Questions to ask before starting your freelance career
Carrie Smith, writing on Time.com, offered five questions you should ask before quitting your day job to freelance full time.
How much should you save?
This depends on your overall situation, of course. Are your the primary wage-earner in a household? What do your expenses look like? How much business do you expect to generate in the first three months, six months and so forth?
Smith writes:
Most experts suggest that you keep at least three to six months’ worth of expenses in a separate savings account to cover any emergencies or losses of income (some even suggest as much as twelve months’ worth). As a freelancer you might as well double this amount to account for the added risk of being self-employed.
What is you bare minimum budget?
Look at your entire year and every anticipated or likely cost. Average that out over the 12 months to see how much income you must average to make a go of it — and how much money you should build up in your checking account to pay the business while you build business.
Smith writes:
Calculate how much money you need to adequately pay your bills every month, then multiply this figure by six to eight months. This is the amount you’ll need to save in a separate account to make the transition from a day job to freelancing a successful one.
Do you have any other income?
A related part-time job can ensure cash flow while you build business. Many freelancers also lead seminars for a fee or teach college courses as contract employees.
Smith writes:
One other way to make this process much easier is creating multiple streams of income. Aside from your core freelance duties, do you have other options for creating passive income? What other assets can you leverage to bring in more money each month?
Are you prepared to do what it takes to build business?
Building a vibrant freelance business can take a lot of time and effort. It is not an easy way out of the workaday world.
Smith writes:
How much time you spend in the beginning will determine how quickly you’re able to replace your day job’s income. There will likely be a lot of sleepless nights and stressful days, but in the end you have to determine if the reward is worth all the effort. Freedom is never free, and this includes financial freedom. You have to figure out if the cost is worth it.
What is your Plan B?
Be aware that succeeding as a full-time freelancer is not easy. The more money you set aside, the more time you have to make it. But what if you don’t make it?
Smith writes:
Create a plan of action for this specific event. List out the possible solutions and scenarios for how you and your family will deal with this. Are you going to find another full-time job? Will you be able to move back in with your parents?
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