Is It Time To Become A Freelance Employee?
Either you've gotten laid off, are concerned that you may be, or just tired of the rat race and want to do your own thing.
Define your services - exactly what are your skills and career specialties. Think how you can package your knowledge, talents and experience on a freelance basis. Be proactive and define exactly what you can do. Can you manage projects, develop creative or even build a website.
Set your rates - Do your research on the going market rates for similar services by checking out listings for freelancing and consulting assignments. Join a networking group for independent professionals (like Freelancers' Union www.freelancersunion.org or Mediabistro www.mediabistro.com for example). Ask other members about appropriate fee ranges. As a new consultant, you may undercharge yourself in the beginning, but once you've got some experience and a better understanding of your fair market value, you can always adjust your rates accordingly.
Find assignments - There are projects out there, you just need to look in the right places. One good place is sites such as www.elance.com and www.guru.com which list many available projects and most are across the country. Another option is searching "freelance" or "contract" positions. Job boards like Monster.com and Hotjobs.com can also be good sources. Search for "freelance" or "contract" positions. In addition, there are sometimes freelance job listings on www.craigslist.org, many of these listings are placed by staffing agencies. If you see agencies that have posted attractive opportunities, consider contacting the agency directly.
One such agency, Hired Guns, a NYC-based agency specializes in contract and freelance work. Here are their tips for becoming a "hired gun":
- Make a commitment. You are not a temp -- you are a free agent. Start thinking of yourself as a company, even if you are just one person. Get serious or go get a full time job. Freelancing is not for the faint of heart.
- Get a lawyer, an accountant, and, yes, an insurance agent.These may seem like overpriced luxuries right now, but running a business is complicated. You need expert advice right at the start for things like deciding corporate structure (corp., S-corp., LLC, etc.) and writing contracts. (Caution: DO NOT WRITE YOUR OWN CONTRACTS. You will live to regret it.)
- Write a business plan.Even if you're a one-man or one-woman show, this is important. Be sure to include forecasts, cash flow, and profit-and-loss projections. Keep your short-term business goals close at hand and refer to them often. Don't be afraid to revise as you learn more about your business, clients, and industry.
- Market before you need to.As part of your business plan, draft a marketing plan. Decide what you are selling and keep your messaging simple. Before you do anything else, have business cards made for yourself (and "don't leave home without them"). Then create a contact database of everyone you've ever worked with. Include former co-workers, vendors, friends, and anyone that might refer business to you. Add to that a list of dream accounts and start thinking about how you can market your services to them.
- Build a website.Keep it simple, have a clear message, and for goodness sake, make sure your contact information is easy to find. (It's cheaper than hiring an administrative assistant.)
- Get your financials in order.Don't run your company's business out of your checkbook. Instead, get QuickBooks accounting software: it's easy to learn, and most accountants are comfortable reviewing books created in it. Open a business checking account and keep it completely separate from your personal expenditures and accounts. Save every business-related receipt, whether you think you'll need it or not.
- Don't be the bill-collector.Get someone else -- your mom, your spouse, anyone -- to make these calls for you. Let your clients imagine that you're thinking about their business, not chasing people for money all day.
- Don't forget to pay yourself, and to save.Yes, you need to re-invest in your new business, but don't forget to look out for numero uno. Pay yourself a salary, and take excess cash out of the business at year-end. Most important, don't stop saving for your future. There are options out there for lone wolves like you -- ask your financial advisor about the SBO 401(k) (also known as the Self-Employed 401(k), Individual 401(k), or Solo 401(k)). But you don't have an HR department to help you fill out the forms, so you have to take the initiative.
For more information:
How To Become A Consultant
How To Become A Marketing Consultant
What You Shouldn't Do In The Freelance Business