Becoming self-employed is a dream held by millions of people: the freedom to cast off the shackles of the 9-to-5, to be your own boss, and set your own schedule are all exciting prospects. But, it’s all too easy to see a potentially brilliant freelance consultancy venture collapse because of poor planning. The simple reality is that being self-employed isn’t for everyone, and the last thing you want is for your venture to fail within your first six months.
So, how can you be sure the freelance lifestyle is for you? Let’s look at five things you need to consider before you become a freelance consultant.
1. Am I becoming self-employed for the right reasons?
We’ve all worked in less than flexible organizations and dreamed of being our own boss, but that’s not exactly the basis for a successful freelance career. If you’ve got problems at work, especially with the upper brass, it’s very tempting to pack it all in and take your consultancy talents on the road, but you need to proceed carefully. If you’re planning on becoming a freelance consultant, do it because you’ve got a great idea and the passion to make it work, not because you’ve had a bad day at work. Don’t forget that some companies will allow you to work a reduced schedule if requested, allowing you to start your own business on the side while retaining the safety net of a consistent income.
2. How can I find work when becoming self-employed?
One of the first questions you should ask yourself is, how exactly will I find work? You won’t have a manager assigning tasks to you when you’re running your own business, and it’ll be down to you to find your next gig. Do you have any work lined up, or anyone that’s expressed interest in your services already? Do you know how and where to network? The good news is that there are plenty of resources that can help you get started, not to mention your own circle of friends and connections. It’s always a good idea to have a few interested parties lined up before you take the leap.
3. Am I self-motivated enough?
If you’ve not got the self-motivation to chase invoices, find new work, and all the other minutiae you don’t need to consider as an employee, this is probably not the right career path for you. Life as a freelancer can be incredibly rewarding, but it can also be challenging and tiring. There’s no one to catch you if it all goes wrong, and no one else to carry the blame if you’ve had a bad day. Overcome these hurdles and you can build an experience where work is flowing freely and you’re in total control of when and where you work. If you’re not self-motivated enough, though, you’ll never get out the starting gate.
4. Can I afford to become self-employed?
As a freelance consultant, you may need to organize a few pieces of equipment and/or software to get your business up and running. The cost of a laptop/PC alone will be a few hundred euros, and that’s before you consider any home office equipment you may need. It’s also worth remembering that when you set your daily rate or hourly rate, you’ll need to consider that, as a freelancer, you don’t get paid for sick days or holidays. With all this in mind, you’ll need to be sure you have a financial cushion that can help you get your new business off the ground. A good rule of thumb is to have your next three months of rent/mortgage payments, bills, food, etc. covered before you take the plunge.
As a first step, we recommend talking to an accountant to ensure that you have the funds to comfortably finance your first few months as a freelance consultant. For example, Crunch—a powerful online accounting program, can help you better plan for your future career shift.
5. Am I prepared to become self-employed?
Above all else, you need to ask yourself: “is now the time?”. The most important thing to remember about this question is that it’s completely okay if the answer is no. Just because you’re not ready now, doesn’t mean you won’t be in the future. A little more planning and you could be in a much stronger position. If any of these five questions have given you a reason to pause, don’t look at them as death knells for your freelance ambitions. Take some time to address any areas where you feel you may fall short, and soon, you too could be ready to jump into the exciting, rewarding world of self-employment.
While all five of these considerations are important, there are still a few more you need to take into account before you go independent. You can read the rest in our “13 things to consider” article or check out this piece on How to Become an Independent Consultant.