In a recent post, 10 Steps to Starting a Business While Keeping Your Full-Time Job, my pal Ryan Robinson laid out practical steps to help you plan and launch a new business.
Now let's go a step further and see how you can be a successful freelancer while keeping your full-time job--until you're ready to fully take the entrepreneurial plunge.
Here's another great guest post from Ryan Robinson, an entrepreneur and marketer who teaches people how to create meaningful self-employed careers. (His online courses "Launching a Business While Working" and "Writing a Winning Freelance Proposal" can teach you how to start and grow your own business while working a full-time job.)
With more than 54 million Americans opting to forgo traditional careers, in exchange for the risks and rewards of working remotely as freelancers, we're seeing an unprecedented shift in the way companies function around the world. Hiring freelancers is becoming not only more acceptable but also more attractive for many businesses.
Fewer taxes, lower employee-related expenses, no health care, less office space: These are but a handful of the reasons many companies are seeking freelance writers, designers, marketers, and developers to help grow their businesses.
A recent study by the University of Phoenix, polling 1,600 adults under the age of 30, found that 63 percent of people in their 20s either own their own business or want to in the near future. Of those who are not already entrepreneurs, 55 percent identified as wanting to be, one day.
So, how do those of us--regardless of age--who want to be gainfully self-employed go about getting started with our careers as entrepreneurs?
We all have bills that need to be paid, expenses that don't just magically go away overnight once we decide to chase our dreams. I live in San Francisco, which happens to have the highest average rent costs in the U.S. For me, immediately quitting my day job to pursue my passions was not feasible.
However, if I could bring in enough income and have the flexibility to spend more time working on my online courses, I'd be able to get my passive income business off the ground much quicker than just squeezing in time around my day job.
Because I didn't want to go into debt or seek outside funding to get my freelance business running, I chose to start freelancing on the side during my personal time before and after work and on weekends. That experience (and my previous projects as an entrepreneur) has taught me an incredible amount about how much hard work it takes to launch a freelance business and to continue delivering high-quality results for clients while bringing in new contracts at the same time.
There's no doubt that it will be difficult to keep up with your performance at your day job and still find the time to put in meaningful work on your freelance projects. But when you're running your own freelance business full time and reaping the lifestyle benefits of hustling your way into self-employment, it'll be well worth the extra hours right now.
I strongly recommend that anyone considering starting a freelance business or transitioning into being a consultant begin by freelancing on the side while still working full time.
1. Testing Out Self-Employment Stress-Free.
You need to build a runway of clients and have income already flowing in before you up and quit your job, unless you're willing to blow through potentially a lot of savings or take out a line of credit to prop yourself up while your business isn't generating much income.
I'm all for calculated risks, so this one is simple to me: Before I even consider leaving, I need to bring in as much income as my current job affords me, or close enough to it, that I can justify quitting to focus full time on client acquisition.
By spending 10 to 20 hours a week landing freelance clients and working on their projects, you're going to get a very clear gauge on how much work it takes to run your own business. You'll learn all the different hats that need to be worn and what your strengths and weaknesses are. You'll very quickly learn what it takes to create winning proposals that sell your strengths.
Most important, you'll be perfecting all of your business practices without the stress of needing the income--because you still have your job for that.
I'm very lucky that I love the work I do at CreativeLive. It's not only meaningful, but on a daily basis, I'm making great relationships and building my personal brand while simultaneously driving outstanding results running the marketing for our Money & Life classes. I'm not in a position where I need, or even want, to leave my current job, so I can bring on freelance clients on the side without the stress of being at a job that isn't fulfilling.
2. Increasing Your Income.
One of the nicest benefits of testing your way into freelancing while you're still working full time is the additional income.
Whether it's a few hundred dollars, or several thousand, it's important to keep very careful track of everything you're making through your freelance side business. I recommend using a tool like Batchbook, a CRM system for monitoring your clients and tracking the work you're doing, in addition to keeping tabs on the value of each contract you're working on.
While you're steadily ramping up your freelance income and signing more clients, I recommend saving 100 percent of your earnings from your new business. Before you even get started, be sure to set up a new checking account as your destination for getting paid by freelance clients. This is extremely important for several reasons. You'll be very clearly tracking how much monthly income your freelance business generates, it'll be in a separate account that you're not tempted to draw from, and you're actively building up a safety net for potential lean times ahead.
