What are the benefits of being a freelancer?
I have over ten years of experience consulting in a corporate agency. I've seen many of my colleagues and friends leave to do it on their own. I feel like I would enjoy being my own boss, but I also have a family that I want to continue to support with benefits and insurance. What benefits of being a freelancer justify giving up the security of a corporate job?
There are both advantages and disadvantages to being on your own.
1 You end up working much longer hours, sometimes 7 days a week and don't see your wife and kids as much. This is particularly good if the wife is a pain and the kids are brats.
2. You get to support your government more since your taxes will be higher on a dollar for dollar basis. The government is running a deficit and social security is in trouble so you can do your part to help.
3. You will possibly make less money and that saves worrying about investments and saving for retirement.
4. It is hard to get away from your own business so that saves all the work and effort planning for vacations. You won't be easily able to take one so that is a real benefit.
5. It makes life more exciting since you will have times you don't know where your next dollar is coming from.
6. You need to wear many hats well. You need to be skilled at creativity, customer acquisition, advertising and promotion, HR, accounting and taxes and the list goes on and on. With all those hats you need to have more heads sewn on your body to wear them and plastic surgeons charge a lot for sewing on more heads,
1. The potential is greater. You get to keep all the income you generate instead of a big part going to your employer. That means more worrying about where to invest your money,
2. You are the only limiting factor in your potential success. If you have good ability you can be more successful. Of course if you are a dud you can lose everything.
3. You are on your own. The upside potential is unlimited but of course so is the downside.
Security of a corporate job? That doesn't exist in this age of cost-cutting and the whims of management. You can get lower cost insurance by joining some associations that offer it for independent folks...or latch on to your spouses' plan if possible. I've been on my own for 20 years with no regrets for the freedom it brings.
Here is a lovely infographic - http://bit.ly/1KFp3Qj
There are many pro and cons. Its not easy to venture out alone in the unknown.
None the less, if you have talent, have experience of sales and reaching out to clients you can make it out there. Lots of online places to find clients and project, i would certainly advice you to grow locally aswell. Try to get your brand name or identity out in the market and grow.
Certainly being your own boss is great but in my opinion its more than that. It comes with its own unique set of problems.
I'd say, take a few side projects along with your job, a few clients at the beginning will help with the transition. :)
If you have to be the sole support of your family, with benefits and insurance, stay with your job unless you are certain you will have enough clients. If, on the other hand, your wife works, and you can put the family on her insurance plan, the freedom of doing your own thing is SUPER! Not being tied to an artificial schedule totally rocks. For me, it's all about the time.
Being a freelancer has its advantages and disadvantages, but as you can see below, many experts here believe freelancing is a worth the risk of potential downsides. The Business.com team recently published an article that covers the main benefits: https://www.business.com/articles/benefits-of-freelancing/
The greatest advantage is the flexibility of creating your own schedule and being your own boss. The disadvantage is there is no one to hold you accountable but yourself. Freelancing is not for you unless you are a self-starter. As a freelancer, you'll be handling every aspect of the business - administrative duties, bookkeeping, client development, and marketing. You'll need to remain disciplined and focused to reap the benefits. Good luck!
Hi Daniel, there are 4 very very very important things to consider:
1) are you a good rainmaker - in other words, how do you feel about having to land your own accounts? This is an extremely important question, because, just like Congressmen need to spend a good part of their time fundraising, any startup business owner needs to spend a serious percentage of time marketing and selling (even when they are busy with current work). Otherwise, there will be no ongoing business.
2) what would the cost be to replicate all your benefits? Don't forget disability insurance - in addition to the life and health insurance you may have. You can get this information from an insurance agent who works with business owners (NOT a P&C shop - a life/health agent). Oh, and two others: paid vacations (if you want to take vacations as a business owner, you much have the cash flow to finance them, and a system to keep people happy when you aren't available to them), and the other half of your FICA taxes that are is now paid by your employer. Also keep in mind that, as an employee, you have the benefit of unemployment benefits - you will likely not have that when self-employed (unless you are a corporation and pay the premiums).
3) if you are not SURE that you would love ALL the upsides AND DOWNSIDES of 'being your own boss', and the benefits aren't absolutely seductive to you, proceed to self-employment with caution.
4) if your family doesn't want you to leave your job, realize that their lack of support may be a big problem. Especially when you have a rocky week - or month - or, dare I say it - year. Self-employment is not for the faint-of-heart. Be honest: can you weather the criticism your family (especially a spouse) may give you?
Hope this helps.
"The Business Quarterback"
I became freelancer because my job was eliminated and I need to keep my skills sharp.
Being on your own does have it advantages because the only person you have to answer to is yourself at the end of the day. (Granted it is your clients who pay you.)
