Most creatives freelance at some point. Either as extra nights-and-weekends work, filling gaps between jobs, or building your own business. I advocate for learning the basics of doing client work. It gives you immutable job security. If you know how to find clients and profitable work, you’re never unemployed. The ability to fend for yourself provides freedom.
At some point, you’ll face the decision: should I freelance or work full-time? It’s a personal decision, and there is no correct choice. The only wrong choice is being indecisive and not moving forward.
I’m Talking About Building a Business, Not Just Side Gigs
First I want to distinguish between freelancing and building a service business. Freelancing could mean taking side gigs here or there and making a quick buck. If you are considering client work as primary income, then you must approach it as building a business, not gig hopping. You’ll need consistent sales and marketing processes, and the ability to manage your cash flow.
The Factors In the Decision
Long term, my goal is complete financial independence. I’m aiming to have assets that generate enough cash flow so that no longer have required work. The simplest, most conservative strategy is to have enough investments such that 4% returns pays for everything. In the interim, work is finding the quickest path to that solution.
From that perspective, we have a starting point. “Will freelancing help me reach independence faster than full-time employment?”
But that’s just one factor. If all we did were optimize for retirement, we’d all end up working in finance, fueled by a diet of rice and beans. In the interim, it’s about optimizing both cash flow and lifestyle until you are at a point you are no longer required to work to sustain yourself.
But wait, doesn’t freelancing provide more freedom? After all, that is the origin of the term, Although I prefer the Westerosi version of Sellsword. In some ways, it does.
But it’s complicated.
What Are Some of the Benefits Freelancing Offers Over Employment?
Control Over Your Time & Schedule
One of the reason’s people see freelancing as appealing is they see it as working whenever they want as much they want.
Spoilers: it’s not.
Freedom isn’t a lack of structure; it’s the ability to build the structure. You have 50 hours of work to do this week. When are they? You are working with clients and will need to be available to them at some point. You aren’t completely divorced from the 9-to-5 world.
But deciding how many of those hours you work and when is still under your control. You also don’t have to ask anyone for vacation time or over time. If you want to make more, work more. If you need a break, scale back the client work you’re taking on. Which leads to the other part of freelancing freedom:
Control Over Your Income
If you want to make more money at a full-time job, how do you do it? Overtime isn’t an option for a salaried creative, so you’ll have to ask for a raise. You may be able to get a few percentage points, but that doesn’t substiantially move the needle. Usually, the only option is to make a diagonal leap to get a higher paying version of your job at another company.
When freelancing, you set your rates and capacity. Nothing is stopping you from doubling your rate on your next project. You also have more say on how you get paid. You can get paid upfront or net 60. You can bill hourly or with fixed fees. Sometimes changing your pricing strategy is all it can take to increase your revenue by 70%.
But neither of these are the real freedom most freelancers are looking for. What you really want is…
Total Control Over Your Process and Your Clients
Who you work for is often the biggest factor in job satisfaction. If you work at an agency that takes on cheap toxic clients and then attempts to get profitable with volume, you’re gonna have a bad time. When you’re running the show, you get to decide who you work for and what kind of work you do. If you enjoy working with clients in the music industry, you can build a pipeline focused on them exclusively. Don’t want to write PHP anymore? Don’t have to.
There’s A Higher Ceiling on Your Income
“You’ll never get rich working for someone else.”
This quote holds true in freelancing since you are working on assets owned by other people. But you can make more working for yourself than you can working for a company. I know several freelancers who make between $150k – $250k per year, and they don’t live in Silicon Valley.
Freelancing Gives You Opportunities To Gain More Leverage
If you’re freelancing and your only billing hourly, you’re doing it wrong. With your independence, you should be finding ways to leverage time and money, not just trade time for money. If you charge a flat fee, you can shave hours off of development buy shopping the shelf instead of building something from scratch. You can outsource tasks to virtual assistants or subcontractors. These tasks allow you to skyrocket your effective hourly rate.
You Get to Be An ‘Entrepreneur-Lite’
Owning a business means owning assets and systems that generate revenue. When your freelancing, you are still responsible for some of the work. In some ways, freelancing is more akin to designing a job for yourself and not building a company. You still learn a lot about marketing, sales, and self-discipline. Being a freelancer means less time working on your craft, but more time sharpening your business acumen.
Freelancing is Lower Risk Than Employment
Contrary to popular belief, employment is the highest risk professional position you can put yourself in.
When you are an employee, it only takes one person deciding that they don’t want you to work at your position anymore and POOF, there goes 100% of your cash flow.
When freelancing, you have a diverse set of clients. In one of them fires you, you should only be losing a small fraction of your income. If you have systems for finding clients, you also have a quicker recovery system.
So What Are The Benefits of Employment?
(Note: much of this part is based on my personal experience and is U.S.-Centric. If you live in a country where health care makes sense, your mileage may vary.)
The Literal Benefits.
You can often get better health insurance at a lower rate than you could being self-employed. There are also some tax benefits if your employer offers you a 401k.
The World Was Built For The Employed
Laws and banking systems aren’t set up with the self-employed in mind. Want a fun challenge for yourself? Apply for a mortgage while self-employed.
If my wife weren’t traditionally employed, we likely would not have been able to buy our first home. It’s easier to get good credit when the bank sees that you have ‘stable’ income. The combination of credit score, a W-2, health care, and a tax-preferred investment account means that full-time salaried employment provides you with a lot of life infrastructure.
You Have a Smaller Burden of Responsibility…
With great freedom comes great responsibility. Sometimes for 100% of a project. On a tea, people have specialized jobs, and you have a support system.
Which Grants You Greater Focus
I knew a freelance developer who was frustrated with all the hours he had to spend hustling. “I wish I could just put on headphones and code all day,” he said.
The, he should get a job.
If you’re a full-time dev, that’s what your boss wants. This means more time focusing on your craft.
There’s Less Variance
People think that freelancing is higher risk, but in reality, it’s higher variance. You may have lean or fat months, busy and slow seasons. Everyone isn’t cut out for variance. Jobs tend to bring more consistency: you work roughly the same number of hours with the same group of people forever and ever. You get roughly the same amount of money every two weeks, which makes budgeting simpler.
Choose Your Adventure Time: Read The Section That Applies to You To Help You Make The Right Decision
Questions to Ask Yourself If You Are Employed and Considering Going Freelance
- Do I have 3 – 6 months runway in the bank?
- Do I have a lot of consumer debt?
- Do I have a list of connections I can reach out to?
- Do I have a plan to get my first clients?
- Have I ever freelanced before?
- Do I have at least two years experience working in my field?
- Do I want to build a business or a better job?
- Do I know how to protect myself legally and get paid?
- Do I have the discipline needed to take complete control over my time and schedule?
- Can I make more money (eventually) freelancing vs. working at my job?
- Will I be happier working for myself compared to working at a job?
Questions To Ask Yourself if You Are Freelancing, And Considering Taking a Full-Time Job
- Will I learn skills at this job that will make a more valuable asset in the long-term?
- Do they have a good benefits package?
- Will I enjoy being a part of the team at this company?
- Do I agree with the team’s core values?
- Will I harm professional relationships by breaking client relationships?
- Can you go back to a ‘team player’ mindset?
- Are you willing to sacrifice the current amount of control you have over your time and energy?