What to expect when transitioning from full-time to freelance

So, you've grown tired of the 9-5.

Perhaps you'd like more control over your hours, more creative freedom, or the ability to be your own boss. There's a great new world awaiting you with more freedom and flexibility.

Luckily these days it's very common to go freelance, and it's not considered the big risk it was 20 years ago. Life as a freelancer is attractive. It's not surprising more people are escaping to go that way. It's expected that 50% of the workforce will be freelance by 2026. But there's a few things to consider before taking the leap.

Setting up

Becoming your own boss can have all kinds of benefits, but it's not as easy as you might think. You may feel overwhelmed to begin with as it takes a lot more hustle than being an employee. There's no one there to hold you accountable and keep you motivated, and it can be less financially stable than having a regular job.

To get started, carve out your path. What do you want freelance life to look like for you? What skills or expertise can you offer people? Answering these two simple questions can help provide you with a lot of direction as a freelancer and give you clarity.

Next, get clear on your 'why'. What matters to you may have changed since entering employment. Do you want more work-life balance, creative control or impact? To figure out your why, ask yourself:

1. What in your life is making you happy/unhappy right now?
2. Why do you want to go freelance? (Ask yourself this one a few times!)
3. What does your definition of success look like?

It's also a good idea to think about your financial, emotional, intellectual and environmental needs. You can use our Needs Calculator to do this.

Having a clear understanding of how you like to work, and what matters to you is crucial before you step out of stable employment. Of course, once you have a clear idea of these and still want to move forward, you can use them to inform and develop your personal brand. 

Preparation

Before taking the leap, you'll need to get really clear about what you're going to offer. Do you already have an idea of what you want to do? Something you’re currently doing full-time, but as a freelancer? Something totally new? Getting clear about what you want to do and offer as a freelancer is crucial.

Start by listing your existing skills, knowledge and experience. What challenges have you overcome? What parts of your work history have really excited you? Perhaps there is a unique blend of skills that you can combine to help you to stand out? Write out 5 things you could offer as a freelancer.

Next, understand your market. Consider how valuable your skills are to the clients you’re targeting. What do they want, and what are their worries or their dreams? What kind of competition is there; how can you make sure you stand out? Look at your list of 5 things you could offer as a freelancer, how in demand are these? If you’ve identified a location and your work would be in person, is there an abundance of opportunity in your chosen base? If you plan to be totally remote, how will you find clients? What’s the competition like?

How can you balance your existing skills against your ‘bigger picture’ needs and priorities? Setting limitations around what you can and are willing to do for money will help identify your values and keep you focused on what matters to you most. They’re also key if you want to tailor your brand.

Looking at your list of 5 potential freelance options, which feel most aligned with your needs? Which do you get most excited about? Which would provide the greatest opportunity for the quality of life you’re looking for?

Getting the essentials in order: consolidate your finances, networks, plans.

Reach out to people you know and have a professional relationship with, and update them on your plans. Even if they don’t need the business or services right now, they may know someone who does and be able to offer a recommendation. Play it smart and you may be able to set up a couple of clients while you’re still in your full-time role – even picking up a pro bono project can be a bridge to greater things.

Building relevant skills: what’s missing in your skillset?

You’ve already had a look at where your skills can take you, but can you take your existing expertise a step further? It’s wise to diversify your offering, but investing in an evening class to boost your skillset now will pay dividends once you’ve left your regular job and are deep in the freelance life. 

Find a routine: designing a new working pattern for yourself.

Looking at what’s working and not working in your existing routine can help fuel the habits you would like to bring into freelance life with you.

Maybe you want extra time to go for a run in the mornings, or you’ve found you are really not a morning person at all. Perhaps you need to track exactly how long a particular task may take so you can microschedule your day. Do you know how dependent your productivity levels are on the time of day?

Try to work these out sooner rather than later if you can, so you can ease into a new work routine easily when you take the leap. 

Future-proof your finances

It’s perfectly normal for new freelancers to worry about money. Irregular income can be difficult to manage when you’re not used to it, and it’s recommended that people save a buffer of at least £3,000 before they quit their jobs to keep the pressure off (though you may need less – or more).

Practising living with a reduced budget to reflect the salary you think you’ll start with will help lessen any blow that comes your way, but can also pave the way for some nice surprises financially when (not if!) you have a good month.

Remember: you’re making a radical change to your life. Prepare now, making sure all your tools and resources are as sharp as they can be, and you’ll transition to freelance life more effortlessly – ready to hook your first clients.

Ok, so now you're ready to go.

Finding clients

There are three steps to putting yourself out there when you go freelance:

1. Getting your branding right.

2. Figuring out your pricing.

3. Marketing yourself and your services.

Personal branding is key to help you reinforce the message of what you do and how you do it. You can read about it in more detail in our article with tips to help you stand out.

In regards to pricing, you’re going to have to get used to talking about money around people, so best just to be transparent – if nothing else, it will win you respect from the get go. 

