someone who is more experienced and probably charging a higher rate.
The ideal time to look at freelancing is often when you’ve spent significant time working in your field. Art Directors from agencies, developers from big tech companies, and veteran animators can often go out on their own more successfully because they’ve built relationships, reputation and have a portfolio of work that can attract clients. Maintaining a solid ratio of billable hours is easier because they aren’t spending so much time on skills development.
2. Set a good rate
Online marketplaces have done some damage to rates and, while the situation is improving and rates in many countries are rising, achieving income and lifestyle goals can depend a lot on where you live.
The first thing you need to do is establish an annual earnings goal. It doesn’t really matter what it is, but it should be comfortable, allow you to put away savings and pay for expenses.
You can then use that annual rate to determine your hourly rate. One rule of thumb is that your hourly rate should be 1/1000th your target annual earnings. So if you want to make $50K/year, your hourly should be $50/hr. This makes sense, because you have about 2000–2500 working hours per year, but a lot of that time is consumed with sales, networking, skills development, and other non-billable time. This is especially true when you’re starting out.
A lot of freelancing is incredibly competitive. After all, the benefits are alluring. On top of that many large companies have cottoned to the idea that moving some of their workforce from full-time to contract reduces their costs, and that adds a lot of experienced people to the independent workforce.
In this kind of environment being a generalist probably isn’t helpful. You need to stand out, and that means being focused on a discipline. Whether it’s DevOps, Hard Surface Modeling, Fashion Photography, or Travel Writing, the more focused your niche the better chance you have of standing out and getting noticed.
Specialization gives you three advantages:
- You can focus on becoming the best within your niche, building a very targeted skill set.
- You can figure out the exact type of person that would hire you, where those people spend time, and how you can reach them.
- You’re more relevant to the needs of your potential clients. For example, if I’m looking for a Python developer I’m going to avoid hiring someone who’s mostly worked in Ruby with some Python on the side. I want someone who eats and sleeps Python and has the Pycon shirts to prove it.
4. Build a network
Work on creating a network that can help you get and deliver work. Not coincidently, Zig is built exactly for this purpose. You want a network that consists of three types of people:
- Freelancers Like You:
People who, on paper, are your competition can also be great for your wellbeing business-wise and personally. You can throw each other work when you’re too busy, team up on larger jobs, and support each other when things aren’t so great.
- Freelancers Not Like You:
People who compliment your skillset are also great to know. A designer that knows some good developers can get a team together for larger jobs. You can start to build a referral network, so when clients ask for something you can’t deliver you can provide them a good option.
Obviously you want to build a network of clients, and you want to have great relationships with all of them if possible. If you are being targeted in your approach your potential clients will likely know one another. The better they think of you, the more likely they are to recommend you.
5. Measure everything
You’re a business now, so you have to act like a business. Track your expenses, make sure you are loading each quarter so that you have a steady amount of work, understand how seasonality impacts you, the average size of your jobs, the conditions that cause budget overruns, and characteristics of an ideal client.
Building a freelance career is a lot like any other challenge that is worth pursuing. You need to set goals, and then track your progress towards those goals. When things aren’t working out you can look at what you’ve done and determine what you need to change in order to keep moving forward.
6. Plan for the future
Planning for the future is another thing that can help remove the stress of the freelance life and help you enjoy the benefits.
Insurance is really important. Organization like The Freelancers Union offer a whole host of options, from health to liability. Things like critical illness insurance are worth consideration. Make sure you are well covered.
Also you need a solid financial plan so that you can retire or deal with emergencies. It’s never too early to start, and services like Grove and Betterment aim to make it simpler and more affordable to plan for your financial future.
7. Take time for yourself
Nobody on their deathbed has ever said “I wish I had spent more time at the office”. — Paul Tsongas
People with regular jobs can have the advantage of being able to switch off when the work day is over (I say can, because this is often not the case). For freelancers it isn’t so easy.
I think it’s critical to develop a routine. You need to segment out time so that you can get your work done, take care of your business needs, and take time for yourself. Exercise, travel, enjoy your family, make friends with people who know nothing about your business. Carve out time for these things. They’re important.
It seems to me the ultimate goal of freelancing is to get to a place where you are meeting both your financial and personal needs. Following these seven steps can help get you there.
(The article was first published here. Copyright resides with the author.)