Why Freelancing Can Work For You
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Some people believe freelancing doesn’t work, or it’s not sustainable.
When I talk about freelancing as a way of approaching one’s career, the most common feedback I’ve heard are: “There’s too much stress and too many uncertainties!” or “I don’t have the will or energy or keep looking for new clients.”
This article is for you if you:
1. Haven’t tried freelancing and fear it won’t go well, or you may find it difficult to visualize how it’s going to work.
2. Have tried freelancing but found the attempt unsuccessful, or even categorize it as a failure. You can use this information I’m about to share with you as reflections and see what you could potentially have done differently, or be better prepared the next time you enter the freelance market.
Myth #1: I won’t make enough money to make ends meet
When I worked as a full-time project manager in small and large agencies in Boston, MA., most freelancers we hired in the creative domain (designers, copywriters, developers) charged between $85-150 per hour. There are exceptions with expert freelancers who charged $250 or more, and we gladly paid for it, because they are that good. How good? They deliver value and results in hours rather than weeks. I suppose I should write about How to be a Top Notch Freelancer in a different article by interviewing these superstarts in the freelance market.
If we choose the median hourly rate, $100/hr, that’s $100,000 a year while working half-time (20 hours per week).
If the same freelancer were to work full-time (40 hours a week) given his or her level of expertise, the expected salary is around $100,000 if not a little less depending on their location.
Myth #2. Freelancing takes more time
As mentioned in Myth #1, it takes much less time to make the same amount of money when you freelance. Many freelancers also choose to work from home, which saves commute time as well.
As of 2015, an average American spent 2 weeks of his or her time each year on commute alone. That’s 24 hours a day, 10 days straight, about 240 hours in the car or public transportation between home and work. [Source]
Now imagine your hourly rate at $100 per hour, that’s an additional $24,000 you could make sitting at home (or, you can rest and watch Netflix too).
Myth #3. Client-base is unstable for freelancers, therefore freelancing is unsustainable and very risky.
It’s true that a freelancer’s clients might change more frequently. This isn’t a bad thing. In fact, because freelancers have multiple clients to work for, as opposed to a full-time position where you have a single employer, freelancing is simlar to having multiple streams of income.
If one client is unable to give you enough work, another client may be able to fill that void.
I’m a firm believer in having multiple streams of income which is a topic slightly outside of what we are discussion here. To learn more, check out my podcast interview with Dorie Clark, who talked about her new book Entrepreneurial You and why multiple streams of income is crutial for your financial success.
Myth #4. The Health Insurance is a nightmare
If you a healthy 20 or 30-something year old, you average health insurance is about $200-300 per month without a full-time job (that’s $2400-3600 per year, roughly). This can vary more or less depending on your income from freelancing. I wrote an extensive article on how it works.
There are other alternatives to get around paying health insurance as a freelancer. If you have a spouse who works full-time, you could certainly participate in his or her family health plan through an employer.
If you are a single parent, or you are the only working member of the family, you may get help paying for your family’s health insurance. In fact, you can earn up to 400% of FPL (Federal Poverty Level) and still quality. For a family of three, 400% of FPL is $79,160 net income (as of 2017).
The concept of “net income” is key - it refers to your income minus business expenses, losses, etc. When you freelance, you can deduct a number of expenses from supplies to software to travel - and health insurance payment is also deductible!
if you make well over 200K a year, your family health insurance may be higher and you might not get much help. What we are focusing in this article are freelancers who are starting out and may struggle to pay for insurance while things are influx.
Myth #5. I need to start my own company in order to freelance
Most people know that they can absolutely freelance without establishing a company of their own. It’s called freelancing as a sole proprietor.
Though it’s not required, there are benefits associated with freelancing as a founder or an employee from your own company, rather than as a sole prioretor.
For exmaple, Feisworld LLC is a single-person LLC.
The key differentiator is that when things go wrong with freelancing (i.e. Law suits - very rare, but it can happen), you are not personally liable, and your personal assets (your car, your house, etc.) aren’t liable either. This is a very general statement, I highly recommend that you speak with an attorney to fully understand your unique situation.
Here’s the article I wrote on How to Incorporate Your Business in 4 Simple Steps
While the steps are simple, some people do prefer to work with an attorney for ease of mind. In which case, Legalzoom and similar firms offer affordable options to complete the process for you.
As for me, I’ve always been a self-starter so learning the process was exciting for me.
There are many more myths related to freelancing and we won’t be able to cover them all here. Follow us on the Freelancers Starter Kit - a blog I started to new freelancers., and drop me a comment with any questions!
Tip #1. Have some professional experience under your belt can help you navigate a freelance career better
I have seen freelancers in their early 20s. Some are fresh out of school, and some had been working since their teens.
While freelancing isn’t for everyone, it can be challenging for those who haven’t received much professional guidance. This is what I’ve witnessed through years of mentoring people (interns, young associates) in marketing and advertising.
Tip #2. Working full-time might be a good foundation before you freelance
As a freelancer, you aren’t always integrated into the company culture. You don’t get the same emails, go to the all-hands meetings. For good and for bad, full-time experience offers perspectives and informs decisions on your freelance career.
Freelancers can sometimes feel like solopreneurs. While they often are part of a team, but they can also spend a long time working solo with limited interactions with others. Full-time jobs, while early in your career, can foster good and even lifelong relationships.
Tip #3. Feeling alone as a freelancer? Head over to the office or a coworking space!
Surrounding yourself with other individuals while you work could enable better learning opportunities.
As a freelancer, an easy alternative is to go to the client’s office. Face-to-face interactions are extremely important and it’ll help cement your client relationship for future work too.
But a client office isn’t always an option. Many freelancers today work with clients who have no physical office space. Instead, they may find themselves quite happy at coworking spaces such as WeWork, or Assemblage (NYC). Find a coworking space near you: https://www.coworker.com
Hope you find this help, please let me know in the comment area below.