On September the 1st I celebrated the first anniversary of making the switch to full-time self-employment. (I survived, yay!)
I'd love to write about what I did right, and how I started earning 6 figures within 6 months, but my reality is a lot more down to Earth.
Truth be told, I find it really funny to read all the advice "how to transition into freelancing" now, because I broke pretty much every single rule along the way. And this made it more difficult than it had to be.
If I could go back, I'd try to make it easier on myself. I'd try to do whatever I could to prioritize financial security and maintaining my sanity, instead of throwing myself into the whirlpool and just hoping things would work out.
So if you're still in your day job, here's a heads-up on what not to do, and what to do instead.
(If you're already self-employed, you can nod in agreement, or feel smug because you were smarter than me. Either is fine!)
1. I didn't control my timing
This is a nicer way of saying I technically got the boot.
Although I've been thinking about going freelancing full-time for a long time, I kept postponing it as long as I could. And then one day I couldn't postpone it anymore.
The start-up I worked at had financial troubles, and they stopped renewing people's contracts. I knew I would be leaving 3 months in advance, so I had some time to prepare, and even to look for another job if I wanted to.
As much as I was grateful that things worked out this way when I was too scared to do it on my own, it wasn't exactly a walk in the park.
What to do
Of course, if you get laid off, then there's no other thing to do but learn to swim in the conditions you're thrown into. But if you do have a choice, don't be afraid to use it.
Make an informed decision on when you will leave your job. By informed, I mean that this decision should ideally come when you're sure you've taken care of the other things I mention in this post, especially clients roster and savings.
Thinking about leaving your job? TIP: Control your timing (+ 4 more tips)... [Tweet this!]
Speaking of savings...
2. I had no savings
Yikes. Starting your own business with a literal zero in your bank account is scary. Only slightly less scary than starting with a debt.
The main reason I didn't have savings is that my pay was always a few months late, on average (sadly, that's pretty normal in my country), and since I was trusting the money to come in soon, I was still spending on things I considered important: computer equipment, a new easel, courses, books etc.
I've made the mistake to "save" what was left after I've covered all my expenses (and often there was nothing left), instead of the proper way which is to put aside some money before you even start spending.
I assumed that on the day I leave my job, I will get all my late paychecks at once, which would cover for around 5-6 months of living expenses (not bad!). It didn't happen. The money was slowly trickling in over the course of 3 months, and I never knew when it would come and how much, so I was stressing the entire time.
I had to take on a client that was totally not the right fit because I was desperate.
My plan with the savings was to focus on the kind of work I wanted to do and build a better portfolio, but I didn't have enough breathing room to do that.
When I finally did get a bigger lump of money at once, I started saving 10% of my income before I even spent a dime. After several months of doing this it's still not a lot, but at least I'm not in the panic mode anymore, because I know I can survive a month or two, even if I had zero clients.
What to do
I would advise that you start saving 10% of your income while you're still in your job. If you have any debt, make paying it off a priority.
Thinking about leaving your job? Save your sanity by saving money! (+ 4 more tips)... [Tweet this!]
If this means eating out less, buying less clothes, and postponing buying that new gadget you're dreaming of, do it. Unless the gadget is somehow making you money (ie. your computer is so old it takes you more time to do your work) — then it may be smart to invest in one because it will pay off.
There's one thing I was doing well all this time, and this is keeping an eye on my income and expenses. Every single dollar (or euro, or kuna) spent is accounted for in my budget spreadsheet.
I know exactly how much I spend on utilities, food, clothes, eating out, drinks, concert tickets, transport etc., and I've kept these logs since I first moved out on my own back in 2010.
The benefit of having this data is that you can make realistic saving and budgeting decisions, because you know how much you need for surviving, and where you can save money.
It would be too long to go into details of how this works in this post, but if you want to know more let me know in the comments, and I'll put it on my list.
3. I took a break from freelancing in the months leading to my self-employment
For the first 6 months of 2013 I was freelancing alongside of my job on several projects at once (plus handling my personal projects). I got severely burnt out, and I needed to take the summer off freelancing to recover. I got offered some gigs, but I turned them all down and relaxed as much as I could.
