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The Nuts and Bolts of Launching a Career in Freelancing or Consulting
by Maureen Crawford Hentz
"I'm going to work for myself." For many people, the dream of independence can be turned into a reality. Freelancing and/or consulting is the most straightforward path toward working for a great boss -- you. Because it is a tremendous commitment, however, it's important to think logically and take steps toward this career move seriously.
The most important thing to consider is the purpose of freelancing/consulting. Are you looking to fill some free time? Do you want to earn extra money? Are you looking to work for yourself? Want to test the waters in a new career? These are all questions central to the issue of income expectation. Decide whether you will freelance/consult on the side, as a part-time position, or as a full-time move. It's wise not to quit your full-time position until you've been consulting on the side for a few years and have a good sense of the flow of your intended business.
You don't really want to quit your "real" job unless you:
- have enough money set aside to support yourself (and others, if applicable) for a year, plus costs for starting up your business, such as a tax advisor, lawyer, copy machine, and office supplies.
- are independently wealthy and/or have a spouse who can provide all of the above.
If you don't plan to quit your real job, you have more options for success benchmarks. When you have a steady source of income outside of your consulting/freelancing work, your timeline for finding clients can be longer, you can be choosy about clients and projects, and your financial needs are covered during the start-up periods and inevitable dry spots all new businesses face.
Things to Consider First
- Think about the market and think out of the box. Sure, you are a great Web-page designer, but there are literally thousands of Web-page designers out there. Instead of designing Web pages, why not teach high school students about design? Assessing the market is extremely important. If your intended market is saturated with competition, it's important to be realistic about your ability to find and sustain a client base.
- Think about non-compete agreements. Many companies ask you to sign an agreement saying, in many cases, that you will not compete with the primary business of your employer. For a recruiter hoping to go freelance, for example, a non-compete agreement may mean that you signed away your rights to recruit in a particular city, with anyone currently on your employer's client list, or anyone within a certain physical distance to your employer. For other employees, such as a hair-stylist, a non-compete agreement may mean that you cannot take your clients with you when you leave. Carefully check your employment records as part of your pre-change strategy.
- Check into no-moonlighting agreements. Although less common than non-compete agreements, some businesses ask you to agree not to work on your own after traditional work hours. Again, be sure to check if your employer has this policy. Some states allow businesses to prohibit moonlighting. Check with your state's Division of Labor if you have questions.
- Carefully study tax and record keeping implications. Before you hang out your shingle, it's important to understand the tax ramifications of self-employment. As a self-employed taxpayer, you may have to file paperwork completely unfamiliar to you. For independent contractors, the equivalent of the W2 form issued to employees is a 1099, generally issued for fees paid to you in excess of $600. See irs.gov for information about tax filing status and record keeping.
- Call in the experts. IRS.gov has an on-line site for small businesses and self-employers. Most mid-to-large size cities have small-business associations and even start-up loans, grants and classes for new businesses. It may also be a worthwhile investment to speak to a tax advisor or financial planner. Finally, think carefully about your legal needs. Will you need a contract for each client? If so, a lawyer may be able to draft you a template to use with each new client. It's important to consider issues such as liability, cancellation policies, arbitration agreements, and payment terms.
- Do you need insurance? What costs are associated with insurance to cover you and your assets? Insurance needs vary depending upon the kind of business or activity you are conducting. It's important to carefully research this topic. Most folks starting on their own as freelancers rarely think about negative scenarios. Are you looking to become a masseuse? What if your client falls off the table or has an allergic reaction to the lotion you use?
- Consider the licensure requirements. Thinking about starting a resume-writing service? Are most resume-writers in your area certified? Should you be in order to be competitive? What are the costs associated with certification?
Finding Clients and Customers
- If permitted by your current employer, let your current contacts know you plan to go out on your own and/or are offering a la carte services apart from your current position. You can spread the word formally through such means as fliers and email, or informally through mentioning your availability to people as you speak to them.
- Ask people to pass on your name to anyone who might be looking for your services. I recommend sending out an email, which is easily forwarded to others. Make sure you use your own/your business's email account; using an employer's email is unethical, and using a spouse's/friend's email is unprofessional.
