5 steps to transition into freelancing (without taking an income hit)
This is a post from a member of the Freelancers Union community. If you’re interested in sharing your expertise, your story, or some advice you think will help a fellow freelancer out, feel free to send your blog post to us here.
If you dream of going freelance, but the thought of losing the security of a full-time job scares you—there’s a way to transition gradually with less financial risk.
Here are five steps to making the transition seamlessly:
1. Start freelancing while you still have a job
Don’t just quit your day job and go freelance cold turkey. Start doing some freelance work while you’re still gainfully employed. (Just be sure it doesn’t interfere with your full-time job.) You’ll be building a client list for the future while honing your freelance skills. Be sure to keep doing great work at your day job…you might need your colleagues in the future (see tip#3).
2. Start saving now
Now that you have additional income, put that away for the future. And look for ways to cut back on expenditures now so you can tuck even more money away: bring your own coffee or lunch to work, for example. Build a solid financial cushion to fall back on during lean times.
3. Network now
Reach out to colleagues and clients (connect to them on LinkedIn, for example) while you’re still employed -- build an extensive list of contacts. People who know and trust you may be able to recommend you for freelance work, or even offer you a gig themselves. And if the freelance business doesn’t work out, you have all those contacts if you need to find another job. Build a good reputation and keep in touch -- be sure to write positive recommendations and ask for recommendations in return. Refer people for work or freelance gigs if you can -- they’ll remember you helped them.
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4. Do the math
Figure out how much income you’ll really need to live on once you go freelance. For example, if you’re married, you may be eligible for coverage on your spouse’s health insurance policy. But if you’re single, you may need to start paying a lot more for insurance on your own.
Self-employment tax may make your annual tax bill higher. On the other hand, you may be able to claim more tax deductions related to your business expenses, and costs related to your current job may be substantially reduced. I had a long, expensive commute to Manhattan, plus I bought breakfast and lunch each day in the city. Gas, tolls, parking, more frequent car maintenance, designer coffee, expensive sandwiches…all those expenses went away when I started to work at home.
5. Leave the nest
Once you have a comfortable amount stashed away, a steady freelance income, and you have determined you can survive for a couple of years on your freelance income plus savings—it’s time to let go of your day job. With more free time to devote to your freelance business, you can concentrate on building your income back up to a level that’s sustainable before your savings run out. Congratulations…you’re on your way!
Michele Paccione is a freelance Creative Director, copywriter and illustrator. She made a successful transition from working in ad agencies full time to freelancing onsite occasionally and doing illustrations at home in her dining room and out by the pool. Her illustrations are available to license at a number of microstock sites, including Shutterstock, and direct at <http://vector999.com vector999.com>.