Of course, if I had just gone on working, I'd be half dead by the end of the summer, and I'm glad I didn't do that. But still, if you have a say in how and when you leave your job, make sure there's some overlap.
Starting off with zero clients and zero income is not only depressing, but those clients you turned down may have had referred their friends to you.
What to do
Prepare for the long term. Don't take on too many projects at once. Set a limit of how much you can do and don't go over it, no matter how appealing it may seem.
If you need to take time off, make it no more than a month so you can still have a chance to catch the people who reach out to you.
And of course, make sure you don't get burned out. This may mean taking only one client at the time while you're still in your job, and letting other folks know that there's a bit of a wait to work with you.
Want to leave your job? Don't let burnout sabotage your new business (+ 4 more tips)... [Tweet this!]
Don't try to accommodate everyone, because it's just not worth the price you'll pay later.
4. I didn't prepare for more passive income
I have some venues where I earn money on the side selling stock graphics, commercial licenses for Photoshop brushes and art prints. It's not much really, but every couple of weeks I get a little something that makes my day brighter.
My plan was to create more ThemeForest themes and more stock graphics, plus self-publish an eBook, so I could earn a more significant amount of money from digital products.
Because I have a hard time getting myself to commit to a single project for long enough to see it through, it didn't happen.
Right now I'm putting out fires with my clients and projects that have a deadline, so I'm not prioritizing products.
What to do
There's no better time to work on your digital products than when you're in a job. The job will get done, expenses will get paid, and in your spare time you can do whatever you want. So if you're able to, package your knowledge and start selling it.
Still stuck in a job? There's no better time to work on passive income (+ 4 more tips)... [Tweet this!]
It will take time to get traction, but it's a start.
5. I didn't take advantage of my professional relationships
I'm not going to say this was necessarily a bad thing, because I did this consciously.
After I left my last job, I told a friend "I don't ever want to do another white-and-blue travel site!"
I was so jaded with travel-themed websites (which was the majority of my work back then), that I really wanted a break from it all. My ideal client profile is quite different from what I used to do in my jobs. In fact, that was the main reason why I wanted to have my own business in the first place.
As I grew weary of "boring" projects and clients from hell, the quality of my work stagnated for a long time. Design became "just a job", and in my free time I focused more on art & illustration. I lost interest in following new technologies, trends, design magazines etc.
It was only a few months ago that I regained my passion for design. I suppose I needed some time to get all that bad client ick out of my system for good.
Now I'm finally experimenting, taking chances and doing the things I'm happy with. I'm finally filling my portfolio with the sort of projects I'd want to do in the future.
But the result of my attitude is that I didn't get a single referral from my ex colleagues in the past year. I don't blame them, really. I'm not the right person for most of the projects they get to work on, whether it's in terms of style, skillset or values.
Luckily, my personal connections more than made up for it! (It's really neat when your friends are also your ideal clients.)
What to do
This may seem like it's only applicable for freelancers who were employed in the same industry, but it doesn't have to be.
Even if you're a former IT support technician that now sells knitted crafts, all the people you've met in your workplace might prove useful in some way or another. They may not be your perfect buyers, but they may know someone who is and refer them to you.
In any case, don't burn any bridges, unless you're absolutely certain you will never, ever want to see those people again.
Quick recap of lessons learned
- Plan when you're going to leave, and prepare well.
- Save money for at least 3-6 months of living expenses so you can sleep better and won't need to take on projects you really don't want to.
- As you're getting closer to your quitting date, keep the momentum of working on the side and make a waiting list if you're able to.
- If you know something that can be packaged and sold (whether it's art licensing or a tutorial), do it while you're still in the job. You'll be "too busy" to do it later.
- Use your professional relationships, even if you're transitioning to a different industry.
If you enjoyed these tips, please share them with others who might need them:
Thinking about leaving your job? Avoid these 5 mistakes! [Tweet this!]
Over to you
How did you transition into self-employment? What advice would you give to your former self?
Or if you're currently thinking about quitting your job, what questions do you have about transitioning?
Let me know in the comments!