How to Smoothly Transition from Full-Time Employment to Freelancing
Transitioning from a full-time job to a full-time freelancing career is one of the most dramatic and risky career shifts you can ever make.
As an employee, you work for a business. As a freelancer, you become the business.
Before you make the transition, be sure that you understand that important concept. You’ll become a special and unique type of business owner and inherit all of the associated responsibilities. Freelancing requires a tremendous amount of discipline, focus, patience, humility, determination, and confidence.
1. Learn About Freelancing
The first thing you should do before quitting your 9-5 job is plan ahead. Learn as much as you can about what freelancing is really like to make sure it’s the right fit for you. Read blogs (like this one), subscribe to a few newsletters, or buy a book about freelancing.
Before you uproot your entire career, it’s worth investing in resources that will help you validate your decisions. Take a masterclass course or chat live with full-time freelancers (like me) in communities like The Freelance Institute.
Freelancing is not a good fit for everyone. 🙅♂️ That’s why so many people struggle — they want all the benefits of freelancing, but don’t understand the long-term commitment and sacrifice it takes.
While you won’t have a physical storefront where you hire employees and manage inventory, you will be responsible for finding clients, managing projects, getting paid, and growing your business. Be prepared for that!
2. Develop a Financial Plan
Before you quit your job, save as much money as possible. A good rule of thumb is 3-6 months of your current income. That way, you’ll have a safety net if you struggle to get clients right away. That’s no easy task. If you can do it, it’s a good indication you’re ready to start freelancing.
Personally, I didn’t save a specific amount of money before I started freelancing full-time. What I did have was two six-month contracts with high-paying clients. It stands to reason that the more control and confidence you have over your freelance income, the less you’ll need to save before cleaning out your office.
You don’t need to form a DBA, LLC, or S-Corp before becoming self-employed. You can simply operate as a sole-proprietor. However, doing so will allow you to get a line of credit you can use if things get off to a slow start.
You shouldn’t rack up debt, but having a financial safety net (such as a line of credit) can give you the confidence to say “yes” to the right projects and “no” to the wrong ones. Your ability to decline bad projects and price your services with confidence will help you build a stable foundation for your freelancing career.
Finally, calculate how much money you actually need to make as a freelancer to continue living the lifestyle you want. Reverse-engineering your salary is a good way to begin understanding your financial needs. Just be sure to account for taxes, withholdings, and expenses.
But if you arrive at a $25/hour rate, don’t settle for that. There’s no reason you can’t instantly charge $50-75 per hour or do fixed-price projects instead. It all depends on your experience, skills, and the value you can provide potential clients.
Don’t forget to research your new tax liability and save money from each paycheck for those taxes.
3. Create Your Own Website
Before you say goodbye to your full-time job, you must have your own website. In my opinion, this is non-negotiable and there’s simply no downside.
Your long-term success as a freelancer will largely be determined by how many leads you can get. In other words, how many potential clients you can get to find and contact you.
With all the freelancing platforms that exist today such as Fiverr, Upwork, and SolidGigs, it’s easy to dismiss the idea of getting clients from your own website.
But despite the growth of freelance marketplaces, the overwhelming majority of freelance clients start their search on Google.
When you become a freelancer, you need to cast a wide net to attract clients. You’ll want to clean up your social media accounts, choose a few freelancing platforms to join, find a few events to attend, and create a website that convinces clients to contact you.
Platforms such as Squarespace, Wix, and Flauntly let you pick a template and get a website up and running in minutes, with no design or coding experience. Focus on making the website attract clients who are searching for people like you on Google.
When you view your website as a powerful business tool, you’ll be able to position yourself for success and get more leads. That’s what I explain in detail in my book, Mastering Portfolio Websites
4. Get Your First Clients
I always recommend starting your freelancing career part-time on nights and weekends. Diving straight into full-time freelancing is usually a bad idea and it’s often done for the wrong reasons (such as disliking your boss or co-workers).
While frustrations at the office are good motivation, it’s not enough to want to quit. You also have to want to freelance full-time.