Yes, the benefits from being in the corporate world are worth a lot at the end of the day.
I would recommend if you are considering it to do your research so that you have the correct medical coverage for your family. Then ask yourself can you successfully market yourself to generate enough income to maintain your current lifestyle.
I have learned to make do with a lot less.
Been consulting/freelancing for over 15 years making a very good and growing income. I think for the right type of people there is more job security in being an entrepreneur/freelancer than there is at a corp job. If you are a self starter you should not be working a corp job these days. Build a business, big or small. You won't regret it.
In the beginning it can be challenging but once you have built your networks and gained a few clients to cover your base costs, it is much more secure. If you need to make $10k/month, I would suggest working towards getting 2 to 4 clients that will pay you $2500 or so. This way you don't keep all your eggs in one basket and if you lose one client than you only lose 1/4 of your income but you gain a 1/4 of your time back to find more clients.
As for benefits, you have to set all that up yourself for your business. Not hard to do, many insurance companies offer small business insurance.
Freelancers have the ability to accept or reject clients at will, though you certainly don't want to go overboard in rejecting clients...
If you like trying to pry money out of deadbeat clients that refuse to pay for work you did to their specifications and then went through 13 rounds of changes because they never really gave you guidance, this will be the best thing you could ever do. If you don't want to die of a heart attack or poverty, and if you don't like waking up in the morning angry because you were arguing with the client in your dreams, seek another path.
Freelancer means you are self-employed. You have the advantage of picking your projects and the problem of finding enough work. If you are successful, you may make more money than you did as an employee because you have less overhead and do not share the fees generated from it.
Like most self-employed people and business owners, you will work longer hours than you might have as an employee. You do however get to control wtih whom you decide to work. Absent a unique area of expertise, skill or a huge positive reputation, you will have all the same struggles of a solo practioner.
It is a matter of personal preference and whether you like the risk of being self-employed or if you have a choice. The older one gets the more difficult to get employed.
The best way to start your own business (or become a freelancer) is to identify the problem and to come up with the solution. It looks that you already possess the skills and there is a need which you can fulfill.
You will benefit by gaining a freedom to set your own schedule and be your own boss. It is hard to put a price tag on this one.
Being a self-employed will enable you to qualify for a Solo 401k plan, which is designed specifically for small business owners and entrepreneurs. This is a great retirement savings vehicle not only because it can be self-directed and will allow you to invest in alternative assets such as real estate, trust deeds and more, but it also offers great tax benefits – with it you can shelter up to $59,000 per year from taxes! Learn more about it here:
Your income level can be unlimited if you have the right business idea and work at it.
You get to work from home, pick your jobs, meet new people, make some money and be free, which I find very satisfying.
Obviously the freedom to set your own hours, choose who you work with and stop exchanging your hours for dollars to help someone else achieve his/her dream are top benefits.
However you must be disciplined, resilient and comfortable not having a predictable income at least for some time to be successful as a freelancer. I always recommend learning how to set up your "dream job' while still working at your "day job" and then gradually slide into the second stream of income and new business you have created.
People do it every day. Yes, you will be very busy working two "jobs" but it's like raising two children...you adapt ( and you don't eliminate one to focus on the other until one is more independent and needs less of your attention).
Coming from a corporate agency, you might already realize the time growing a business can take and yet, I seldom meet anyone who doesn't think the time they juggled both was worth
I recommend reading Jon Acuff's book, QUITTER. It's an easy read and is personal story about doing exactly what you are asking about.
( On a side note, Jon is still an entrepreneur, but what he originally went after did not have the silver lining he expected and he left that first venture )Working for Dave Ramsey)
Freedom, you can take on any work that interests you and you work on a "perform or persih" basis, scary at 1st but then you realise every business owner operates on the same basis.
Money. Lot of money. Your bosses at the corporation have several problems. They not only have to feed their family, they have to feed your family. Self esteem is the key. And of course the clear sight at your opportunities and tools to make money.
I like freelance work. I never had a problem with the fact that my previous employers billed 4+ times my pay. I didn't like it, but I can understand it. I really felt like the biggest advantage was that I could fail on my own. I always felt stifled in the corporate setting. Dealing with the 'we've always done it this way' crowd is not appealing to me. I feel like I can finely tune my craft by being experimental and pushing my limits outside of the corporate setting.
I also appreciate the ability to chose my projects. I have worked on many projects that I objected to, but it's the job so I did it. Now I can chose to ignore those bids asking for $7/hr for a Facebook clone.
If you are concerned about the security, consider freelancing on top of a regular job. If you can manage the time you will gather some capital over the next few years that will afford you the luxury of leaving the regular job. Also, it allows you to make valuable contacts.