You’ve worked for someone else for many years and now you want to become a freelance consultant?
You want more freedom in your life. Freedom from a boss, allocated working hours and the freedom to pick and choose the work you do and the people you work with.
Freelance consultancy can provide all this and more if you’re willing to work for it. While freelance consultancy provides freedom it also demands more individual personal responsibility.
In most cases to become a freelance consultant is not easy. It takes a certain kind of person to move from a more ‘safe’ full-time employment job to an ‘unsafe’ freelance consultant.
I use quotation marks here because most people perceive a full-time job as safe. In reality it’s not. A full-time role can be taken from you at any time.
When you work freelance no job is permanent. You have to create and feed a work pipeline so when one job finishes you can replace it with another.
Freelance consultancy can be both stressful and rewarding. Since 2008 I have worked as a freelance consultant. It has allowed me to travel, earn a little money, take time out to pursue other interests and ultimately it has given me greater control over my life.
It is a life not for everyone however so you need to understand what it entails and if it’s for you.
Becoming a freelance consultant has many benefits but there are downsides too.
Benefits to becoming a freelance consultant
You’re your own boss
If you dislike authority then having a boss is problematic. When you’re a freelance consultant means most decisions are down to you. That’s not to say you don’t have to answer to anyone. You will always have demanding clients that need your attention. But you won’t have anyone in direct authority over you.
There is the potential to make more money as a freelance consultant
Not always but as a freelance consultant your overheads are much smaller than a corporate company allowing you to charge a lower hourly rate. Larger companies have more expenses including office rent, salaries, insurance and so on. If you’re working from home then yours are minimal.
There are also tax incentives to becoming a freelance consultant and you will pay less tax than you would as a full-time employee.
That is a fact and many freelance consultants believe it’s a perk and a right because of the greater risk involved.
You can decline work you don’t want
If you work in a client-facing role there will be times when you have to work with certain companies and individuals that you would prefer not to.
When you work for yourself you can decline this type of work. If work is scarce and you’re desperate you can’t do this. But if your pipeline is healthy and you do not need the work then you have the freedom to decline. This is what being in control of your work life is about.
You can work when you like
If flexibility is a priority for you then becoming a freelance consultant means you’re in control of your working times.
For some reason during the hours of 10pm to 4am I’m at my most productive. It’s to do with my genetics. For a long time I worked these hours from my home and granted it wasn’t good for my social life but my work productivity went through the roof.
Very few employers would allow me to work these hours which is understandable. But maybe you prefer to work on the weekends as you’re pursuing a hobby during the week. That is entirely feasible when you work for yourself.
You can work where you like
In the mobile age it’s possible to work from any part of the world provided you have power and the internet. I’ve invoiced clients from dingy Cambodian internet cafes while travelling through Southeast Asia. I’ve done Skype from to Ibiza to London.
This is not always possible. Some clients still want regular face-to-face meetings. Others need you to work from their office three days a week. It works on a case-by-case basis but when the opportunity arises for you to work from anywhere you like take it.
If you hate the city but that’s where the bulk of your work comes from then move to the suburbs and venture only when you need to.
Downsides of becoming a freelance consultant
It’s all on you
You’re the boss but you’re also the secretary, janitor, teaboy, sales, accounts team and so on. When you work for yourself
When you work for yourself everything is down to you from winning new work to the delivery of a project. If your sole aim is to be a one-man-band then you are responsible for everything.
Some people prefer it this way whereas others prefer to be around in a team. If you’re in the latter camp then you have two options. Go back to work for someone else or build a team yourself.
Don’t expect to be paid on time
When you work for a company there’s a guarantee that your salary will be in your bank account every month. In freelance consultancy there is no such guarantee.
I’ve spent considerable time chasing both account departments and business owners for money owed. It can be stressful as the months pass, especially if cash flow is low.
Most of the time you’re at the back of the pecking order when it comes to being paid from clients. They will pay their most important creditors first. Employees first then they work their way down from there.
If you think a client is going to pay you within the month 50 percent of the time you’ll be mistaken. Expect to make some awkward phone calls when it comes to chasing money you’re owed.
It can get lonely
If you don’t enjoy spending a lot of time by yourself the self-employment is not for you. The first year will be the loneliest as you will spend a lot of time on your own. Over time this may change as you begin to work with more clients.
Whichever way you look at it self-employment is a lonely endeavour. There will be times when you may feel you haven’t spoken to anyone in days.
If this sounds terrible to you don’t bother leaving the day job.
Your skills could get rusty
If you work in an industry that changes either due to technology or policy then over time you may become rusty.
When you work for you sometimes you won’t interact with peers as much as you would if you were working in a big office. Knowledge sharing is important for professional development. While you might rely on social networks for industry news this doesn’t compare to real interaction.
