Did you know that there are more than a billion freelancers in the world? If that figure shocks you, you might want to sit down for this next statistic: that amount is expected to grow by 65% over the next 5 years.
As crazy as these numbers sound, they’re also reassuring—especially if you’ve been dreaming about how to become a freelancer and start your own business. In short, the dream is real, and more people than ever are doing it.
Freelancing is a thrilling adventure filled with all the ups and downs you’d expect from any great trek. So take a deep breath, settle in, and take some notes. Because we’re going to walk you through how to become a freelancer—from transitioning from your day job to freelancing full time.
Ready? Let’s go!
The 3 Things You Need to Do Before You Start Freelancing
Before we get into the nitty-gritty of how to be a freelancer on a full-time basis, there are a few things you need to figure out before confirming it’s the right path for you.
1. Lock-In Your ‘WHY’
Why do you want to become a freelancer? While there could be many reasons you find freelancing attractive, what’s that one reason driving you to take the plunge now?
Your “why” will serve as your North Star. It’s the thing that won’t let you quit when things get tough (as they definitely will). Whether you’re struggling to find clients, manage competing projects, or simply trying to get clients to pay an invoice, your “why” will stop you from throwing in the towel and going back to your day job.
2. Give Yourself a Deadline
The most important things in life tend to follow timelines. Turns out that when we think we’ll eventually get around to eating better, working out, visiting our grandmothers, or learning Spanish—it doesn’t happen.
Right now, you’re learning as much as you can about how to be a freelancer, but you probably haven’t made any hard decisions yet. Rather than having a single date for completion, pace yourself with individual timelines for important tasks such as:
- Figuring Out Your Niche: If money and responsibility weren’t a consideration, what kind of work would you want to do? This decision usually comes down to asking what you’re good at, what people will pay you for, and what you enjoy doing. Your ideal niche usually lies in the middle of these 3 factors.
- Finding Your First Client: Are you really a freelancer until you work with clients? It’s easy to get lost in the research, planning, and setting-up phase of your freelance business. If you’re not careful, another year will have passed and you’ll still be without a single client. Giving yourself a deadline to land a client makes it real, pushing you to go out there and market yourself.
- Quitting Your Day Job: The ultimate goal of starting a freelance business on the side is to quit your day job and start freelancing full-time. But if you aren’t deliberate with your planning, you’ll never be ready to quit your day job. While there’s no specific timeline to quitting your day job, some freelancers transition in as few as 3 months. For others, it takes up to a year. It all depends on how well you plan the transition and how quickly you’re able to find clients.
3. Do the Math
While you don’t have to wait until your freelancing income matches (or surpasses) your day job income, you do need to figure out some money-related stuff. First up is how much money you will need to survive, how much you’ll need to live comfortably, and how much you’ll need to thrive.
Let’s dig deeper into these financial levels:
- To Survive: The amount you need to survive includes money for rent, food, health insurance, utility bills, school, and installments of any debt/loans that you may have to pay. Basically, all the necessities of your life. This is the amount that you absolutely must make before leaving your day job.
- To Live Comfortably: This includes everything you need to survive, plus things like entertainment, a car, and the occasional splurge.
- To Thrive: What does the top of your game look like? Is it having enough money to travel? To buy a home? To focus more on your hobbies?
List your expenses for each set of numbers. Not only will doing so tell you how much you need to make, it also gives you benchmarks to reference as you’re moving from surviving as a freelancer to living comfortably, and finally, to thriving.
Once you have crunched the numbers for the first question, it’s time to decide how many months of savings you want before you quit. Ideally, it should be 3-6 months. This amount gives you the buffer you need to make decisions that pay off for your freelance business in the long run, without having to scramble for short-term gains. You also won’t have to worry about finding clients or matching your full-time income right from the first month.
Before quitting, explore your insurance options. One of the biggest benefits of a day job is having health insurance for yourself and your family. Unfortunately for freelancers, the individual costs go up and the options are sometimes limited.
