Can You Make It as a Freelancer?

Do you have what it takes to be a freelancer? A look at what is needed to build a successful freelance business.

Jeanne Grunert

Virtuali

· ~8 min read · November 15, 2022 (Updated: October 20, 2023) · Free: Yes

Welcome to Lesson 3 in my series of lessons learned over the 15 years I've run my niche content market agency and freelances for a living. Today's post will be short, but it's an important one, especially if you've been struggling to get your marketing agency or freelance business up and running. Ready? Let's get started.

The Harsh Truth: Not Everyone Is Cut Out for Freelancing

Perhaps you're stuck in a beige cubicle farm like I was back in Manhattan in 2007, wondering if there's anything more to life than fighting traffic on your morning commute, sucking down bad coffee, and keeping your eyes open during endless meetings. Perhaps you're tired of your voice never being heard, your ideas never being used. You're dreaming of becoming a freelancer — working from home, never answering to anyone again, your time your own.

I get it. I really get it.

But unfortunately, if you're leaving your full-timefull time job for these reasons, you may not be happy after all.

Not everyone is cut out for the freelancing life. Being an independent contractor, a freelancer, or an entrepreneur requires a level of discipline and commitment that few people possess. In fact, most people would be better off working a job, and here's why.

(For the sake of this article, I'll use the term "freelancing" and "freelancer" to reflect any independent work: independent contractor, entrepreneurship, gig work. It will be used as a catch-all term for any work done on your own, i.e., without working for an external corporation.)

Are You Ready for Freelance Work?

There's more to becoming a freelancer than a craving for freedom. Freelancing is uncertain work. There is constant change and churn. In many cases, your income won't be the same week to week.Even your income won't be the same week to week, in many cases.

Uncertain Income

Money is an area where many people are not ready for the realities of freelancing.

Freelancing is uncertain work. You have no guaranteed income. If you're used to taking home a specific amount in your paycheck each week, it will be a shock to the system to see your paycheck bounce from week to week — or even month to month.

What are your financial obligations? Do you have loans, such as student loans, credit card debt, or a mortgage? You'll have to plan for the uncertain income from the freelance life for how you will meet such obligations. Many popular financial planners recommend a cushion of savings for 6 to- 12 months of expenses to cover uncertainties. As someone who has lived through those uncertainties for the past 15 years, I recommend saving a year or more of money saved up to keep you safe during lean times.

Are you a saver or a spender? "Savers" should have no problem managing their finances, even with the uncertainties of a freelance income. They can say to themselves, "I can live on $2,000 a month; anything else goes into my savings account against lean times," and do just fine. Spenders, on the other hand, see the extra cash after the $2,000 as a chance to buy what they like. They have trouble saying no to themselves — no, I won't eat out tonight, no, I won't buy a new outfit, etc. While savers and spenders can both do well as freelancers, spenders need to adjust to the mindset of meeting their monthly financial obligations and then pretending at least some of the cash overflow doesn't exist. If they can't adjust to that, they will experience a great deal of stress from their financial situation.

Managing Money as a Freelancer

In addition to building a nest egg or creating a cushion of savings, another way to offset the uncertainties of freelance finances is to find and maintain at least one consistent freelance gig monthly. Some refer to this as the "shopping mall" pattern of freelance work.

If you think about a shopping mall, malls have 'anchor stores' at either end, such as a major department or chain store. In between the big anchor stores are smaller stores. Some are major chains, some are independent stores. And in the middle of the mall are the food stands and small pop- ups.

As a freelancer, if you can manage to find one large regularly recurring client, you have found your 'anchor store.' The anchor store or anchor client then provides your income base, which you can supplement with larger, although irregular, client work (the independent stores in the mall) and the occasional work, ad hoc jobs, or other income (the pop- up stores).

It takes time to land anchor clients, but it does help make your income more regular and lessens the stress of paying bills.

