Freelance Transition: Take the Leap, But Don’t Forget Your Parachute

Leaping into freelance work is pretty popular these days. One-third of the U.S. workforce is freelancing in some form or another. But look before you leap, and plan your freelance transition. Jumping without a parachute is not recommended (though some people thrive on risk). The freelance transition can be pretty rough. Those direct deposit paychecks no longer magically appear every two weeks, keeping your bank account fat and happy. Instead, income is inconsistent and that bank account is going on a diet. And not a happy, healthy diet either. Figure out your freelance finances before you make any changes. Find out how much money you need and start saving up that emergency fund before you quit your job. Once you know your money needs, you’ll be better able to plan your freelance transition. Just don’t go blindly jumping into freelance work. Take the time to come up with a freelance transition plan.

Various Freelance Transition Scenarios

Here are some examples of what that freelance transition might look like:

Moonlighting

Perhaps the most popular way to ease into freelancing is by moonlighting. You work your 9-to-5 job and then put on your freelance pants at night. Currently 27% of freelancers work this way (that’s more than 14 million people). It’s perfect for the freelance transition because you can build up clients, income and a portfolio, all while still earning a steady paycheck. That extra money can help cover your startup costs or build your emergency fund. The downside is you’re putting in a lot of hours. But no one said the freelance transition was easy.

Part-Time Job

Another approach is to go ahead and quit your 9-to-5 job, but take on a part-time job to help pay the bills. People with multiple sources of income are called diversified workers and they make up 18% of freelancers (or 9 million people). For some this isn’t a transition plan, but a constant state. The part-time job approach to your freelance transition allows you to continue earning a steady income without the demands and stress of a regular 9-to-5 job. Depending on your part-time job, you’ll probably have more time and energy to pour into freelancing. You can still build up clients, income and your portfolio until you’re ready to move into freelancing full time. This is a more aggressive dive into freelancing. You’ll likely be earning less than your full-time job. That’s the potential downside. You might not have as much income to help you build up an emergency fund or cover startup costs.

Turn Your Boss Into a Client

If you’re leaving your job on good terms you might be able to turn your old job into a freelance transition. If your boss knows you’re stepping away, they might be willing to let you do your own job on a freelance basis until they can find someone to replace you. It could be a win-win—you get to start freelancing with a steady client and your boss gets an easier transition. It could also lead to more clients. That’s how it worked for freelance web designer Brian Casel:

“My very first clients came as referrals from my former boss at the agency. … What often happens is the agency works with very large clients. The type of clients I’d work with are too small for an agency to take on budget-wise, so the agency is happy to pass on smaller leads.”

But this approach only works if your employer is on board. If they’re not, well, you might have an awkward time keeping your job and trying to moonlight.

Other Freelance Transition Options

There are lots of other ways to transition into freelance. You could win the lottery. Or, more realistically, a relative might be willing to help you out with a no-interest loan or an early inheritance. Just be careful of any loans. That’s not free money. You’ll need to include loan payments in your expenses. If you lose a job and get severance and/or unemployment, that might be a way to transition into freelance. That’s how it worked for me. When my company relocated I got a small severance package and was eligible for unemployment. I’d been looking for a new job, but I’d also been moonlighting. With my day job gone, I was pursing more and more of those moonlighting jobs. At the time unemployment was structured so it could supplement any income I had coming in. So the unemployment served as a safety net until I could get established as a freelancer. Unemployment doesn’t always work that way and it varies by state (plus this was over a decade ago). I also had a lot going for me in my situation, including an employment counselor and available funds for training, which I used to take a small business class. Losing my job worked as a perfect transition into freelance work. But it doesn’t always go that way.

The No Parachute Method

Another way to plan your freelance transition is to jump without a parachute. This isn’t exactly recommended. It works best for people with very few expenses and obligations (if you’ve got kids and loans, you better rethink it). But there is a certain appeal. If you work best under pressure, this might be good for you. It’s high risk, but high reward. Sometimes you need to take risks. They force you to do what needs to be done. That’s what Cortez did. He burned the ships to quell mutiny and push his men forward. No going back! (OK, the ships were scuttled, not burned. Score one for historical accuracy. But the basic idea is sound.) But it’s definitely not for everyone. Most people need some kind of safety net to fall back on.

Freelance Transition Tips

As you think about how you’re going to plan your freelance transition, here are a few tips to help you through:

Try It First

As much as we love and support freelancers, it’s not for everyone. Not everyone works well being their own boss. Some people crave direction and leadership. It’s comforting knowing someone else is worrying about the big picture strategy. That’s not a sign of weakness. People are just different. Freelancing is natural for some people. It can make other people squirm. Before you make the freelance leap, find ways to try it out and make sure freelancing is for you. Try a few moonlighting projects, even if you’re not planning to moonlight. It’s a big shift, so get a taste before you commit.

Don’t Burn Your Bridges

Like Cortez, you might find motivation in burning your ships (OK, scuttling), but there’s nothing to be gained by burning your bridges (whoa, mixed metaphor headache). You may be excited to leave your full-time job, but don’t say mean things and slam the door on any potential opportunities. Sometimes that former job will turn into freelance work or your former boss will offer new leads. Do everything you can to leave on good terms.

Build Connections

You need to start building relationships as soon as you can. Not just with potential clients, but with other freelancers as well. 81% of freelancers refer work to other freelancers. Start making those connections today. Our free ebook might help: Turning Contacts Into Contracts.

Go Deeper

As you land your first clients, always look for ways to go deeper with them. Ask questions to see what other problems you can solve for them. You’re trying to build a long-term relationship. And you need to think long term. This isn’t milking every client for more work. It’s just good service. Get to know your clients and figure out how you can help them. It might not pay off now. But your clients will remember that you treated them right. It will pay off down the road.

Soak It Up

As you dive into your freelance transition you’re going to realize something quickly: You’ve got a lot to learn. Put the ego aside and own up to the fact that you don’t know it all. Soak up all the knowledge and insight you can get. Learn from others. You’ll have to make some of your own mistakes—that’s just part of life—but you want to avoid as many as you can. Especially as you consider your freelance transition, find resources that can help. Another free ebook to check out: So You Want to Be a Freelancer? Freelancers have to do everything themselves. But that’s not always a good plan. Don’t be afraid to hire pros when you’re out of your element. If filing your taxes is a nightmare, hire someone. There’s a point when the hours you spend wrestling with the tax software are better spent earning money at what you do best. Hire someone else who does taxes best.

Winning the Freelance Transition

Start your freelance career right by making the right transition. It’s a big leap, but there can be plenty of rewards. Just don’t forget your parachute. We all want you to land safely.