I had a four-year stint of working only with my own clients. I realised I was getting rusty so decided to freelance in a London agency. My suspicions were confirmed when I found that four years of working on my own had caused me to fall behind in certain practice areas.
Moving back into full-time employment may prove difficult
Let’s say you’ve been a freelance consultant for three years. You’ve earned a little money, used your free time off wisely, got in shape and you’re generally healthier and happier. You don’t have a huge amount of clients but you earn enough to do everything you want to do in life.
Things are getting stale so you want a new challenge. You decide you want to go back to working for a corporate company. When you’re interviewed you get the impression they feel that you’ve coasted these last three years. This could impact you getting the job.
It’s also a difficult transition to move back into full-time employment. You have to work to normal office hours and there are clients you dislike working with. You’ve tasted freedom in freelance consultancy that the move might be too difficult. It can happen and I’ve been there.
Steps you need to take to become a freelance consultant
Those are the positives and negatives when considering freelance consultancy. All depend on your personal circumstances and where you’re currently at in your life.
If the positives outweigh the negatives and you’re certain that the freelance life is for you then read on.
Think long and hard about if this is what you want to do
I’ve seen people quit their jobs to go freelance and then six months later go back to full-time employment.
They took a chance which is commendable but if they gave it more consideration before quitting they may have never bothered. Or made more of a success of it.
Before handing in your notice at work you should give it some consideration. Think about the possible downsides to it. For example, if you feel lonely working on your own then chances are the freelance life won’t be for you.
Try to launch with at least one client
The most difficult part of becoming a freelance consultant is taking the initial leap. You can suppress the anxiety if you’re earning money on your first week of freelance.
If possible you should try to launch with at least one client onboard that is taking up 25 – 50 percent of your time. That way you’ll have a lot of time spare to network and win new business while at the same time having money coming in to pay the bills.
When I made the leap to freelance I was lucky as my employer retained me as a consultant. This alleviated a lot of money worries and allowed me to build a pipeline without worrying too much about money.
Rainy day money is important
Having money as a backup in case something goes wrong will give you more peace of mind. You might have an accident, fall sick or a client could fall through. Having a little money as a backup will protect you against unforeseen circumstances.
You want savings that could cover you for three to six months. Six months might be a stretch since you should have confidence in your abilities to find new work within that period of time. Three months at the very least is advisable.
Besides, you should have rainy day money even if you’re not self-employed. It’s common sense.
Keep your overheads low
One of the biggest expenses you can have as a business (which is what you are) is office rental. When you’re working as a lone freelance consultant you don’t need to rent an office or even a desk.
You should work from home and from coffee shops at the beginning. When you’re making good money rent a desk so you can separate home from work but not when you’re starting out.
Likewise, if you can reduce the cost of anything do so. Do you need to buy a Macbook Pro when a cheaper Windows machine will do? Do you have to have a work phone and personal phone? Do you need business cards Patrick Bateman style when Moo.com will suffice?
Create and maintain a network
In business people buy from people. That’s why you should be front of people’s minds when they need to hire people like you.
Networking is key. This includes attending events, face-to-face meetings or using online social networks.
Better yet, become a thought leader in your space and attract potential clients to you. This requires more effort (both in time and your expertise) but it can pay off dividends. Thought leaders can charge high premiums for their services because in clients’ minds they are an industry VIP.
If becoming a thought leader is not your thing then network hard. You’ll be surprised at how many acquaintances you make and how putting in the groundwork now will serve you later.
Differentiating yourself from competitors will allow you to be seen among the herd. Don’t do it in a gimmicky way. Those cartoon caricatures that some have plastered across their website are childish.
Differentiate yourself by specialising in a particular area. We are in the digital age and it is impacting every industry. Becoming a digital consultant will allow you to ride this wave. Or you can focus on a specific industry. If you’re passionate about cars then a good place to niche yourself is the auto industry.
Find a way to differentiate yourself from the masses of other freelance consultants who are like you. Focus on the niche and you will command higher fees.
Take advantage of the perks of freelance life
This is the most important point I want to leave you with. Becoming a freelance consultant is about empowering yourself to make more life decisions.
The world is big and beautiful. Thanks to the internet we have vasts amount of information at our fingertips. We have so many opportunities to travel and we have so many opportunities to learn and develop new skills.
Some get wrapped up in their work and they fail to remember that earning money is a means to an end. It’s about making enough to live fully and do what you want in life.
If your first year of freelance consultancy has been a success then take the time out to enjoy the fruits of your labour. Relax, travel, read, spend time with friends and family. Whatever appeals to you most.
Freelance consultancy is a lifestyle choice. It can help you tick off important things you want to do in your life. It can free up your time so you can develop new skills and knowledge to become a more rounded and experienced individual.
Take a leap of faith and do it. Good luck.