Taking the leap from “side-hustler” to “full-time freelancer” can be both exhilarating and terrifying. While being an entrepreneur is incredibly rewarding, it also has its pitfalls. Not having a regular paycheck or benefits can be a huge deterrent for many people who want to take their freelance business full-time. While there’s no way to guarantee that a business will make it, there are some guidelines that you can follow to decide whether quitting your 8-5 and becoming your own boss is a viable financial option. Ask yourself the questions below to decide if you are ready to freelance full-time.
Do you have the startup capital to launch your new business?
If your freelance business will involve startup costs for equipment, software, etc. you will want to have a few months of payments saved up before you quit your day job. It is also advisable to have a few months of living expenses saved up so that you have time to build up your client base and don’t need to worry if you don’t get paid right away. Don’t forget the cost of benefits such as health coverage!
What is your business plan?
Having a detailed business plan is essential to success as a freelancer. Having a strategy for your business’s finances and a plan for long-term growth is an incredibly important step to take prior to launching your venture.
If you’ve already done market research, taken the time to define your ideal client, researched how to connect with potential customers, and decided on a marketing plan, you’re probably in a good place to take your freelance business full-time!
Do you know how you will handle your business’s finances?
According to AccountingWeb, knowing how you will handling billing, reporting, and tax season is a key step in readying yourself to become a full-time freelancer. Managing your finances should be a key part of your business strategy, not an afterthought. If the financial side of running a business is intimidating, you may want to consider hiring a bookkeeper to handle the day-to-day fiscal matters of your business, such as reconciling accounts and making sure that you have detailed financial records to provide your CPA come tax season.
Are you prepared for the emotional rollercoaster of running a business?
From the daily ups and downs of working with clients, to the “feast or famine” nature of being a freelancer, running a business is emotionally taxing. Ensuring that you are in the right mindset to deal with all of the obstacles that come your way is key to long-term success. Creating a support network, making a plan to beat the isolation by renting a coworking space or meeting up with other freelancers on a weekly basis, and taking financial stress off of yourself by building up your savings will protect your mental health and emotional energy as you start your freelance journey.
Starting your own business is an incredibly exciting period in your life. Taking the time to make sure that you are set up for success will make your transition to full-time freelance work even more enjoyable and will ensure that you enjoy all of the newfound freedom that comes with being an entrepreneur.