In August, I quit my job as a long-term contractor at Cisco to officially make the leap to freelancing. I did some side projects earlier in the year, but not enough to replace my full-time income. I want to share my experiences and tips from these first three months as an independent contractor for anyone else thinking about making this change.
Get a Project First
If you’re currently working, don’t quit until you have a project lined up. Obviously, not everyone has this luxury, but if you do, stay put until you’ve signed an agreement with a new client. In my case, I had been talking with a potential client for several months before a project finally came up that was big enough to justify quitting my job.
Put Money in Savings
This is hardly unique advice from me, as I received it from several people myself, but save up money before you start. You need a cushion in the bank to cover expenses when you’re getting started. Many clients have a 30-60 day lag before you get paid, so even if you have billable hours from day 1, it may still be two months before you get a check.
As with the previous tip, I know not everyone is in as fortunate a position as I was. If you are working currently though, and are thinking about moving to freelance, start saving now. I’d been considering this switch for over a year, so we had 6+ months of living expenses saved before I left Cisco. That has significantly reduced my stress levels.
Be Ready for Delays
I’ve experienced a lot of “hurry up and wait” with clients. I finally get a PO signed, but then the SME isn’t available. The design document is approved, but the rest of the project is held up
When I quit my full time job, I had a big project lined up, one that would easily cover my expenses and keep me working pretty much full time for two months. I figured I didn’t need to work too much at getting other clients right away since I’d be too busy with this big project to do anything else anyway. Then most of the work got pushed back from August to October, and I was caught off guard. Fortunately, as noted above, my husband and I had money in savings to cover some slow weeks, but I wasn’t expecting the amount of delays I’ve had. In hindsight, I wish I’d gotten other clients lined up sooner. On the other hand, I took the slow time to build my business website, set up an LLC, meet with a CPA, etc., and it was nice to have the down time to address those details.
Multiple Income Streams
One independent contractor I know has talked about never wanting to be “owned” by a single company again after a less-than-wonderful experience as a salaried employee. Michele Martin made this great observation a few weeks ago: “Would you rely on a single company’s stock for your retirement fund? Why, then, do you rely on a single organization for your salary? … Strength and security is found in diversity, not homogeneity.”
Part of my mistake with not being ready for delays was still relying on one particular client for my work, then scrambling to find something else to fill the time when the project was postponed. Now I know there will be delays and slow periods, so I’m building up clients so I’m not so beholden to one organization or another. I’m not quite where I want to be yet, but I’m getting there.
Professional Liability Insurance
One thing I didn’t initially realize I needed is professional liability and errors and omissions (E&O) insurance. A few clients have asked about it though, so I’m getting prices now and plan to have it soon. Other people I’d talked to about freelancing had mentioned setting up an LLC, getting a privilege license for the town where I live, and so on, but nobody talked about the insurance. I’m not sure if many people don’t get it, or if everyone I talked to just assumed I already knew about it.
Build a Network with Social Media
Most of the clients and potential clients I’m working with are people I connected with through social media. In a single two-week period in October, 10 different people contacted me about potential instructional design contracts, and 6 of those found me through either my blog or LinkedIn. The typical path people take is searching for a phrase like “instructional designer” on Google, finding a post like What Does an Instructional Designer Do?, and then visiting my business site or portfolio. It’s too soon for me to know what else I may have to do for marketing in the future, but so far, my blog is definitely working as a marketing and networking tool.
I got some good tips and resources from several people when I asked previously about getting started as a freelance instructional designer. Those of you who have made this leap yourself, or are thinking about it, what other tips do you have?
Image credit: Leap by tricky ™