What to Know Before Going Freelance

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So, you’ve decided to make the leap and go freelance. While it can take some time to get started, working for yourself can feel hugely rewarding. Here are a few things to keep in mind before you take the plunge and become your own boss.

Building your clientele

Unless you’re in the position to leverage an existing audience into clients, going freelance often means building a client base from scratch.

You’ll have to directly manage your relationships with clients as well. Different clients have different expectations and personalities, and you’ll have to get used to working with them directly. For some, this is a natural outgrowth of their previous job duties. Others may find themselves learning customer relations on the fly. As your freelance career develops, you’ll fill out your portfolio and build your reputation, and it may become easier to get new clients.

Taxes are different

Tell your friends you’re thinking of freelancing, and you’ll probably get at least one mention of taxes.  With taxes, a big difference between being an employee and a freelancer comes down to who is responsible for tracking and withholding the taxes you owe. For example, in a conventional workplace, your employer withholds part of your taxes, including for Social Security and Medicare, before cutting your check. As a freelancer, it becomes your responsibility to allocate money for those taxes and, in most cases, pay them on a quarterly basis.

Time management skills

Being your own boss means being able to set your own schedule. It also means having to manage your time wisely to meet client deadlines. Feel free to work whatever hours you find yourself most productive—that’s one of freelancing’s big draws, after all—but consider being open to communication during regular working hours. You’ll want to be able to exchange feedback and revisions quickly, and being in sync with your clients makes that a lot easier. 

All that said, the lack of a schedule, combined with not knowing when the next project might come, can also push freelancers to overwork themselves. You’ll want to manage any tendencies toward procrastination, but it’s just as important to impose limits on the amount of time you spend working. There’s no boss or colleague to set you straight if you burn out; it’s important to train yourself to work responsibly and sustainably.

Whatever your schedule, there’s no one to manage or supervise you but yourself, so be sure to set thoughtful milestones and goals you can stick to.

Making your side gig your full-time gig

Most people in traditional workplaces have some form(s) of insurance included as part of their compensation. As a freelancer, you’ll have to make those choices on your own. If you want to freelance full-time, you’ll want to make sure your bases are covered. 

If you’re concerned about making sure your loved ones are provided for if you’re gone, consider getting an individual life insurance policy. The death benefit can provide financial security for your family if you pass away unexpectedly. You might want to consider the added benefits of a permanent life insurance policy like whole life insurance. Whole life comes with lifelong coverage and a guaranteed death benefit as long as you pay the required premiums, as well potential dividends and a cash value that builds over time. 

You don’t necessarily need to spring for every benefit out there, but consider the ones you can leverage into further financial security.

Dividends are not guaranteed. This publication is not intended as legal or tax advice.  Financial Representatives do not render tax advice.  Consult with a tax professional for tax advice that is specific to your situation.

Source: iQuanti