How To Become A Full-Time Freelancer Part 1

How To Become A Full-Time Freelancer Part 1Now that I have finally switched to full-time freelancing, I have received many e-mails from others asking how they too can freelance full-time.

This is a loaded question to answer, as there is no right answer for the steps that a person should take before they make the freelancing switch.

I have only been freelancing full-time for a couple of weeks, but I have been building it up for a couple of years and have been working on it for over 40 hours a week for quite some time. I feel very prepared for my freelancing future.

When deciding whether to freelance full-time, there are many things to think about.

Start your freelancing as a side job if you can.

This is what I did. I started my freelancing services on the side, which helped me grow my business but not have to rely on my income in order to survive. It definitely took off the pressure.

However, not everyone can start it as a side job. There may be circumstances where you have to leave your job immediately or you are let go from your job. However, if you can, definitely try to build your freelancing on the side to see if you even like what you are doing (and to see if it is profitable).

See if you can realistically afford it.

If you are thinking about freelancing, figure out if you can truly afford to make the switch. Being your own boss is great, but there are many expenses that may pop up.

Start by creating a realistic budget and realistically totaling your income after taxes each month. Is that enough to survive, save for retirement and live the life that you want to live?

Don’t forget about taxes.

When adding up your budget and expenses, do not forget about taxes. It may be easy to forget about taxes because you only have to pay them quarterly/yearly, but you should be accounting for it once you receive money.

Could you survive if you had a bad month? 

As a freelancer, there are most likely going to be bad months. I don’t know of many freelancers who can say that every single month of freelancing is perfect.

If you had a bad month where your expenses far exceed your income, would you be able to survive?

Have an emergency fund.

That leads to my next point, make sure that you have an emergency plan. This may not be possible for everyone (depending on the reasons for why you are leaving your job), but you should still attempt to build your emergency fund if you can.

We made sure to have a well-funded emergency plan. It helps protect us in case we have a bad month so that we can focus on work and not on how we would scrounge up the next dollar.

Have a business plan.

You might think “Oh, I can just make a business plan later.” However, having a business plan now is important. Maybe your freelancing services are going well now, but are they sustainable into the future? What are your plans for the future? Where do you see your business taking you?

Have experience.

Having meaningful experience is important if you plan on switching to full-time freelancing. It is easier to get work if you have good experience and contacts.

Know how to network.

As a freelancer, networking is very important. Networking can help you land contracts.  Networking can help you find out about future jobs, projects, ideas and so on.

Maybe someone who you have networked with will need your services later on, and they hopefully will think about you and your services. Most people would rather use someone who they know or someone who they know of instead of a stranger, and this is where you come in.

Is your plan to freelance full-time or to be your own boss? What tips do you have?

 

My Second Week Being Self-Employed

My Second Week Being Self-Employed

I see these guys a lot now…

Hey everyone. Yesterday, I announced on Making Sense of Cents that I finally left my job. I didn’t just leave my job yesterday, my last day was a little over 10 days ago.

It’s a little hard to judge my progress so far, since last week was FinCon and I did not get much done. However, I’m going to do an update anyways!

Many people have told me that they are preparing for the switch as well, and that they are wondering if I could do periodic updates on how the switch to full-time self-employment is doing.

Yes, I do realize that it has only been a little over one week, but I do think that you do learn a lot about yourself in that first month of self-employment.

I’m spending more money because… Well, I don’t know why!

Last night, we sat down and went through our recent transactions. We realized that we are spending much more than we usually do. This is due to a mixture of reasons, such as spending more money on fixing up the house (touching up paint and replacing things that we think we don’t like), and also spending more money on food.

We decided last night that we will be on a spending freeze. We will of course still take our upcoming trips, and also hang out with friends and family. We just won’t be going up to Target and Lowes every single day to buy random things.

I’m surprisingly not eating more.

One thing that I was afraid of when working at home would be that I would be eating everything and procrastinating doing work by eating. Well, that hasn’t been a problem at all surprisingly!

I’m sleeping, A LOT.

I’m going to blame this on the past several years where I was only receiving around 4 to 5 hours of sleep each night. My body is forcing me to make up for all of those years. I have been setting an alarm for most mornings so that I can get work done earlier in the day.

I have not worked out at all.

One thing that I thought I would be doing a lot more of is working out. Nope, haven’t done that at all. What is “working out?” 😛

However, the house has been really clean.

I must be procrastinating working out by cleaning. The house has never been cleaner!

I am working more than ever.

I have started a few new contracts this month so far. However, even though I am working more, I do not think that October’s income will beat the $12K that I made in September. I do think that starting in November that I will see my monthly income increase again though.

I am in my pajamas a lot.

This is sad to admit, but I am truly in my pajamas a lot. Luckily, my pajamas aren’t too disgusting (I’m a weirdo and I like to wear nice sweaters with yoga pants as my pajamas). However, sometimes I do wear some really old pajamas that I’ve probably had for too long. If I go out, then yes I will change, but right when I get home I change back to pajamas almost immediately.

I figure if I am at home alone, or if it’s just W here, then why get dressed? W probably thinks I am crazy but oh well. Am I weird? Or do most self-employed people get dressed in the morning?

I am loving what I am doing.

I am really loving what I am doing. The passion has not decreased at all, which isn’t surprisingly since it has only been one week. However, I always see myself loving this, so I don’t see that changing at all.

What else do you want to know about my first week being self-employed? Anything up there surprise you?

How did your first week being self-employed go?

 

Business Mistakes That Owners Make

As a relatively new business owner, I sometimes worry if I am doing something right or wrong. No, I’m not losing sleep over it, but sometimes I question if I could be doing something just a little better.

And, since I used to work with business law, I saw a good amount of mistakes that businesses made. Some were probably just honest mistakes, but others made me cringe.

 

Below are some mistakes that business owners make:

Throwing away receipts.

Receipts are important, and you should keep them. If the receipt is for a business expense, then you should definitely keep them. At the end of the year, you shouldn’t just be guessing what your business expenses were. You should have hard proof.

If you get audited, the IRS will want hard-proof as well. They won’t want just estimations of everything.

Keeping business and personal accounts intertwined.

If you are a business owner, or if you have a side job, do you keep your sales and expenses separate? Using your personal bank account for everything can get difficult, and it’s almost always best to just keep your business accounts completely separate from personal accounts. This also makes it a little easier for when tax time comes around as well.

Not hiring an accountant.

I’m going to guess that most business owners don’t have a background in accounting, so why is it that most business owners do most of their own accounting and taxes?

Never hiring help.

When I worked in retail management, there was a fairly large business next door which never hired a single person. He worked open to close and did everything on his own because he could not trust anyone.

This then led to his downfall because there was only so much that he could do with a high-quality level of service. His store completely closed down soon after he opened and he went out of business. And, this was after he sunk hundreds of thousands of dollars into his business.

Starting a business without a plan.

Having a business plan may be the last on your mind, but it should really be the first.  Do you know who your competition is? How long will it take you to make a live-able income? What type of funding will you need? Will you need to rent a space or can you work from home? Will you need employees right away? What will you be selling? How will you sell it?

Will your business allow you to eventually retire? I’ve been reading up on retirement on Suncorp’s website and this is something very important to think about when starting a business.

What other business mistakes have you seen? Have any horror stories to share?