How To Start Freelancing (Without Quitting Your Job)

Got a job that's totally boring but pays the bills? Hold onto it. But don't use it as an excuse NOT to go after your dream of being self-employed doing something you love.

A common misconception about successful independent workers is that one day, in dramatic fashion, they quit their dayjob, hung a shingle and lived happily ever after. The truth is, most freelancers start off moonlighting, volunteering, interning, and doing client work at night and on weekends in addition to a nine-to-five gig. If you fantasise about living the freelancer life, you can do the same — even in a recession, starting now. Let's turn some of your free time into a new career without giving up the steady pay.

Freelancing in a Recession: Inroads and Safety Nets

Armies of employees have gotten laid off in the past year, and when you're one of the survivors still on payroll, the natural instinct is to feel grateful you were spared, hunker down and not make a peep. The idea of looking for contract work when the unemployment rate is so high may seem ludicrous. However, there are contracts to be had. Freelancers cost companies less than full-time employees, and major waves of layoffs often create opportunities for contractors to fill in the gaps.

Doing freelance work in a time of job insecurity benefits you in two ways. First, it diversifies your income stream. When you freelance on the side, you don't depend on a single check to pay your bills. If you do get let go or have to take a salary cut or furlough, the side income softens the blow to your bank account. Secondly, freelancing for clients is the best way to show off what you can do to potential employers. When you freelance you're in constant "interview" mode, hoping to get re-hired or recommended to other clients. If you lose your job or decide to leave, you've essentially already interviewed for your next gig.

The point here is that even in a recession, freelancing is far from impossible — in fact, it's downright smart.

Put Yourself on the Market

The tough part about becoming a freelancer — especially for introverts — is putting your name out there and having to hustle to sell your services. In addition to whatever work you do, being a freelancer means you also have to be a salesperson.

How you should put yourself on the market and showcase your offerings depends on your field. If you have no idea where to start, find some great freelancers that do what you do, and follow their example. It's probably safe to say you'll need some kind of website, business card, and a portfolio or CV. Don't skimp on this stuff: Instead of settling for a free hosting account somewhere, spend the $US20 to register a domain name and put together at least a one-page website describing who you are, what you offer, and contact information. If you're a photographer, include a gallery of your best photos; a programmer, a list of projects you've contributed to; a project manager, a list of companies you've worked for. If showing off actual work you've completed isn't possible, gather together some testimonials from folks you've worked for that get across your best skills.

Don't do anything crazy like advertise your services in the newspaper or on the internet right away. The best way to find work is through people you know and referrals from happy clients.

How to Find Contracts — and When to Work Pro Bono

Once you're officially on the market, it's time to get some clients. Remember that old saying about who you know versus what you know? It's so true. In my experience, referrals from people you know — the most vague acquaintances, even — yield the best business opportunities. Let your friends, business associates, former co-workers, fellow book club members and the guy sitting next to you at the barber shop know you're available to do freelance work. Don't be annoying, but don't be shy, either. People are much more likely to hire someone recommended by someone they trust, so it's up to you to work your network. When you do, remember that other freelancers are not your competition — they're your friends. Knowing other contractors who do the same or similar work just widens your pool of contacts and potential clients. Be generous and send referrals their way, and they'll return the favour.

When you've exhausted referrals from folks you know in person, you can try advertising your services more broadly, but use the right outlets. The key is to find your audience. Figure out where your ideal clients look for contractors and get yourself listed there.

If you're just starting out and need to fill in your portfolio AND kickstart potential referrals, consider doing pro bono work for a non-profit or deeply-discounted work for a desirable client. I hate advising fellow freelancers to charge anything less than what they're worth, but the reality is that sometimes you have to give something away to prove yourself and earn opportunities down the road. (In fact, I was in the right place at the right time to start Lifehacker precisely because of a barely-paying internship.) You don't have to work for free on an ongoing basis to use this strategy: try speaking at a local event for free (and mention that you're for hire), or offer a free trial of your services for potential clients. But remember: Only give these freebies to good prospects.

Pricing Yourself: When Time Really Is Money

Even after seven years of freelancing part and full-time, answering the question "What's your rate?" is still a challenge for me. Your hourly rate will depend on the project, your industry, market, location, the economy, your experience and how deep-pocketed your client is. Pricing conversations can be a scary game of chicken that take pluck, confidence and a strong sense of self-worth to navigate. As a general rule, when you're quoting an hourly rate, overestimate both time and money.

When you're just starting out, the tendency is to underprice yourself because you really want to score the contract and you're optimistic about the number of hours it'll take to complete. However, you'll forget to take into account things like taxes and time for administrative tasks. As you get more experience, you'll adjust your prices, learn how to read different types of clients and what their budget range will be, and have enough confidence to walk away from contracts that aren't worth taking. I'm much more likely to do interesting work for lower prices, but I'll only take on tedious stuff that's well-paid. When it's time to ask for the upper range, I use an unscientific method: I quote the highest rate I can while still keeping a straight face.

When it comes to scheduling, don't forget that you'll be doing this work at night and on weekends, and things almost always take longer than your initial gut estimate. So, overestimate the number of hours a job will take. It's always better to set expectations and deliver early than have to pull an all-nighter and barely break even.

The Financial Life

Sending out invoices and chasing down unpaid ones, filing activity statements, itemising tax deductions, managing your own retirement fund — these are all necessary parts of a freelancer's financial life. Do yourself a favour and put a good system in place for making sure 1) that you're getting paid for the work you do by invoicing promptly and following up and 2) that you're putting aside money to pay estimated taxes on that money. Once you get that system down — and it should be easier with the cushion of a day job's steady pay — you'll be ready to face the "feast or famine" state that is a full-time freelancer's financial reality later on. I use a simple "Waiting for payment.txt" file and schedule calendar reminders to check that list once a month and do my activity statement each quarter. Start slow, see how your side gigs affect your financial picture, and work from there.

With your day job in hand, you can start your freelance career with less pressure to make loads of money right away; you'll be able to get the word out, establish a client base, build a portfolio, and set your prices on your own time. Do you moonlight as a freelancer? What's your best piece of advice for those just starting out? Let us know in the comments.

Gina Trapani, Lifehacker's founding editor, welcomes you to the ranks of the self-employed.

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Comments

    Very nice write up... I was about to head into the full time freelancer as a graphic designer very soon (first oversea trip then I'm diving right in) and it's good to hear advice from freelancers.

    If you've some more tips... I'd love to hear them as the whole idea is becoming a fearful thing.

    I've been a freelance writer (entertainment, music, film) for 2 years and I've never been paid. Tough market.

    Hi

    Your article was really interesting, but i'm having trouble still with a question. I;'m from the UK, here on a working holiday Visa, and i have actually managed to secure some possible freelance work. The issue I have though is whether i have to register myself as a business, which i'm not sure i'm allowed to do, or whether i can just operate using my name and tax file number? Any help on this would be much appreciated!!

      Hi Cathy, did you ever find the answer to your question? I'm in a similar position. Could you please e-mail me on [email protected] if possible? Thanks.

    Hi I dabble in some Freelance writing though I direct my services at small businesses or individuals e.g I'm helping a client with documents/ forms for a legal battle and he doesn't know how or what to do and I just have a knack for things. I'm interested in more the business writing side of things I've been researching but having trouble finding some grounded information... Any ideas, suggestions throw my way :-)

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