When I first read the statistic from a Freelancers Union study that 1 in 3 US workers are freelancing, my jaw dropped.
If over one-third of the workforce is working for themselves, it not only must be getting more accepted, but easier to do.
I quit my job to go full time freelance in January of 2015.
Well, actually, full disclosure, I quit right after Thanksgiving, ran away to Asia for all of December, and then went right into freelance life.
Was I scared?
Sh*tless.
The idea of giving up a steady job with a great boss, especially after living through 2008, made me feel ungrateful and a little insane. But on the days where I was really honest with myself, I knew that mentally, I was one foot out the door and it was showing in my work.
So I booked the extended trip to Asia to push myself to have a real sit down with my boss. The delusional side of me told myself, “Well, if they can be okay with me being gone for so long, maybe I could stick around a little longer.”
When my boss asked me how I thought I would be able to keep up with my work, the words that actually came out of my mouth ended up being, “I think this is the end.”
And just like that, we started planning for my exit.
Here’s how you can build momentum to make this the year you decide to go full time freelance:
1. START SAVING NOW.
Not just saving, but putting away every dollar you can squeeze out of your oh-so-steady paycheck. Open up a separate savings account. Call it something motivating, like your freedom fund, or your freelance fund, or, maaaaaybe, your freelance to freedom fund (wink wink).
Figure out an amount you can comfortably save from your income and set up an auto transfer to go into this account.
Then, sign up for digit.co, a super cool savings app that links to your bank account and quietly saves small sums of money for you on a regular basis based on your spending habits. I’ve had clients and workshop participants end up saving between $300-$2,000 in just a few months!
Having a savings cushion is the simplest and most critical piece to giving you the financial momentum to make the transition, so save now and save often.
As a general rule of thumb, it’s good to have 3-6 months’ worth of living expenses in a savings account to have a comfortable cushion. It’s okay to have a little less saved if you have side income or projects lined up when you’re ready to quit.
2. START BUILDING A RUNWAY OF SIDE INCOME.
I recommend that before you even begin to think about quitting your job, that you take on some side gigs.
(NOTE: Before you really get in, though, check with your HR department to make sure you’re not crossing any legal lines or violating non-competes/non-disclosures.)
This will give you some clear ideas on:
- What people are willing to pay for and how much they can pay you
- Whether or not you like the work that you would potentially be doing full time
- How to juggle multiple responsibilities and wear multiple hats
- The types of clients/customers you want to interact with (your target market!)
- If this type of work could be a viable income source
Take advantage of the time you have at your job now to really experiment and take risks with your freelance gigs. Offer to do 1-2 projects for free or low cost in exchange for candid feedback and testimonials, try different business models and offerings, and/or use unusual marketing tactics that don’t scale.
This is your time to see what sticks. Pay very close attention to patterns that emerge.
For instance, one thing I noticed with Brunch & Budgets is that people would leave our first session really excited, we’d book the next session 3-6 months out to check in, and I would either get a cancellation or a sheepish admission that they hadn’t gotten very far in our plan.
So I went back to the drawing board and ended up creating a monthly model that provided ongoing support to clients who wanted help and accountability to make sure their plans were implemented.
This is the crux of my business today and it all came out of noticing a need that wasn’t being filled.
3. PUT TOGETHER A 12-MONTH CASH FLOW PROJECTION.
One of my biggest learns as a freelancer is that we have to stop thinking like employees. As an employee, you have a reliable and regular source of income that makes it easy to plan for expenses on a monthly basis.
For most freelancers, this is a luxury we’ve long forgotten.
The best way to start thinking more like a freelancer? Instead of planning for your income for the month, plan for your income for the next year by putting together a 12-month cash flow projection.
You can view a sample cash flow projection spreadsheet here.
Essentially, you’re going to map out your expected income for the next 12 months, which is especially helpful if you get paid in large chunks throughout the year.
Then you’re also going to set goal income for yourself, like landing two clients per month, or selling x number of products each month. This is the part that might feel like a stretch. That’s how it’s supposed to feel. Seeing how theses numbers could potentially pan out is a little scary and also pretty exciting.
Finally, you’re going to figure out what all your potential business expenses would be for the year, which will help you stay on track and keep your cash flow positive.
Going through this exercise a few months before quitting my job gave me the confidence to realize that, hey, this could actually work out by this time next year.
The key to making all of this come true is to update it with actual numbers every month and compare it to what your goals originally were. From there, you can analyze what worked and what didn’t for you in that month.
4. GIVE YOURSELF A DEADLINE AND SET IT UP SO YOU CAN’T CHANGE IT.
Booking that trip to Asia was my subconscious mind giving me a deadline to just quit already.
When you get more excited about working on your side business and have a hard time concentrating at work, it’s time to mark something on the calendar.
This is most likely going to feel like the hardest step. It’s going to feel arbitrary and made up and at the same time, it’s going to be the step that makes everything feel real.
Before you set a deadline, think about the worst thing that can happen if you don’t succeed at being a freelancer.
For most of us, the reality is that we just end up right back into another job, which is exactly what you’re doing right now anyway.
Even if freelancing doesn’t work out, you will be able to show on your resume that you had the courage, persistence, initiative, and confidence to work for yourself, all character traits valuable to any employer.
And this is the worst case scenario!
I know I would have always wondered what could have been if I didn’t give my business an honest to goodness, 100% real shot.
Once you set that deadline, you’re one step closer to giving yourself a real shot too.