The Pros and Cons
When it comes to working on your own, you can probably envision many of the advantages: working in your pajamas, time off for long lunches and extended weekends at the beach, owning your own destiny, and keeping all the fruits of your labor.
It’s true that freelancing offers flexibility in terms of scheduling. You can work when and where you want, as long as you meet your clients’ deadlines. You control for whom you work and what you do, and a job well done is a credit to you alone. But all this independence comes at a price. Here are the top 5 drawbacks to consulting or working freelance:
Many freelancers complain about the isolation that comes with their jobs. Depending on what field you’re in, you might be alone all day, every day, with just your computer and your telephone for company. Combat isolation by joining professional organizations, taking your laptop to a coffee shop, and making regular appointments to meet with friends and clients.
If you can’t pay your heating bill this month, guess whose fault it is? If the presentation doesn’t get to the client’s office on time, guess who gets to answer for it? If you have no work in your in box, guess who’d better get her marketing rear in gear? You. From emptying the trash to dealing with problem clients, freelancers have to get the job done or else pay someone to do it for them.
- Financial Roller Coaster
Especially when you’re just starting out, freelance finances are tricky. You no longer have the luxury of a regular paycheck; instead, you’re paid when the client’s accounting department gets around to it–and, unfortunately, sometimes not at all. Prepare for the unpredictable: some months you’ll be flush; other times you may just be getting by.
The way to keep your head above water is to keep marketing yourself, even in the good times, and to build up a financial safety net so you’re never on the verge of bankruptcy.
- Lack of Benefits
From health insurance to tax withholding, as a freelancer, it all comes out of your pocket–and adds up! Most freelancers use a formula of 33% when figuring out how much these benefits are going to cost. For instance, if you made $45,000 in your salaried position, estimate that your benefits cost your company an additional $15,000 per year. That’s a substantial amount, especially when you’re trying to make ends meet and get your business off the ground.
Many professional organizations offer their members health insurance and other benefits for a reduced cost. And if you’re married, you may be included on your spouse’s plan. But make sure you know how you’re going to cover these needs by thinking through your business strategy and developing a plan before going solo.
- Sales and Marketing
“I’m not a salesperson,” you might insist. “I’m a graphic designer (or an accountant or a music teacher or…).”
But the truth is, as a consultant, you’re forced to wear a sales hat. To succeed in this endeavor, you must market yourself effectively and keep on marketing yourself as long as you are self-employed. Experienced freelancers spend about one-third of their time pursuing new business.
For some people, the process of putting themselves out there, negotiating rates, and signing contracts is extremely painful. The good news is that it does get easier with time. You can learn more about how to present yourself effectively through resources such as professional organizations, networking groups, and classes through community colleges or adult education programs.
- The Pros and Cons
- Develop a Plan
- Safety in Numbers–and Dollars
- Up, Up and Away