A lot of you reading this are probably part of the so-called “gig economy.” That’s safe to assume since in the next 3 years, “about 40% of Americans will be working outside traditional full-time jobs” according to government economists.
And it’s not just Uber drivers and Postmates delivery people. This non-traditional workforce also encompasses those who supplement with a side-hustle, and even freelancers who make a legit salary. It’s an increasingly popular way to work and live; so much so that many are actively looking to transition into this situation. But how do you make that pivot, turning your gig into a career? Well, we work with many freelancers who’ve done just that, and there are some logical steps to take.
1. Switch your mentality from hobby to business
No one can tell you when to make a side-hustle into a real job (well, maybe your parents), but the choice has to be a mindful one. Everyone has different triggers. Some realized they were making enough money from their gig to cover rent. Some had been planning this “exit from the rat race” for a specified amount of time. Some just “felt the need” waking up one day. For most, it was the natural result of life circumstances. But to really succeed, all made a conscious decision to stop thinking of their work as just a gig, and start thinking of themselves as a business.
A gig is something you can quit tomorrow. A business is an investment of yourself. After all, how many side-hustles bring in over $80k with a retirement plan? That doesn’t happen unless it’s a business, because businesses have goals. Full-time freelancers are some of the most business-oriented thinkers out there, because they are of the mentality of growing and maintaining their job all by themselves. You’re the CEO, but you’re also the janitor.
Here’s a good quote that highlights this switch in mentality from venture capitalist Anthony Frasier:
“On everyone’s Instagram account, they’re the CEO of something,” Frasier said. “A lot of people think they have a business because they sold a T-shirt. That’s a hobby. A business is when you know you’re going to have people coming in, and you can predict it.”
Step one is to think of your gig as a business, even if you’re not earning much. It all begins here.
2. Get your money right
Why do small businesses fail? Here’s the relevant section of an infographic on this topic:
89% experience cash flow problems, and it’s splitting hairs to also list that 29% run out of cash, because if that’s not a cash flow problem, we don’t know what is. Step two is to address this main issue from the beginning, and never stop addressing it.
As a burgeoning freelancer, there are many money mistakes that can put a serious dent on your cash flow. From dealing with taxes, to looking at incorporating as a legal business entity, to general bookkeeping, these are the admittedly boring but incredibly crucial areas of knowledge that separate the hobbyists from the entrepreneurs. And trust us, this advice is not just for startups with angel investors and a team of twelve. The lone freelancer editing video or writing blogs still needs to know this stuff; even more so since you’re also the sole CFO of your growing freelance business.
Look up any list of “things freelancers should know,” and being organized with money management (for tax purposes) is always on there. Once you start getting serious about tracking your income and expenses and creating a cash flow forecast, you’re on your way to laying the groundwork to build up your income and portfolio. Those that “will deal with that stuff later” will inevitably be caught by surprise by taxes which can kill your foray into freelancing before it even starts.
3. Set your first goal (of many)
Freelancers don’t have a boss breathing down their neck asking for that TPS report. That’s the blessing of the lifestyle, but it’s also the curse if you’re not a self-motivated worker. That’s why after you’ve made the mental choice, after you’ve taken stock of your finances, the third step to take is to set a goal for your business.
Call it a “business plan” if you want, but we’ve met many freelancers who don’t have a rigid one of those. Rather, the successful freelancers are all really good at setting goals and keeping to them.
Becoming a goal-oriented person isn’t easy if you’ve been working a 9-5 for years with someone telling you what to do. So just start with one:
- I want to add one new client by the end of this year.
- I want to cover rent, utilities, and food with my freelance work by the middle of 2018.
- I want to ask each client for a 25% increase in my hourly rate by the end of this month.
Of course, the simple part is writing it down. The hard part is working toward it. But that’s for the tens of thousands of blog posts out there written to help freelancers grow their business, which you should start reading, because congratulations: you’re now a freelancer!
Sure, maybe you’re only making enough to cover coffee for now, but taking these three steps is essential to taking your side-hustle and turning it into a career.
Are you ready to take the plunge into becoming a full-fledged freelancer? We’re here to help!