So if you haven’t quit your job yet, get a few freelance clients and do a few projects on nights and weekends. This will help you determine if freelancing is a good fit for you before you make a huge career decision.
If you can’t handle working extra hours, managing clients, getting paid, and staying organized under stress, freelancing might not be for you.
So where do you find your first clients? Tell your friends and family that you’re taking on side projects. You never know who might need your services within your immediate network.
You can also get high-quality leads sent straight to your inbox through Folyo or SolidGigs. Of course, you can always get your first clients on platforms like UpWork or Fiverr too.
If all else fails, you can sell digital assets on creative marketplaces such as GraphicRiver or ThemeForest. The most important thing is that you have some idea of how you’re going to earn your first few months of freelance income.
5. Talk to Your Boss
If you’ve already done everything above, this might be the part of the article you were waiting for (the part that most articles never bother talking about).
For the most part, you’ll have to use your best judgment and discernment as every company and every manager is different.
If you have a good relationship with your superiors, approach them with honesty. Tell them you’re thinking about freelancing and inquire about any potential conflicts or company policies you may not be aware of.
Ask them if there’s an ideal time it would make sense for you to make the transitions (try not to leave them hanging in the middle of a big project).
This is a conversation most people fear and actively try to avoid.
- “What if they just fire me on the spot?”
- “What if they tell my co-workers?”
- “Will they guilt-trip me into staying here?”
But avoiding this conversation is actually the worst thing you can do. You don’t want to start your new career by avoiding difficult conversations. Trust me, you’ll be having plenty of those with your own clients.
Most of the time, your boss or manager will respond better than you think. Remember, they have policies in place as well (like not firing you without cause or gossiping to your peers). In fact, many freelancers say that their current employer actually becomes their first freelance client!
If you don’t have a good relationship with your boss, you can simply put in two weeks notice. Tell them you’re “moving seeking other opportunities”. You have no obligation to give reasoning or justify your decision. Just be professional and don’t burn any bridges. Two weeks notice is standard in the U.S.
Whatever you do, don’t delay quitting your job because you’re worried the company will fall apart without you. They will be just fine. Having an employee quit comes with the territory, so it’s their responsibility to replace you when and how they see fit.
6. Join a Community
When the day finally comes for you to pack up your office desk and start working from home, celebrate. Treat yourself to something nice, go out to dinner, or take a few days off. You’ve earned it!
But when you’re done celebrating, consider joining a freelance community. It won’t take long before you realize how isolating self-employment can be. No more water-cooler conversations, no more group lunches, and no more faces (smiling or not).
The things you took for granted at work will soon become glaringly obvious. At the same time, you’ll have less and less in common with your peers, family, and friends as you pursue a radically different career path.
You can’t ask anyone questions about freelancing because they won’t have the answers. So how do you build new relationships and navigate this tricky career transition on your own?
Join a community like The Freelance Institute — a community for freelancers and remote workers focused on the business of freelancing. You can chat with other freelancers who have already experienced the things you’re experiencing now. You can ask specific questions about how you should handle a certain situation or what you should say to a new client.
As a new freelancer, you’ll quickly realize just how great it would be to talk to other freelancers rather than Googling for answers. That’s why I created The Freelance Institute — to help you connect with others and get your specific questions answered quickly.
7. Have a Backup Plan
Last, but certainly not least, you should have a backup plan. What if you can’t find any clients? What if you burn through your savings? What if freelancing is much harder than you thought?
When I quit my stable full-time job in 2015, I left on good terms. If all else failed, I had a pretty good chance of getting re-hired. If that didn’t work, I had enough connections with local design companies that I could get another full-time job if I wanted to.
I was also ready and able to get a part-time job doing anything that would pay the bills. If you’re married, maybe you can rely on your spouse’s income for a few months.
The most important thing is to simply be thinking about these situations and have a plan for what you’ll do if any of them become reality.
Good luck with your transition and if you have any questions, join The Freelance Institute where you can chat with me any time you want!
Last updated on March 18th, 2022
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