Every business has expenses—even those run on nothing but a laptop. Once you start freelancing, your internet connection, laptop, smartphone, and any business services and apps you pay for are counted as your expenses. If you work from a dedicated home office, you can also count a portion of your housing and utilities costs as business expenses.
Pull up a list of expenses you already have and see which ones are necessary for any freelancing you do. They’re now your business expenses and will continue to be after you leave your day job.
3 Steps For Becoming a Freelancer While Working a Day Job
Once you’ve locked in your “why,” given yourself deadlines, and done the math, it’s time to dive into the nitty-gritty of starting a freelance business while working a day job. Remember not to try to do everything at the same time or you’ll end up overwhelming yourself. In the beginning, it’ll be slow going. And that’s okay.
Step 1: Researching the Profitability of Your Idea
If there’s one thing we emphasize at Foundr, it’s the importance of research. Imagine freelancing with a day job—sacrificing family time, working nights and weekends, and investing money in your new business—only to find out a few months later that your idea isn’t profitable.
We understand that you’re probably anxious to start working on your freelance business, but if you don’t do the research first, you won’t be able to make the right decisions.
What you need to find out now is whether your specific freelance business idea is profitable or not. Here are a couple of key questions you need to answer:
Is There a Market?
If you can’t find clients, your freelance business will never succeed. One of the easiest ways to conduct market research is by talking to the people and businesses in your target market.
When contacting businesses you’d like to work with, ask them if they work with freelancers or whether they outsource your services to freelancers. Why or why not? To stand out, ask them about their problems and frustrations in the past when working with freelancers, or dealing with the type of work that you do.
Who are the Notable Freelancers in Your Field?
Evaluate the freelancers who are already working in your niche. How did they get started? What advantages did they have? What kinds of clients are they working with? Find out as much about their businesses as you can.
You don’t have to be adversarial with your competitors, as the freelancing community is extremely supportive. Take the time to build relationships with your peers and reach out to ask for advice or help. If you’re in the same city, offer to take them out to lunch or coffee.
Step 2: Planning Your Freelance Business
Now that you’ve validated the profitability of your idea, it’s time to take all of that research and turn it into your business plan. At this point, you’ve probably developed a pretty good idea of what you want to do. Writer, photographer, designer, financial coach—the possibilities are endless, and depend entirely on the market, plus your skills and interests.
Lock-In on a Specialty
Now you need to pick a specialty, either by type of service or by industry. This is essential because it helps you stand out. Let’s say a client is looking for a nutritionist for their 12-year-old. They run a search, ask for a few recommendations, and narrow it down to 4 nutritionists that look promising.
Who do you think they’ll choose? The nutritionists who work with clients of all ages or the one who specializes in working with pre-teens? As a parent, the client would want someone who understands their child’s unique needs and knows how to deal with children.
Generalist freelancers are a dime a dozen, and will always have a harder time getting work. Picking a specialty is a two-step process:
- Choose the kind of work you want to do as a freelancer
- Choose the kind of clients you want to work with
The good news is that your choices aren’t set in stone. If you choose one type of client and realize they aren’t your ideal, you can always pick another. That’s the beauty of running your freelance business. You have the freedom, not just to make your own decisions, but also to change your mind.
Create Your Core Offering
Since you’re still working a day job, starting a full-service freelance business may not be feasible. Instead, create one core offering and package it into a replicable product.
Your core offering is what you’ll be most known for, and you’ll build your business around this prominent service. For example, if your specialty as a freelance writer is blogging, then you can create blogging packages that your clients can buy. Doing so saves you time and gets money in your hands faster. You won’t have to email back and forth, ironing out the details, and clients will know exactly how much the work costs and be able to buy it instantly.
Set Your Freelance Pricing
When it comes to setting your freelance rates, you’re in an advantageous position early on. You don’t need to charge rock-bottom rates just to start earning because your day job gives you the security necessary to find clients who aren’t bottom feeders.
