Whether you’re working your side hustle or taking your passion full-time, here’s what you need to know to help your one-man business run smoothly.
Choosing to be your own boss can be exciting, but when you're in the thick of things, it can be difficult to put in place the same parameters you had with a steady job. When I first left my position last spring to pursue freelance writing and launch my own business, I made many rookie mistakes. Feeling unmoored, I said yes to every assignment that came my way. The result? I was instantly overwhelmed and had no time to work on my company. One friend gave me invaluable advice: Set a limit. Once I had brought in what I considered enough money for the month, I could decline new assignments that came my way or only pick up work that excited me. To achieve your own success, follow these tips from other women who have become their own boss and made it work:
SET THE STAGE - TAP YOUR NETWORK BEFORE QUITTING
If you can begin to bring in clients—or spread the word that you're going out on your own—before taking the plunge, you'll offset some of the stress. "I got a gig about two weeks after leaving my job," says freelance video producer and director Sarah Springer, 30. "I had people I could reach out to for job opportunities because I've worked in video production for a while and had established pretty strong relationships with folks in the industry."
ASK FOR HELP
"In retrospect, I wish I'd known more about the importance of having a lawyer when starting out," says Tameshia Rudd-Ridge, 30, who runs a concierge business focused on travel to and throughout Africa. "I started freelancing out of necessity but didn't spend much time learning how to legally protect myself, my assets and my intellectual property." Freelance creative marketing consultant Tracey Coleman, 38, recommends hiring an assistant when it's clear you need an extra set of hands: "The little stuff adds up quickly, so find a reliable person to take some of the load off."
TAKE NOTE OF YOUR HABITS
"Someone really brilliant once told me to pay attention to my habits and to create a system based on those habits," says Springer. "If you tend to take too many naps while working from home, then don't work from home!" Listen to your needs, then work around them. If a bustling café doesn't suit you, seek out a quiet spot at a local library or rent a desk at a coworking space like WeWork.
A busy café may not be the right place for you, so try renting a desk at a coworking space.
If you've never had to arrange your rates outside your salary, it can be tricky to stand your ground when you go at it. But the first contracts you secure can be crucial for setting the stage for future business, so don't lowball yourself. Rudd-Ridge suggests doing test runs: "Practice negotiating as much as possible in everyday life situations."
ASSEMBLE AN ADVISORY BOARD
"I had no idea how isolating the freelance life can be," says Coleman. "As a freelancer, not only do I have to seek out social interaction, but I also lean on former colleagues and advisers for help when I need it. I've now balanced the solitary nature of freelancing by joining WeWork and by scheduling more face time with like-minded professionals." Event planner Tanya Hayles, 37, says putting together an advisory board has helped her too. "Learning from people with different backgrounds will help me think things through from multiple angles," she says.
ENJOY THE LEAP
Yes, going it alone can be scary, but don't forget to view it as the chance that it is, says Coleman. "It took me about six months to secure my first client, and I honestly enjoyed the freedom. I traveled to Abu Dhabi, India and South Africa, then spent some time with family and friends. See those initial months as an opportunity to become rich in experiences, not in money." Be on your way to a fulfilling freelance career.
DO THE MATH
Giving up a steady paycheck can be as thrilling as it is terrifying. We asked Washington, D.C.–based personal finance expert Dominique Broadway how to find a new normal with your money.
STASH AWAY CASH EARLY
Before you resign, make sure you have at least six months' worth of expenses saved up. "If you can't reach that amount before leaving, try to aim for your freelance business to bring in at least what you are making on a monthly basis, plus 40 percent extra to account for taxes, health insurance and other new business expenses," says Broadway.
DECIDE WHAT'S WORTH IT
Expect things to be pretty lean those first few months. Checks won't start rolling in right away, so you'll want to keep your expenses as low as possible. Paying off any remaining credit card debt will free up cash, but consider other expenses you can stretch (maybe your weekly mani goes bimonthly). Then use the extra on what matters: "Having a tax preparer if you're not comfortable doing them on your own could save you thousands in the long term," says Broadway.
KNOW YOUR WORTH
When pricing your services, research to see what others in your field are charging and determine the value that your services will bring to your client. Depending on how long you've been in the industry, you may be able to command a higher hourly rate than you might think. "Never let anyone haggle you down, and always stay strong with the prices that you set," says Broadway.
DO A FINANCIAL PROJECTION
Let's face it: You will make more in some months than in others. To better prepare for fluctuating income, Broadway recommends doing a financial forecast just as major corporations do to determine how much you'll bring in for the upcoming months. "This way you're not surprised if you bring in less than expected," she says. "Also, make sure that you are saving more money when you have those higher-income months to help balance out the lower ones."