Congratulations! The days of scrambling around trying to balance any and all extra work that you’ve acquired on the side on top of an already demanding and exhausting full-time job are over. You’ve put in your two weeks notice and you’re preparing to make the leap to being your own boss — solely full-time! Hopefully you are excited, but you’re probably also pretty nervous — and that’s completely understandable.
Your work and life are both going to be different now. You will wear many hats as a business owner — hats that you didn’t always own as a freelancer. You won’t just be getting paid on the hour, for a specific task. Now that you’re an entrepreneur, your actual client work is just one small part of the job. You will need to have a totally different mindset, be even more professional and look at finances in a new way. Only you can hold yourself accountable to how, when and where you work. Business development (marketing your own business to get new clients and reach new audiences) is an entirely separate and huge aspect of your business, along with the client work. You will learn new strategies for making money via streams of passive income. You will also learn that in time, you won’t be able to do it all on your own. Successful businesses always have some kind of team built in place to keep things running smoothly. When you are booking work months in advance, you will need extra hands to get everything done. But, fear not. As someone who made the leap from full-time design employee and freelancer to business owner over a year ago, I know a thing or two about making that scary transition. Below are some tips that you will hopefully find helpful:
1. DON'T CALL YOURSELF A FREELANCER
This is the best piece of advice that I received from a former colleague who (years before me) had also made the jump from employee to business owner. Refer to yourself as a business owner because that is exactly what you are now. You’re not just taking on projects here and there when you have time. You are juggling a lot of different balls and you deserve to be treated with respect, taken seriously and looked at as a legitimate professional putting in the work, all day, everyday. When someone says, “oh yeah, you freelance, right?” you will be able to say, “I used to. I now own and operate my business full-time.”
2. HAVE YOUR CLIENT BASE READY TO SEND YOU WORK
People have often asked me if you need to have a savings account in place before taking the plunge. I don’t think so. Of course, have at least some cushion in case things start slow — but more importantly, as long as you have guaranteed work ready to be sent to you, you should be good to go. Let your current (freelance) clients know that you’ll be available for full-time work and to be an even bigger extension of their teams as of a certain date. This way, they will be ready to start sending you work and in turn, the money will start flowing in. Setup your calendar and start booking projects ahead of time. Get ready to start working right away!
3. DECIDE HOW YOU WILL NEED TO SELL YOUR SERVICES
Are you a 1:1 service provider? Do you prefer to help groups at a time? Do you sell products? I would suggest transitioning from hourly pay to setting your regular monthly clients up on a retainer. This simply means that for a certain flat fee each month, your client will receive either a set number of hours or projects from you. Instead of wrestling with a hundred one-off, individual projects all at once, perhaps gather some of your services into all-inclusive packages, which will allow your clients to get more bang for their buck and more of you. $50 here and $100 there will not always add up quickly enough to pay the bills. Charge what you’re truly worth and receive larger sums of money more often. You’ll also be able to know what’s coming down the pipeline, when and for whom, which will allow you to plan and budget better.
4. TRUST THAT THE RIGHT CLIENTS WILL COME
Don’t just work for anybody. It’s really crucial to focus on the specific niche, market or demographic that you want to serve. You might be the right fit for a client, but it doesn’t always mean that the client is a right fit for you, your time and the way that you do business. Someone who wants to negotiate your services and not pay you what you want is just not worth your time and will prove to be more of a pain down the road. This is an especially good point to make after the above statement – charge what you’re worth. You might be nervous to increase your prices or change things up from the way you have always done them. However, you’re not a freelancer anymore. You’re a full-time business owner who chose this new lifestyle in order to do more of what you love and make more money doing it. In order to do that, you need to work for the right clients. They will see the value in what you offer and won’t stress over what you charge because they will want to work with you. It’s a win-win for both sides. You get to do great work and make more money doing it — and you’re improving business for a great client. Cheers all around!
5. SET UP THE RIGHT TOOLS AND SYSTEMS
You’re a business owner now – time is money. You need to have efficiency and automation in place so that you can spend more time working on your business, rather than in it. You should setup programs and accounts for sending proposals, estimates, invoices, contracts and to get yourself paid quickly and easily. There is an app out there now that can help you with any administrative task possible. For example, I use FreshBooks to send invoices and track expenses. I use Dubsado to send contracts to clients to digitally sign. (This way, I don’t have to print off a contract, sign, scan and email it back. That’s too much work!) I also use Dubsado (and sometimes Asana) to keep track of my client and project information, meeting notes, workflows, deadlines and more. I use Buffer to schedule my social media and blog posts and MailChimp to send out my weekly emails to my subscribers. Finally, I use PayPal (connected to my FreshBooks invoices) for people to pay me quickly and easily. Figure out the software that you like best and start entering names and numbers!
6. HIRE AN ACCOUNTANT
There are too many little things to remember when it comes to being a business owner at tax time – and it’s truly worth investing in a professional to help you. A good accountant (and even bookkeeper) will help you think of expenses that you wouldn’t normally think of. My accountant has me setup to pay quarterly estimated taxes. I find that this helps a lot, as I’m not slammed with a large amount (of several thousand dollars) to pay all at once in April. I check in with him throughout the year to ask any questions and to see what I’m on track to make for the year so that we can adjust the quarterly tax payments if need be. It will help if you stay organized through the year with your monthly software fees, credit card or banking fees, office expenses and utilities (whether you rent or own your house if you don’t travel to an office space.) Your accountant will show you how to split up any bills that might apply to your business, as well as mileage to and from client meetings. And, your tax prep that he/she does can also be used as an expense for the next tax year.
7. MEET WITH A LAWYER
8. SET UP A BUSINESS BANK ACCOUNT
One of the first things that I did when I moved to a new state and had just started running my business full-time was setting up a checking account and getting a credit card (for business expenses only.) It’s smart to keep these accounts separate from your personal accounts and it makes your business even more professional and legitimate. In order to get a checking account for my business, I had to visit a local government building and register for a “Certificate of Assumed Business Name.” Keeping a separate account allows you to see what’s coming in, what’s going out and you can choose how often and how much you pay yourself each week or month.
Enjoy this journey! There is nothing like being your own boss. You might work more than you ever have in your life (who I am kidding — you definitely will) but you will love what you’re doing, who you’re helping and serving — and the more premium paychecks that will hit your bank account. Trust in yourself and believe in what you do — and you will be successful!
ABOUT THE AUTHOR: JESSIE FORD COOTS
Jessie Ford Coots is the owner and designer behind Untethered, a boutique branding + design studio in the Midwest that specializes in creatively elevating visual identities for small businesses (especially female entrepreneurs.) She enjoys giving new and old businesses creative makeovers, as well as partnering with select companies and non-profits to provide monthly design services. When she isn’t designing, she’s traveling around the U.S. showing her quarter horse in barrel racing events and visiting friends and family. Originally an Ohio native, she and her husband live outside of Louisville, Kentucky. To learn more about how she can creatively improve your business, visit www.untethereddesign.com.