- Consider making simple but professional-looking fliers. Depending on your business, you can post these in high-traffic areas.
- Join a professional association. If you're thinking about becoming a professional organizer, for example, it's important to find the Organizational Professionals group in your area. In addition to offering a place to exchange ideas and network, local professional groups often offer mailing lists and "recommended providers" among the members of their group to people who inquire.
- Give away the milk for free. Many consultants and freelancers get their start at conferences or large meetings. Many performers, leadership consultants, and motivational speakers fall into freelancing/consulting because they speak at a conference, and then are approached after a workshop/lecture by impressed participants. Think of who your potential audience might be, and check into regional and local conferences and workshops of those folks in your area. If you are looking to consult on effective customer-service techniques, giving a workshop on this topic at a local small-business convention/workshop is a valuable use of your time.
- Get a Website. Web sites are critical to the success of smaller consultancies/ freelancers. Put the word out that you are looking for a web designer. Negotiate price and think of creative ways of payment. Offer a link to designer's site or a banner indicating the designer and contact information. This next step is important: Query your favorite search engine for your topic such as "PR firms in Boston" or "Party Planners-New Jersey". Note what the search comes up with -- and then see if you can link to or be listed on those sites.
- Take out an ad in the smallest local newspaper in a target town or a small trade newspaper. Looking to provide personal chef services? Take out a small ad in the town paper of the wealthiest suburb within driving distance. Dream of freelance editing and proofreading? Want to tailor clothes or make alterations and repairs? Take out an ad in your local college paper, where you'll reach both students and faculty. Want to offer your expertise as a jury consultant? Advertise in your local Bar Association publication.
- Attend "community days." Does your city sponsor community fairs? Bake sales? Rummage sales? Environmental-awareness days? First-time homebuyer fairs? These are all good places to rent a table (usually for a small fee of $10-50) to give out fliers for your business. A house inspector new to the field, for example, can gather a huge list of names at a homebuyers' fair.
Ideas for a large-scale customer drive
- Obtain a yellow pages ad. Advertising in the yellow pages is a sure way to reach people looking for your services.
- Sponsor something. Many community groups and religious organizations look for advertisers for their bulletins, newsletters, or drama programs. Think about sponsoring a Little League team or pee-wee soccer team. Again, it's critical to target a specific audience. If you are looking to freelance as an at-home computer teacher, advertise to an audience that would be in the market for those services -- folks in the 70+ age bracket perhaps? Offering birthday-party planning? Advertise in the second-grade class play program.
- Cold call/mail. If you plan to go large scale, cold-calling and direct mail are the proven ways to get customers. Go through the phone book, and call companies you think could benefit from your services.
Freelancing and consulting are great ways to explore various career paths and revenue streams. Performing this kind of work on the side can be fulfilling, exciting and fun. Taking a chance to explore a new career, or explore the world of being your own boss is a great opportunity stretch yourself a bit. The best part is that you work for the best company ever: You, Inc. Take a chance. Do a little consulting and freelancing. You might find a whole new career is waiting!
Looking for the best consulting and freelancing jobs? Go to our Jobs for Consultants & Freelancers.
Find the best business and strategy guides for counsulting in our Consulting & Freelancing Books
Questions about some of the terminology used in this article? Get more information (definitions and links) on key college, career, and job-search terms by going to our Job-Seeker's Glossary of Job-Hunting Terms.
Regular QuintZine contributor Maureen Crawford Hentz is manager of talent acquisition, development and compliance for OSRAM SYLVANIA Inc., a Siemens company. She is a nationally recognized expert on social networking and new media recruiting. With more than15 years of experience in the recruiting, consulting and employment areas, her interests include college student recruiting, disabilities in the workplace, business etiquette, and GLBT issues. Crawford Hentz has been quoted by The New York Times, NewsDay, The Boston Globe, and National Public Radio, among others. In addition to her work for QuintZine, she is a contributor to the Boston.com HR blog. She conducts workshops, keynotes and conference sessions nationally. Crawford Hentz holds a master of arts degree in college student personnel from Bowling Green State University, Bowling Green, OH, and a bachelor of arts degree in international studies from The American University, Washington, DC. She lives outside Boston, MA.
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