You’ve been working as a freelancer for a while and you’re ready to fully commit to entrepreneurship. Maybe you’ve continued to work your 9-to-5 while you freelance on the side as a means to test whether you could make full-time income doing what you love. Or maybe you simply want to grow your business beyond the work you do as a side hustle.
Transitioning from freelancer to entrepreneur may not be as simple as you’d think it should be, so make sure you follow these steps to ensure success.
Step 1: Look at the money
If you’ve been relying on a steady paycheck from your day job, quitting it will understandably impact your finances. It may take a while to get enough work to equal to full-time (or more) so you need a plan for this lifestyle change.
Do you have money in savings? Enough to cover the gap between what you’re making and your expenses? And for how many months?
How many hours a week are you currently working, and how much money are you earning? How much additional business could you guarantee tomorrow if you were available to take it on?
Ideally, you will have at least six months’ worth of expenses covered in your savings account and have at least a few big projects in the queue that you could take on once you quit your job. However, never rely on client work, because plans fail and budgets shrink. You’re never guaranteed work or money as an entrepreneur, so get into that mindset now.
Step 2: Consider how you could expand your team
For many, the major difference between working as a freelancer and considering yourself a full-fledged entrepreneur is having other employees to help with the workload.
Imagine how many more projects you could take on if you outsourced tasks to others. Imagine how many more solutions you could offer clients if you hired professionals that offer complementary skills to your own. For example, if you’re a content creator, you could hire a designer to offer full-service marketing solutions to clients.
Do you have enough work to hire one or more full-time employees, or would hiring freelancers fit the bill?
How many hours of work per week/month could you guarantee anyone you hired?
Can you hire help now while you have the security of your full-time job?
Step 3: Be willing to invest in your business
You may have gotten this far freelancing through word of mouth referrals. You may or may not have your own website. But if you want to transition to running a business, you’re going to need to invest in establishing your company as a professional and marketing it to increase revenues.
Some costs you may need to invest in include:
- Website design and hosting
- Marketing (content creation, social media management, advertising, etc.)
- Filing for business permits and a business structure (like a corporation)
- Business cards and marketing material
Certainly, you may be able to take on some marketing tasks yourself, particularly if you’re in that industry. But you’ll still have costs associated with some of those aspects, so make sure you set aside both the budget to cover those tasks and the time to do what you’ll manage yourself.
Step 4: Fill your pipeline of work now
Don’t wait until you’ve put in your notice at work to start building your pipeline of projects. Yes, you may work late into the night to complete client projects, then get up early to go put in your eight-hour workday. This is only temporary, and doing so will ensure that you’ve got cash flowing into your business once you are a full-time entrepreneur.
If you have employees or freelancers, you can assign them some of the projects while you wrap up your role at your full-time 9-to-5 job.
Another benefit of attracting as much business as you can handle before you transition is that not only will you have work now, but with any luck, these clients will stick around, or refer others to you. If you can create a need for your clients to hire you on a monthly basis, you’ll have recurring revenue and (close to) guaranteed income for the foreseeable future.
Realize that you may experience a bit of a mental shift as you move from freelancing to working full time in your own business, and that’s understandable. Your work routine (and even where you work) may change, and you may need to wait until the dust settles before it comes naturally to you. Give it time.
Transitioning from freelancer to entrepreneur tells the world that you’re serious, experienced and professional.