The autonomy and flexibility of freelancing, following your passion, and being your own boss can be a great way to earn a living. But it’s not for everyone. If you are thinking of going freelance, here are 6 questions to honestly ask yourself before you ditch the 9 to 5.
1. How much can I potentially earn?
How much you can earn will depend on several factors, and it’s not just down to how much you charge but also how you charge. There’s no reason why you can’t earn more than your current salary. For many freelancers, this may be a key factor in running their own business, as there’s no limit to the amount of money you could potentially make.
However, there are other factors at play. For example, the market – your pricing strategy will depend on how much the market will bear, your location, niche and demand, among other things.
Another often overlooked factor is your capacity. How much capacity will you realistically have? This really comes to the fore with a service-based business. How many clients can you realistically take on? It sounds counter-intuitive, but you could scale too soon, and your rapid growth might mean you can’t adequately service your clientele.
You may also have other commitments, such as child care, work-life balance, and scheduled time out to consider. You need to factor in what you can realistically consistently deliver.
And this is before you do the math and work out your prices, taking into account all your outgoings, expenses, and billable hours.
Which leads to the next question.
2. How will I deal with variable income?
The sometimes roller-coaster variable income that freelancers experience can be daunting for some, and during a slow period, it can put pressure on even the most calm, collected, and confident freelancer.
Naturally, there are boom periods, too, and some freelancers consistently make a good profit. There are ways to combat the effects of variable income, such as paying yourself a set amount each month (assuming you have income coming in), having other passive income streams, or having a buffer fund.
To weather the storm of any potential freelancer feast or famine cycle, you could consider setting up a rainy day fund when you are still employed full-time.
This is where a solid freelancer mindset and confidence that you can effectively deal with potential downtime (e.g., working on your business instead of just in it) come into play.
3. Do I have a support network?
Freelancing can be lonely, especially if you work remotely from home, so it’s crucial to have the right support around you when you start out.
In addition to the support of family and friends, you might also want to build up a network of business buddies—people who understand the ups and downs of freelancing.
These relationships are often built up over time, but it’s worth considering putting the feelers out before you go freelance. Contact successful freelancers who have been freelancing for a few years and ask them for advice.
Most freelancers will be happy to help and share a few tips of the trade, so it’s worth reaching out.
4. Do I really want to work for myself?
Do you really want to go freelance, or do you just dislike your current role and are looking for a way out?
If you are unhappy in your current job, jacking it in and being your own boss can seem very tempting. But you need to be honest with yourself. Is freelancing the right route for you, or would you be happy to work in another salaried position in a job you actually liked?
What’s your real reason? Have you thoroughly researched your freelance business idea and considered how you would perform as your own boss, given the challenges and opportunities it presents?
5. Do I have the necessary business skills?
Not everyone has a head for business, and while you may be good at what you do, this does not always translate into a profit if you don’t know anything about actually running a business.
It might be that you can learn business skills while still in your 9 to 5 by enrolling in a course or even learning ‘on the job’. You could be fortunate enough to team up with someone with the requisite business skills, but generally speaking, the nuts and bolts of running the business are likely down to you.
It’s not just sales and marketing you’ll need to consider, but also the financial side of things. Naturally, you can hire professionals; most self-employed people at least hire an accountant.
6. Do I have the right tools?
In addition to business skills, equipment and tools of the trade – will you have the right business tools, systems and processes in place to run your business?
For example, how will you invoice and get paid? Fortunately, Invoice Ninja is a leading free invoicing software for small business invoicing, online payments, tracking expenses and billable tasks. It also includes attractive, professional invoice template designs you can customize with your logo and brand colors. Perfect for freelancers and small businesses.
Plus, it’s free.
Try it out here.
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There are many other factors to consider, but we hope these gave you some food for thought. Read our blog for other tips and ideas for freelancers and small businesses.
