Posted: 2013-03-20 19:58:27
It is interesting to look at the two ends of the spectrum of what constitutes "freelance" professionals and everything in between. At the youthful end of the spectrum, we see the Digital Natives (Millennials, GenY). This generation wants flexibility, to run their own show, to get paid well for their talents. And there is absolutely nothing wrong with this. In fact, I think it's fantastic to see young professionals plying their chosen professions and making an honest living at it.
At the other end of the spectrum, you will find the Boomers and older GenX'ers, and many of them have "put out their shingles" out of necessity. In a recession, many companies have been loath to hire older professionals with decades of experience. There are still very few industries and companies that provide "exit strategies" for aging professional populations. There does come a point in a professional's life when they are ready to start winding down, and unfortunately it isn't always easy to do so without looking like you are "giving up." More mature workers still have bills to pay, children in college, and retirement savings to contribute to.
There is also a band in the middle, those professionals that have chosen to be freelance professionals for a variety of reasons, many of them having to do with work-life balance. I know several professionals (especially women) in their mid-thirties to early forties that decided to go the freelance route to devote time to their young families. Often these professionals have a spouse or partner that can provide benefits, a steady paycheck, and some stability.
Some professions will always be "freelance"; authors, artists, and solo musicians often are freelance professionals by default. Real estate agents, many bookkeepers, accountants, massage therapists, hair stylists are almost all are considered "freelance" if they aren't employed by corporations. There are advantages and disadvantages to the freelance lifestyle. I was recently looking for a part-time graphic designer to work onsite 20 hours a week. It's a great opportunity for someone that has a solo business but also wants to have some stability and get a steady paycheck. I will say that almost every professional that we brought back for a second interview was someone that was excited about collaborating with a team, being in an atmosphere where there is an energy to the work space. The person we just made an offer to was *genuinely excited* about the opportunity, in contrast to the other five people we considered. One of the biggest drawbacks for many solo practitioners is the isolation of not having regular contact with colleagues.
I have interviewed a lot of freelance or small business consultants over the last few years. One of my close friends finally had to close up shop after over ten years because of the overhead cost, and an offer to work for a company managing their on-site consulting at a Fortune 100 company. He was sad at losing his autonomy, the office he had gone to every day, and there was a sense of failure. On the flip side, he didn't have to worry about trying to sell his services, he now gets to concentrate on what he is good at, has full health benefits, he gets a regular paycheck and doesn't stress about paying the bills. It was a positive tradeoff for him.
Most people starting out forget that a major part of your efforts are going to be related to *running a business* and *developing your client base* (read: sales and marketing). Make sure you understand the costs you are going to incur as you figure out your fee scale. Know the tax laws for your city/county/state, and hire yourself a good accountant. Get your business license before you do *anything else*. (Check your state's website under "licensing" for information on filing a business license.) Keep your personal and professional monies separate. Pay yourself only out of the profits from your business after you satisfy the costs you have (things like taxes, supplies, electricity, your health care and 401k contributions, your internet connection/website hosting fees, cell phone bill, etc.) Just remember, if you are setting out on your own, your business is with you 24x7, and no one else will do it for you. Get EVERYTHING in writing; bids, contracts, invoices. In this day and age, you are only as good as your business practices. The money you make is built on your own sales efforts and expertise at whatever you do professionally. Keep your reputation clean, and if a client doesn't treat you professionally, remember that you can pull out of the relationship at any time.
I found this great calculator a few years ago which is very helpful for budgeting .
If you don't know what you should be making as a salaried employee, check out either salary.com or payscale.com by zip code.
Being independent is great for some people, and not so much for others. Only you can make that determination and make a go of it in the business world.