3. Building Your Skills.
Arguably, the most important reason to start freelancing while you're still working is to get a lot of experience very quickly--and hone your abilities under circumstances that are within your control. You're not under the gun to immediately take on an overwhelming number of clients. Instead, you can focus on delivering very-high-quality work on a small number of projects that'll help you continue to get better at your profession.
As a writer, I know the importance of keeping up with trends and regularly practicing my abilities. Whether I'm writing for my own business or for a client project, I get to go through the exercises I want to continue to get better at, on a daily basis. By freelancing my services, I'm getting paid by others to improve my skills.
While researchers have never agreed on a set number of hours of practice needed to become an expert on any subject, the more time you spend perfecting your skills and developing your own personal style, the better. A recent study at Princeton showed the amount of deliberate practice one gets may not correlate as closely with performance as previously thought. Nevertheless, you'll undoubtedly experience immense benefits from working on your favorite skills.
From Michael Jordan to Bill Gates, they became extraordinary at what they do not because they put an incredible amount of time into practicing but because they cared deeply about improving their abilities and being the best.
Start practicing as quickly as possible and you'll be able to command higher rates as a freelancer down the road.
4. Nailing Down Your Pricing Strategy.
When starting out, most freelancers tend to greatly undervalue their services and set the bar very low. When you're bidding on a freelance project, always start higher than you think you should. Focus on communicating how much value you're going to deliver for the client, and lean heavily on accomplishments and results you've already generated for other clients or at your job.
In addition to undervaluing your services, it's easy to significantly underestimate the costs that go into running your own business. Making $35 an hour at your 9-to-5 job is not the same as charging $35 an hour for your freelance services.
Now that you'll soon be self-employed, it's time to familiarize yourself with all of the new taxes, fees, expenses, and costs of living that'll soon be placed upon your shoulders since your employer will no longer be subsidizing any of those costs. This infographic I created on How to Calculate Your Hourly Rate as a Freelancer is a great starting point.
5. Creating Your Personal Brand.
I'm a firm believer that you're developing a personal brand for yourself in everything you do.
How do you want the world to see you? In starting your freelance career, you'll naturally need to develop an online portfolio to display your works and show off what you can do for potential clients. You'll need to create project proposal templates, sample works, and pricing guides before you go out and start pitching clients. What better time to begin creating these materials than while you still have a steady income from your day job?
6. Developing Valuable Connections.
As Jeff Haden simply puts it, "Don't build networks; make real connections."
Look at your freelancing career as an opportunity to make deeper connections with clients through delivering genuine value to their businesses. You're building relationships that have the potential to last a lifetime. The relationships you can make while freelancing extend far beyond simply having clients.
7. Discovering Your Passions.
If you're spending your limited hours of free time each day getting clients and working on multiple projects concurrently, you'll learn very quickly if you're passionate about writing, designing, or whatever task you may be doing. Ask yourself these three questions to evaluate whether your freelance work is truly meaningful to you.
You'll also learn the types of industries you enjoy working in and the demographics of the customers you'll likely work best with. Knowing what you'll enjoy working on and whom you want to work with is crucial to setting yourself up for success. It can mean the difference between being passionate about a project or viewing it simply as a paycheck. Take a look at your personal hobbies and see if there are any ways to align your freelance work with clients associated somehow with those interests; your hobbies can tell you a lot about your passions.
8. Learning Discipline.
When you're self-employed as a freelancer, you need to have a fierce dedication to delivering great results for your clients regardless of the circumstances going on in your personal life. Procrastination can be the ruin of you.
There are no excuses for coming up short on a project, other than the fact that you failed to deliver. Naturally, if there's something serious going on that halts progress on your work, it's understandable to most clients. However, the responsibility of clearly communicating unforeseen emergencies as quickly as possible (with revised expectations and due dates) rests on your shoulders.
If you can find a way to dedicate a few hours each day to your freelance business while you're still working full time, you'll have no trouble running your own business and keeping up with deadlines in the future. Whether you get up at 5:00 a.m. or stay up late to work on your projects, you're training yourself for how disciplined you'll need to be once you're freelancing full time.