That said, pricing is subjective. A high rate for you could be a low rate for another freelancer. In fact, this is one area of freelancing that tortures a lot of newcomers. Here are some basic tips to make sure you’re on the right track:
- Make sure you’re charging per project (instead of per hour)
- Quote rates that motivate you to give your best
- Raise your rates every 3-5 clients
To find out what the market rates are, scout other freelancers’ websites to see if they list theirs. You could also ask about rates in Facebook groups and other forums. We’ve even seen ambitious freelancers create anonymous pricing surveys and send them out to other freelancers in their industry.
Whatever rates you set, start with an income goal and calculate what your minimum hourly rate works out to (even though you won’t be charging your client by the hour). If you don’t crunch these numbers, you might find yourself accepting a project that looks like it pays well but works out to a dismal hourly rate once you put in the time.
Build Your Freelance Business Assets
As a freelancer, your portfolio, client testimonials, case studies, and blog are your assets. They create your image, build trust, and establish your authority. And they’ll have the power to convince clients to hire you long before they’ve ever met you.
Make sure you have assembled and refined your assets before you quit your day job. It’ll make landing clients a lot easier.
Build Your Freelance Portfolio
Most freelancers don’t have any samples when they start out. If that’s the case for you too, look into creating mock samples. Are you freelancing as a writer? Write a blog post. You can even start your own blog or guest post on blogs your target clients read.
Web designer? You can start building a portfolio immediately by creating a website and a logo for your own business.
Working for free or at bargain basement rates is a hotly debated topic in the freelancing community, but it is another potential option for building up your portfolio. A classic example of this is the photographer who shoots a friend’s wedding or headshots for pennies on the dollar in order to build up some high-quality samples.
Testimonials legitimize your business and establish trust. Unfortunately, you can’t get them until you work with clients. This is where your day job comes in handy. If you’ve received LinkedIn recommendations or won awards based on work done at your day job, use them until you get more specific examples from your clients.
In case you aren’t freelancing in the same field as your day job, ask your colleagues and managers to give you testimonials that highlight traits your freelance client will find attractive. Consider relevant traits like never missing a deadline, excelling at an organization, always contributing innovative ideas, and going above and beyond the call of duty.
Step 3: Executing Your Freelancing Plan
Now that you’re done with step 1 (research) and step 2 (planning), it’s time to make things official. When looking for your first clients, focus on tactics that give you more control. Here are a few proven methods for finding clients:
Talk to Your Personal Network
A lot of freelancers avoid telling their friends and family what they’re up to until their freelance business is doing well. That’s a mistake because these people are rooting for you and are often happy to help.
A simple email telling them about your new business, the services you offer, and the people you can help (your prospective clients) is enough. Include your details in the email and simply ask them to forward them to anyone they think would be a good fit.
Try Cold Outreach
If the term “cold outreach” gives you cold shivers, you aren’t alone. Cold emailing intimidates most freelancers. But as a freelancer, selling your services is a must-have skill.
Take time to research the companies you’re reaching out to. Read their blogs, sign up for their newsletters, and follow their social media accounts. This way, when you reach out you can talk about how you can help solve their distinct problems. And even if the person you’re contacting isn’t the decision maker, the chances of them referring you grow exponentially.
Offer to Pick Up Overflow Work From Other Freelancers
Most freelancers build their networks to outsource work to other freelancers and refer projects and clients they either outgrow, don’t have the bandwidth to take on, or aren’t interested in taking.
So feel free to reach out to freelancers in your niche and ask them if they have any overflow work they’re looking to subcontract or pass on. Include samples of your work so they can feel comfortable sharing clients with you.
Free Resources for Freelancers
We’ve curated a collection of masterclasses for freelancers and entrepreneurs who want to build brands that stand the test of time. Each of these courses is taught by proven entrepreneurs who are willing to share the blueprints of their success. There is no charge for these masterclasses, so visit our library today and see which resources will be of most value.