Have you ever considered starting your own freelancing business? When making the decision of whether or not to start freelancing, it is important to consider both the advantages and disadvantages of this type of work.
Although many people enjoy the security, camaraderie, and benefits of having a 9-5 job, many people crave the freedom, spontaneity, and unlimited possibilities that accompany freelance work. To some, 9-5 work can feel repetitive and mundane. To these people, freelance work can provide an escape to this monotony, as it affords the opportunity to take on a variety of roles, ranging from sales and administration to creative work. Additionally, freelancing allows you to directly interact with and serve your clients, which can enhance the fulfillment that accompanies your work.
When asked what the best part of running your own business is, freelancers often point to the fact that you are your own boss. When you work for yourself, you have full autonomy. If you want to work from the beach in Hawaii for an entire month, this is completely up to you. Many people view this type of freedom as a luxury. In typical 9-5 work, there is an established corporate hierarchy, where there are people above and below you. When there are people above you, this means that they technically have authority over you and that you must answer to them. This translates to someone who has a say in how, when, and where you accomplish your work. Also, these managers are also responsible for judging your performance. When you decide to freelance, you have no one to answer to, except your clients and vendors. Recently, another freelancer was speaking about why they freelance, and their answer was simple: “2:30pm naps”. When you work for yourself from home and you do not have a boss to answer to, the only person you have to ask for permission is yourself.
Another major perk of freelancing is that you can decide who you do and do not want to work with. If there are clients that simply do not align with you or your style of business, you can simply say no to them. On the flip side, you have the ability to tailor your business to serve the exact type of clients that you want to serve. If you want to work exclusively with boutique restaurants that are located in Europe, you have all the power to do so.The opportunity to work with clients that you have a passion for serving is a luxury that helps freelancers to wake up excited to work in the morning.
If you hear freelancers talk about some of the reasons they have for starting their own business, one of the main things you will hear is flexibility. It is a fact that life can get hectic sometimes. During these hectic times, it can be nice to scale down your workload and recharge a bit. This ability to adjust your workload can be a huge factor in maintaining a work-life balance that works for you.
Since the pandemic, remote work has surged in popularity. However, as companies call employees back to the office, the option to work remotely is being taken away from some. As a freelancer, working remotely is a privilege that cannot be taken away. You do not have to set aside several hours a week for commuting to and from work. Running your own business allows you to have clients across the globe, while being able to work and live anywhere you please.
The earning potential of freelancing is unlimited. Unrestricted by an annual salary, your earning potential is infinite. One of the huge benefits of freelancing is being able to set your own prices. As long as there are clients willing to pay your prices, being able to set your own prices can set you up for financial success. For example, a freelance web designer who used to make $75,000 per year, could make that same salary with the signing of five $15,000 projects. As a freelancer, you are paid for how much your clients value your services. This means the more value you provide, the more you can make. This type of system incentivizes you to figure out the best ways to make your service more efficient and effective. This is great for people who thrive on having goals to work towards that have tangible results. On the other hand, as a salaried employee, you will be paid almost the same amount every year (varies a little bit with bonus structures), despite the quality and quantity of work you complete. As you grow your freelance business, one thing to consider is that you can hire contractors online and hand off overflow work to them. This allows you to earn money on projects where you simply delegate the work to someone else.
As mentioned above, being your own boss affords you a new level of freedom. Included in this freedom, is the ability to set your own schedule. This means that if you are a night owl who prefers to sleep-in, you can decide to start work at 10:00am every morning, and simply shift the brunt of your schedule to the later part of the day. As long as you get your work done on time, your work schedule does not matter. If you end up deciding that you want to take a month off in the summer, you can also plan your schedule around this as well. Whether you hire a contractor to take care of the work, or you simply shut everything down for the month, there is nobody telling you that you cannot do it.