What is absolutely essential when seeking clients in a new place is making yourself visible. Put simply, if you don’t market your services, nobody is going to know they exist! Invest some time into presenting yourself through online platforms such as LinkedIn, utilising your existing contacts, and engaging with the local community. Not many guides would advocate a trip to the pub, but consider this a solid networking endorsement.

Getting a few gigs under your belt before your move will help stabilise your position while you adjust to a change of pace. Reach out to old employers, set up on freelance sites such as Upwork and Fiverr, and join Facebook communities (i.e. Freelance Heroes) or LinkedIn discussions. Then you can get a better idea of your financial starting point and take it from there.

Reach out to local coworking spaces, attend meetups both in person and online, and share your story with people you meet. Identify companies in your locale who you think you can help, reach out and set up some conversations. An authentic freelance life is about sharing what you can do and being confident in your abilities and value. There's an abundance of opportunities for the brave. It takes practice, but you can do it! 

There are 3 main types of clients, and having a mix of them is the best way to have a fruitful portfolio of clients.

1. Long-term relationships which should be core to your portfolio. Once you've got a couple of these, set clear boundaries so that you have time for other clients.
2. Profitable opportunities. You may need to adjust your pricing for these but can add a great stability to your career portfolio.
3. Short-term projects. These should only account for a small portion of your portfolio as they're more volatile and time-consuming to find.

Just like we don't always like everyone we work with, we may not always gel well with clients. Don't be afraid to turn business down if you don't think it will go well for either partners.

Be prepared for things that could go wrong and you can avoid easy mistakes. As projects evolve, clients may well ask for more from you. Be sure to get everything in writing when quoting for projects. If clients ask for something outside of your original quote, let them know how much it will cost.

Finances

One of the greatest concerns around transitioning from full-time work to freelancing is finance. How can you guarantee a certain salary each month when you don’t know where the money’s coming from? This is what your client portfolio is for – but building this is only half the battle.

In our Going Freelance webinar, founder of Pachira Money and escape Programme Leader Stacey Lowman game the following tips for ensuring you’re asking yourself the right freelance questions:

Are you...

• Committing to regular financial reviews?
• Owning your own schedule?
• Feeling comfortable talking about money?
• Adopting good personal finance habits?
• Setting up the right bank account?
• Taking care of Tax, National Insurance and VAT?

As a new freelancer, you should mark your journey by first setting up self-employed status with the HMRC, opening a business account (Starling, Monzo and Coconut are great for tracking business expenses) and completing an audit of your accounts. What are you earning/spending? Do you have a buffer? How long will that last?

Try setting achievable goals and actioning them by spending less and saving more. The next step is planning what your basic business model looks like – how you’re actually going to get this money to come in. 

Inevitably there will be times when you are very productive, and times when there isn't so much work for you to do. It's a rollercoaster, so be prepared to save for a few rainy days.

It's also worth baring in mind that clients may not pay on time. Be sure to have payment terms clearly stated on your invoices, and don't be afraid to remind people when they're late on payment. For larger projects, you could consider asking for a deposit upfront to help fund the project as you go.

Setting your prices

As a salaried professional, it’s likely you didn’t put much thought into what a single day’s task was worth. You simply show up for your allotted hours, complete the day’s tasks, and get a nice little packet at the end of the month. However, with client work, every task or hour spent on that project is billable, and you have to work out how to put a price on it.

Finance is incredibly personal, and a rule that works for one may not work for somebody else. It’s therefore important to test different models to see which one works best for you. First you want to determine your reference points. Are they: 

• Cost-based: cover ALL costs plus a markup percentage
• Market-based: use competitor prices/community/organisations as a benchmark
• Values-based: how much it's worth to the client

Then work out your fee. Would hourly or day rates work? What about a per-project fee, or unit/quantity pricing?

If you’re unsure of your basic hourly rate, it should equate to the total of your last annual salary, plus your expenses and annual profit, divided by your billable work hours for the year. If this is a larger number than you’re used to working with, remember you’re not getting holiday or sick pay included, which should be accommodated by the pay increase.

It could be that different methods work for different clients, so don’t be afraid to switch it up – but always be transparent. Once you’ve polished one stream of revenue, you may want to look at expanding.

Ready to get started? Some final words of advice

We hope you're feeling more prepared for securing clients, working flexibly, and diving into the world of freelance. Your path is set, your priorities front of mind, and you’re raring to go – the only thing that’s left is to jump in.

If your first foray doesn’t quite work out, or you find it takes some time to get going, fear not! Going freelance is all about creating your own routine between work and home, and finding a sense of peace through freedom and flexibility. That said, it is full of stops and starts, and ups and downs, and it’s important to prepare yourself for fluctuations in work load. By following these processes, you should be able to better safeguard your earnings against changes in the tide, and know that whatever happens you already have all the skills you need.

Going freelance means taking a huge chance on yourself, so be prepared to feel closer to the authentic you as you manouevre this process. Avoid the isolation that freelance life can bring with support from a strong community of like minded souls – both in coworking spaces and online. And, most importantly, have fun! Freelancing is often about experimentation, doing something different, and doing it well.