Self-employment is the dream of many but the reality of few. This is because when you become self-employed, you give up a lot of the luxuries of a traditional job. Things like health insurance, paid time off, and lead generation are all included in full-time employment and harder to come by when you work for yourself. If you are living the freelance life or thinking about taking that route, you might want to rethink it.
1. Really think about why you're doing it.
"Freelancing can be difficult or truly stress-free, depending on what your goals are," said Avery Morgan, senior editor at EduBirdie. "If you are looking for a stable source of income to support a family, working exclusively in the gig economy likely isn't the most practical choice, since many jobs are unpredictable in terms of salary, demand and work."
Morgan continued to say that on the other hand, if people are looking to make extra money while working toward other goals or in addition to a full-time job, freelancing is a great option that frequently lets people set their own hours.
2. You have to be the boss, the employee, the project manager and more.
Morgan said successful freelancers need to adopt a go-getter mentality, as they constantly have to think ahead and consider what their next project will be, how they will find it and how much money they will earn from that work.
"Since gig workers are their own bosses, business and project management skills are vital so that they can track finances, create invoices, build project budgets and timelines, and manage contracts, while in a full-time position, there are frequently other teams that handle these kinds of matters," Morgan said.
You'll also have to worry about things such as securing health insurance and saving for taxes, because you are your own accountant.
"[Freelancers] also have to handle saving money from each check to go towards taxes, because they aren't automatically taken out when one freelances, and healthcare insurance has to be paid for out of pocket through the Healthcare Marketplace, without the assistance of a company plan, which is usually more affordable and many times covers much of those expenses, if not all," said Lisa Cardinale, PR account executive with Serendipit Consulting and former PR freelancer.
3. You need impeccable organization skills.
You might consider yourself organized, but you won't realize how true that is until you work for yourself and are responsible for every aspect of your business, such as securing health insurance, figuring out taxes and setting your work schedule.
"Online organizational tools like Asana or Trello can be extremely helpful in project management, as they allow users to create different tasks and build to-do lists within each larger task," said Morgan.
Morgan added that by setting up such organizational tools, freelancers can set deadlines and track progress without having pieces of paper all over the place that are bound to get lost. "Through calendars, you can also set reminders for yourself in advance of deadlines to make sure you're turning your work into your employer by or before deadline."
Cassandra Anderson, freelancer and owner at ILLighting LLC, has a wall calendar in her home office to keep track of her gigs, agreed-upon rates and hours worked.
"I use that as a reference, then create the invoice within 48 hours of each gig to stay on top of it and ensure that I'm paid for my efforts," she said. "It's up to me to make sure I receive payment, so if I don't send an invoice or realize I never received a check, it's my loss."
Cardinale suggested carrying around a day planner if you like to have things written down on paper that you can cross off. This way, you can also make little notes as you go.
"Don't leave anything to memory alone, because it will fail you," Cardinale advised.
4. You lack protection and predictability.
"There aren't many laws that protect freelancers," Anderson said. "Sometimes in my industry, we'll work a gig until 2 or 3 in the morning and have to be back on site operating tools and heavy machinery at 8 a.m."
She added that there is no workers' compensation coverage either, so if you are injured on a gig and can't work, you are responsible for that loss of income and any medical bills. Not all freelancers have insurance either, so the costs could be high.
Cardinale thinks of the freelance lifestyle as feast or famine. "One month you may have five amazing clients and make more than enough money to pay bills and get by, but the following month you may have none. There is no stability or guarantee that you'll have steady work or income from one month to the next."
Even with all of these limitations and extra jobs you take on to be a freelancer, the lifestyle can be rewarding. It's just important to know what you're getting into before living the freelance life.