There’s a dream that many of you might have, which is going freelance.
The truth though is that going freelance is scary and hard. You probably have responsibilities in life. Maybe you’re the only breadwinner in a family, or maybe you just need to cover your bills each month on your own.
But you’re tired of working for others, tired of helping someone else build towards their goal while you don’t share in the upside other than keeping your job.
You don’t know how to go out on your own though. I’ll be honest, when I was working a cush tech job I was scared to do it even though I wasn’t happy at my job.
Today I am going to talk about three things that you need to have in place before going out on your own.
Hopefully you don’t get laid off like I did and have to scramble to put these in place, but even if you do you can still use this framework to succeed.
First, before you leave your job you need to have a large percentage of your salary replaced with your side consulting work. I recommend aiming for at least 50% and ideally closer to 70%. You’re going to be working a lot of hours between side work and your FT job, but this isn’t forever. You need to have a good base of income set before you leave so that you don’t freak out and just go take another job because you are scared.
Second, have a strong pipeline of potential work. You already have 50-70% of your income covered, and you should have a clear eye towards signing the rest of that soon after you leave your job. Now, there are no guarantees in life (other than death, taxes, and that everything will be more expensive than you think it will be) but this will set you up strong to succeed. I recommend having multiple channels through which you get work – referrals from peers, your own marketing, maybe even your old agency. I know some people who left an agency but that agency kept paying them, on their new rate no less, to manage the same clients. They literally made more working for themselves for the same work.
Third, build yourself a cash buffer. I know it can be hard to build a cash buffer these days even in the best of circumstances, but if you want to give freelancing/consulting on your own a go then you need to have at least 3 and ideally more like 6 months of cash built up to cover your expenses. Basically think of this is your paycheck for the next period of time.
Reality is you probably won’t need to use it since you have 50-70% of your paycheck covered already by the time you resign, but having that buffer is awesome.
There are a lot of people out there who tell you to just take a jump and burn the boats when going out on your own. I believe that going to work for yourself should be a step, not a leap. Set yourself up for success.
So to recap, if you are thinking about going out on your own but are not sure how to you should:
- Replace at least 50%, and ideally at least 70%, of your income with side work before leaving your job.
- Have a strong pipeline of potential work from multiple sources, like referrals from friends, agencies, and your own marketing;
- Build yourself a cash buffer of 3-6 mo before leaving your job. This buys you the time you need to really see if you’re happy and can succeed.
I hope this was helpful to you.
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