Last Updated on August 17, 2023 by Sophie
If you’ve clicked on this article because you’re interested in becoming a freelancer and self-employed then congratulations! You’ve taken the first step in what may well be the most important decision of your career. I have been self employed for seven years and, in this guide, I’m going to walk you through steps on how to go full-time as a freelancer and quit your corporate job.
Being self employed can be one of the best decisions you ever make- if it’s the kind of lifestyle you want. Many people dream of quitting their jobs and never having to answer again to a boss, as well as setting more of their own working hours.
However, being a freelancer isn’t always rosy and there can be many months where working for yourself feels like a feast or famine. When you’re self employed, you’re often relying on just yourself to make ends meet, and get the work done on time, not to mention all of the admin that comes as par for the course.
I don’t say any of this to be negative or deter you from being self-employed. I just say it because there are a lot of factors that you might not have considered before rushing into a decision that will affect every aspect of your life. However, when you break it all down, it’s definitely something you can do once you realise it’s just a different way of working.
You need to work to work out your exact monthly budget
When it comes to working out your budget, you’ll have needs and wants. Needs are negotiable and must be factored into your budget. This includes things like rent (or mortgage payments), energy bills, groceries, etc. This will make up the minimum amount that you need to make in order to survive.
You’ll need to track every single expense (even smaller ones like phone bills etc) in order to work out the minimum that you need to make in order to live on. There are lots of apps you can use to do this but many people prefer just a simple spreadsheet.
You should also define what wants you want to factor in in order to live a comfortable life (Netflix subscription, budget for snacks, etc). Add these two amounts together and you’ll know exactly how much you need to make each month (and therefore what you’ll need to make with your freelancing income).
Be realistic about your earning potential
The reason that you need to be so strict about working out the budget that you need to live on is because it’s important to be realistic. Many ‘overnight successes’ were not overnight successes but actually the result of years of hard work.
It’s all well and good saying that you’re going to strive for a lofty goal like five figures a month, but this isn’t very realistic when you’re just starting out.
This is why it’s important to know the minimum you need to live on and first strive to achieve this. As time goes on, you can start to set loftier goals, but if your current goal is to quit your corporate job, then having realistic goals is the best place to start.
Factor in costs and taxes
When you become a freelancer, you no longer have a company who is doing all of your taxes for you. When you receive your salary, most of the time, this is after taxes have been taken out and so all of the money you receive is yours to keep and spend as you wish.
When you’re a freelancer, most companies will pay you a sum of money that has not yet been taxed. This means that you’ll have to keep back a portion of the money you have received in order to pay taxes. You will have to also issue your own invoices and keep track of which client owes you what amount.
I personally have an accountant and accounting software who does all of the calculations and tax filings for me as this is one thing you don’t want to mess around with or be casual about! You will also need to factor in the costs of being a freelancer.
For example, when you work for a company, you are often supplied with a company phone and corporate laptop. When you’re a freelancer, you have to buy all of the equipment yourself.
And while you might have a phone and laptop already, you have to factor in the fact that you’re going to have to one day replace these in order to continue working! We should also refer back to the budget portion of this article now- your monthly budget is the amount of money you should have after all of your overheads and taxes are taken out of your freelancing income!
Work out how you could make money as a freelancer using your skillset
Now you’ve decided that you’d like to get into this freelancing thing, it’s time to work out what you can do to make money. You’re going to want to get something to write with (either in your notes app or a good old fashioned pen and paper) and write down every idea that you have.
I would personally say that if this is your first entrepreneurial adventure, then you should focus on a service based business. What this typically means is lower overheads as you won’t have to buy materials, keep stock, etc.
Think about the skills that you already have. Is it editing, copywriting, photographing, etc.? I will go more into this in another article, but you can start small and work up to more work/ larger clients. When I first started freelancing (at the beginning of owning websites), I wrote freelance articles for other people.
If you’re not interested in content creation, other freelance jobs could include nannying peoples’ kids, dog sitting, tutoring, selling downloadable PDFs on Etsy, the world is your oyster and the list in endless- just spend an hour or so sitting down and writing out every potential and possible idea that you have!
Find your passion
When it comes to being self-employed sometimes the only thing that will keep you going is being interested in what you’re doing. As such, when it comes to working out a plan on how to quit your corporate job, the next thing to do is to work out what you’re actually passionate about.
Is it helping people improve their maths skills? Is it creating beautiful artwork? What you want to do is to try and work out a sector where your passion will keep you motivated to keep working, even when business is not going great.
Although there are many barriers to entry to being self employed (financial security and time being the biggest two), one of the most important things that many people miss out on is having passion. In the beginning, you’ll feel demoralised and these are the times when you’ll have to fall back on your ‘why’ in order to keep going.
Start your freelancing adventure
Once you’ve got a few ideas in mind, you’re going to want to start your freelancing career as a side hustle. Unless you have a clear idea of what you want to do and plenty of money saved up on the side, I absolutely wouldn’t recommend quitting your job to pursue your freelancing pursuits.
Instead, you’re going to want to grow your business as a side hustle and not quit your job until you’re at the point where you’re consistently earning the budget that was discussed at the beginning of this article.
You’re also going to want to make sure, at this point, that you don’t fall victim to lifestyle inflation and get used to having two salaries (if you’re planning on quitting one eventually). In fact, I would save as much of the extra income that you’re making as you can in order to have a safety net to fall back on.
Now, for many people, ‘consistently earning’ will mean different things. For me, this was just a few months because I don’t have any dependants, I don’t have a mortgage, and so I am lucky in that I don’t have a lot of financial responsibilities.
For other people, this could mean making sure your side income is steady enough for a year or two or even three. Most side hustles can remain just that for months or even years before they turn into something that you’re able to live off.
A final note on going full-time as a freelancer
If this is a path that you want to take, then be sure to do plenty of research and remember that the most important part of your journey to becoming a freelancer is simply to start. Start slow, discover your skills that you can monetise (they already exist), be intentional, and have an exit strategy from your corporate job.
Being self-employed is one of the most rewarding feelings in the world. In my opinion, waking up each morning and being your own boss doesn’t even have a price tag. You’ve got this!