Understand the Mechanics of Running a Business

Freelancing is a business. You cannot treat your freelance work like a hobby. Even if you are setting up your business as a sole proprietorship, you must:

Treat work time as work time. This means setting aside time during your day for client calls, completing work deadlines, prospecting for new work, managing and maintaining your accounts and records, etc.
Behave professionally. The work world has grown increasingly casual, but that does not mean that your clients are your friends. Over time, you may find yourself becoming friendlier with your clients, but at the end of the day, they are paying you for your good work, and you must produce it, time and time again, to be successful.
Complete and submit any required business paperwork, tax paperwork, and other requirements from your city, country, or national government. This will vary according to where you live and the local laws, but it's up to you to understand and adhere to them.
Maintain your own equipment, and ensure you have what you need in order to fulfill your work requirements. (Trust me, you will miss your corporate IT department when your computer crashes!)

Give thought to how you plan to legally set up your freelancing business. Many people jump into freelancing or find themselves freelancing after a major life change, such as a job loss. Don't wait to establish your LLC, S-corporation, or however you plan to establish your business. Each legal entity has its own pros and cons, so consult with a business attorney to understand the ramifications of each for your personal situation.

Work Uncertainties

You must constantly prospect or find new freelance work. You should be looking for your next freelance gig even before your current project completes. This is a common flaw among freelancers — they're so immersed in their current project that they neglect their business pipeline. What happens next is that they end a gig and suddenly find themselves without income for several weeks. Or, they end up taking any job to fill the financial gap, and end up feeling dissatisfied.

Using the 'shopping mall' freelancing business concept does help mitigate the gaps between projects since your anchor clients likely have repeat business, and a large group of smaller clients typically fills in the gaps. It's rare today that I have a long gap between projects, but when I do, I turn to my own work — my blogs, my books — to create salable materials to boost my passive income. This way, I have at least some income, even during lean times.

Providing Your Own Benefits

Because you are now self-employed, you will have to find and pay for your own benefits. This is something else many people are unprepared for — the sticker shock of paying for their own healthcare.

Although the Affordable Care Act has enabled Americans to find and pay for health insurance, there are still gaps, and healthcare can be expensive. Additionally, you won't have the added benefits — dental, vision, 401K — that many companies offer. You'll have to find and plan your own benefits package, determining what you and your family need.

Loneliness

Here's one last area that many people fail to consider: loneliness.

Even if you hate your job, there's a certain comfort in seeing familiar faces every day. You're surrounded by people all day long.

Once you start freelancing, chances are good you'll be working independently, which and that can mean alone. Some freelancers do go to a shared office space, or work from home where family members surround them, but others find themselves suddenly thrust into isolation. It's, and it's an unexpected and shattering experience for many.

Are you an introvert or an extrovert? If you're an introvert, you'll be able to deal with this transition more easily than an extrovert. If you're an extrovert, finding a shared office space or even working out of a coffee shop or your local public library can ease the loneliness of freelancing.

You're Your Own Support System

Lastly, freelancers are also unprepared for losingthe loss of their office support. Your computer goes down? No IT person to call — you have to do it yourself. Questions about how to handle a project? It's up to you.

Over time as a niche marketing agency owner, I have developed my own support group. It consists of many people with whom I have worked remotely and virtually over the years as well as some of my former colleagues. I often pick up the phone, for example, and call my friend Allen when I have a marketing question. Allen and I worked together as marketing directors, and he currently teaches communications at a local university. He's often a good sounding board for marketing questions that I have. Do not neglect your contacts from your full- time job, and continue to cultivate friendships and business connections over time so that you build your own support group.

As for IT support, I've become surprisingly good at troubleshooting networks, Mac and Windows devices. When I'm really stuck, I've found a company that works by the hour and can connect remotely to my devices to fix things.

You'll surprise yourself with creative problem- solving once you become a freelancer.

Look Before You Leap

I'm a planner, and I planned for several years before making the leap to self- employment. Others may find that their spouse or partner is willing to provide the stable income and benefits needed to keep the family afloat while they have the freedom to become freelancers. No matter what you choose to do, look before you leap. Understand the financial and lifestyle ramifications of leaping into freelancing and plan accordingly. Otherwise, you will end up disillusioned and forced to return to the 9 to 5 simply for economic reasons.