Imagine a writing job where you get to choose when, where and with whom you work.
You have the freedom pick your projects, and any money you earn goes right into your own pocket, because you’re the boss.
Of course, such a job does exist: Being a freelance writer gives you all of these advantages, and it’s easy to understand why two-thirds of U.S. writers are self-employed.
With so many companies relying on a contingent creative workforce, many professional writers dream of leaving corporate life behind and becoming a full-time freelancer. It’s an admirable and achievable goal — one that I actually have myself — but don’t fool yourself into thinking you’ll immediately start raking in the freelance money upon resigning.
You’re ultimately running a business, and there are a lot of factors to consider beyond just writing and getting paid for it.
If you want to start a freelance business, it’s wise to give yourself as much of a head-start as possible before you quit your corporate job.
Here are four important steps to take while you’re still employed to get ready for a professional freelance writing career.
1. Start freelancing in your spare time
If you’ve never freelanced before, the time to start is while you still have steady income from another job.
You don’t want to give up your paycheck only to find that no clients want to work with you because you’re too inexperienced.
Some of them may even develop into longer-term gigs that you can continue to do on the side of your regular job. Just be sure to check your employment contract and make sure you’re not accidentally working for a competitor or breaching any employee agreements by freelancing.
Remember, freelance work isn’t always stable or guaranteed, so you’ll need to continually work on client relations even after you’re self-employed.
2. Keep meticulous income records
Many first-time freelancers find themselves rudely awakened when they file their taxes for the year.
Unlike your regular employer paychecks, no taxes are taken out when you receive freelance payments, so the IRS expects its cut of your earnings on April 15. CalcXML offers a great basic self-employment tax calculator so you can see what you’ll owe (plan to set aside about 20 percent of your freelance earnings for taxes).
If you’re not sure how miscellaneous income reporting works, the IRS breaks it down on its website.
Even if you’re not doing a lot of gig work right now, it’s still a good idea to track everything you’ve completed and earned from your freelance job(s) so you’ve got a complete picture of your financial situation. Keep an official log of your projects, clients and earnings. This might be in an Excel spreadsheet (or even a paper notebook) to start, but as you grow, you may want to invest in a formal invoicing system.
Getting into good habits now will make it easier when you have multiple clients and income streams as a full-time freelancer.
3. Calculate how much you’ll need to save to quit your job
No matter how tempting it might be to quit your 9-to-5 once you’ve got a few freelance clients, do not do it until you’re sure you have enough stored in the bank to tide you over.
You need to build up as much of a financial safety net as you can before you go full-time freelance.
Sit down with your bank statements and write down everything you spend in a month — yes, that includes those morning lattes and “treat yourself” purchases.
Build those non-essential items into your budget (you’ll thank yourself when an unexpected expense pops up!) and give yourself a bare minimum number that you need to be earning per month to cover rent, bills, groceries, going out, etc.
Don’t forget to account for things you may not be paying full-price for right now as an employee, such as income taxes, health insurance and retirement plan contributions.
From there, determine what you can reasonably charge your clients and how many projects you’ll need to complete each month to meet that number. It’s OK if your freelance earnings don’t even come close right now; you can grow your business over time and rely on your savings in the meantime.
Most entrepreneurs recommend saving six months’ worth of living expenses in case business is slow at first, but if you’re itching to get out and have a fairly steady client base, you might be able to survive with three or four months’ worth saved up.
4. Make a plan for scaling up
Once you know how much you need to earn with your freelance work, it’s time to figure out how to reach that financial goal.
Start researching websites and media outlets you think you might like to write for, and look into how much they pay their freelancers (if anything). If your current employer works with freelance writers and allows former staff to transition to freelance, that’s a great place to start. But budgets and assignment caps vary from site to site and policies can change at any time, so start thinking about how you’ll diversify your client base.
You might not have time to start writing for all these publications right away, but it never hurts to send out “feeler” emails to editors or current contributors, just to inquire about their process and get yourself on their radar for when the time comes.
Talking to other freelancers is also a great way to gauge current market rates for certain types of projects so you don’t over- or under-charge your clients.
You’ll also need to learn how to prioritize your potential assignments.
Some new freelancers think they should accept any and all assignments, even if it pays peanuts, just to build a portfolio (I see a lot of low-paying Upwork jobs with dozens of bids, for this reason).
But your time is incredibly valuable, especially once you’re on your own, and you need to spend it working on projects that offer a payout that’s worth the investment. It’s not worth it to work with a client who wants one 600-word article each week at $25 each, when another one will pay you $100 for that same 600 words.
Unfortunately, some people fall into freelance work by default after being laid off, and may not have much (or any) lead time to get ready for the leap.
If you are going freelance by choice, take advantage of your situation and do everything you can today to secure your self-employed future.
Do you plan to take your freelance writing full time? Tell us how you’re preparing in the comments below.