One of the advantages of working a 9-5 job is not having to worry about saving enough money for taxes, as your employer (if you are based in the United States) will typically automatically deduct taxes such as federal, state, Social Security, and Medicare. As a freelancer, you will be responsible for saving the correct amount of money to pay a certain amount of tax each year. In the United States, there is a 15.3% self-employment tax that freelancers are responsible for paying in addition to income tax. This tax accounts for both Social Security and Medicare. With all this being said, there are ways to structure your business to lessen your tax liability. Also, there are often large tax deductions for business owners, which reduces your taxable income.
Another advantage that a 9-5 job has over freelancing is that it can offer job security. As a freelancer, your work often depends on being able to find clients. If you have a dry stretch, this could result in you bringing home a low amount of money. On the other hand, as long as you do decent work at your 9-5, you most likely will not be in jeopardy of losing your job, and thus, your income.
Similar to the previous con, freelancing income can be sporadic. Often, your income is tied to how many projects you have going on at a certain time. Some months you could make $20,000, while other months, you could bring in $500. This being said, there are ways to protect against this. Signing retainers for recurring service with clients can help to stabilize your income and provide a bit more consistency. Additionally, you can decide to take on contract or part-time work if you desire more consistency in your income.
One of the disadvantages of being self-employed is that you do not have employee benefits such as healthcare and access to a 401(k). As a freelancer, you are responsible for securing your own healthcare, which can be a significant expense depending on where you live. In terms of 401(k)s and other retirement accounts that employers may provide access to, there are options for freelancers that can fill the gap. These options include a variety of Individual Retirement Accounts (IRAs) such as Simplified Employee Pension (SEP), Roth, and Traditional IRAs.
Working remotely has its perks, but it also has its disadvantages. Sometimes, it can be lonely to work by yourself everyday. In a standard job, you get to go into an office and build relationships with your coworkers. As a freelancer, often the only people you interact with on a daily basis are the people you live with and your clients. If you crave social interaction and want to have an “office” type of feel, you can go to co-working spaces. These spaces are intentionally set-up to allow for people to come and work in a setting surrounded by other people. Often, these offices are populated by freelancers, small business owners, and a collection of remote workers.
Of the pros and cons of self-employment, the difficulty of being able to find work consistently is one of the most commonly mentioned cons. Finding consistent work can be a slow process. Building relationships and a reputation takes time, and these are the main things that contribute to finding consistent work. Securing a steady flow of work can seem like you are pushing a boulder; however, after you establish some momentum, the job becomes a lot easier.
If you want to learn more about how to find clients, here is some helpful information from Flux Academy’s founder, Ran Segall:
When you work for yourself, there is a lot of freedom that you experience. This freedom is accompanied by a lot of responsibility. Since you do not have any coworkers, all of the responsibility falls on you. Even if you are not a salesperson, it is your responsibility to find and secure clients. You have the responsibility of taking care of tasks that you do not like and have no experience with. One benefit of having to take care of these items is that you will rapidly expand your skill-set. Also, if you truly do not want to take care of certain tasks, you can begin to delegate them to contractors that you hire. However, this will add the responsibility of having to manage another person.
There are many pros and cons of being self-employed. Freelancing can be an incredible choice that enables you to do work you love and enjoy great freedom. Conversely, freelancing can seem overwhelming and lonely at some points. The decision to become a freelancer is highly dependent on the type of person you are and what you value.
If you are a designer and are interested in learning more about how to build and scale your freelance business, Flux Academy has a course tailored exactly for this purpose, The 6-Figure Freelance Designer.
In joining The 6-Figure Freelance Designer, you will join a community of over 1,000 professional designers and have the opportunity to learn directly from Ran Segall. This course takes a deep-dive into the topics of business strategy, marketing, sales, finance, operations, and scaling. If you enroll in this course, you will learn the proven methods that have helped other designers build businesses that consistently attract high-value clients, while also avoiding feast and famine cycles.
Click here to hear more about the details of the course and to read what other students have said about their experience.
