In 2012, I was first exposed to the world of freelance strategy consultants while working for a-connect. I encountered a number of people who had opted out of traditional paths and for many different reasons (autonomy, flexibility, excitement) decided to work on their own.
At the time, I had a hunch that this was a path I wanted to explore. I’ve always been someone with shifting interests and love pushing myself into new domains. By the nature of our current job market, we cling to traditional beliefs around job loyalty, time in role, and grey-haired experience. I wanted to optimize for skills, learning, and challenge. To many, doing the same thing over and over was “putting in your time,” but to me was the goal to avoid.
After having a couple more jobs which I continued to learn, develop confidence in my skills and gain more clarity over the type of work I wanted to do, I decided it was time to make the leap. Over the past year, I’ve learned a number of things and hope to offer a sort of playbook to help others make the same leap:
Part 1: Mentally Shift to a Freelance Mindset
1. Test your Commitment: In my career, I’ve often tested out next steps in my career by telling people what that next step might be and then judging both my reaction and theirs. For example, early in my career, I would tell people “I am trying to break into consulting.” As I said it, it felt like something I really wanted to do and others acted with support. Test out “I’m making the leap to become a freelance consultant.” If it doesn’t feel right, you may want to re-think your move. You also want to challenge yourself to become comfortable with uncertainty.
The question of “what if I can’t find a project” is inevitable and you will likely face this over and over as a consultant. If that lingering fear is going to overwhelm your ability to take action, this may not be the path for you.
2. Start building momentum: For me, this meant reaching out to a number of friends and other connections who were currently freelance consultants. I had a number of great conversations and I asked them accounting, business and life questions. Some of the best advice I got is included here. You also want to start thinking about your network and identifying the supporters you have through family, colleagues and past jobs. People tend to dramatically underestimate the number of people that are rooting for them, so its good to start a list.
3. Learn about the freelance talent marketplace: I wrote a more detailed piece on the talent marketplaces, but you should start checking out and signing up for accounts on the different platforms. You can join platforms like Catalant, TalMix, PwC, and UpWork before you become a full-time freelancer. Others like a-connect, Umbrex, BTG, and Genioo require you to be on your own before joining. You may also want to see if you can win a small project on one of those platforms before you take the leap just to build additional momentum.
4. Assess Your “Future Of Work” Mindset: Jumping into the gig economy is not a straightforward transition. During this transition, many people develop a completely different mindset and perspective on work, income, money and how they live life.
5. Tame your fears: One of the biggest challenges in becoming a freelancer is the lack of structure relative to being employed full-time. When you are employed full-time, much more of your schedule is fixed and there is almost absolute certainty around income and costs. One exercise I have all people go through who are thinking about taking the leap is the fear setting exercise, which forces you to write down some of your worst fears in relation to finances and other fears of failure.
6. What if you run out of money?: Part of the fear setting exercise is to write down an income you would be comfortable with. For many people, this is the first time they think about income as something you need to continually earn instead of something that is fixed and comes in at a regular pace.
You can use the Boundless freelance target income calculator to determine what kind of income you need to make to support your lifestyle. When I went through this exercise, I became more aware of the link between my spending and the amount of income I needed to make in a way that enabled me to cut spending on things I didn’t value.
7. Set a timeline: For me, I set out as a freelancer to make this a minimum one-year commitment. I made a number of changes in my finances, including lowering my rent and changing some of my spending habits. Mentally I committed to a full year no matter if I actually landed any work or not. I looked at the year as a real-world grad school. If I didn’t have things to work on, I would focus on building new skills and pushing myself personally. My initial due diligence convinced me I would land some work, but in my head, my “worst case scenario” was a year off of work to learn, reflect and grow.
In my experience three months is too short, six months is the bare minimum and at least 12 months is about right in order to align your behavior and committment with making it work.
Phase 2: Setup Your Business Platform
1. Come up with a name: I did a few things to come up with a name —crowd-sourced ideas from friends, forced myself into a two-hour brainstorming session while flying and tested some names with trusted friends who I knew would challenge me if they weren’t right. There are a few options with names. I wanted something that signaled a firm and also allowed me some flexibility in the type of work I did (I landed on Vivo Strategies). Others feature their names (Smith Consulting, Miller Advisors etc…) and some are more specific (Lean Transformation Advisors).
Update: As you can see I changed the name after six months to Boundless. I still have my Vivo Strategies LLC name that I use as a freelance consulting firm name, but I also set up a DBA (doing business as) form in Massachusetts enabling me to do business under this name as well.
2. Get a Business Credit Card: My accountant’s advice was to either use an existing personal card solely for business expenses or to apply for a new one. I decided to use a no-fee chase credit card I already had and only use it for business expenses. This is linked directly to my Spark Business Bank (see step 4), but is good to set up before paying fees to incorporate your company so that you can expense it easily.
Update: I am now using the Chase Ink Bold business card, which you can get if you have an LLC. This is a great card for international travel (no foreign exchange fees) and 3x rewards on travel, not to mention the 80,000 points for spending $5,000 in the first three months. All with only a $95 annual fee. Grab the card here (not an affiliate link).
3. Incorporate Your Company: I used LinkedIn Profinder (or UpWork is great) to connect with local lawyers and accountants to get initial advice on business structure and finances. The consensus was that an LLC is an ideal setup for working as a freelance consultant. You can also set-up as a corporation, which is better if you plan to grow or offer other services but is more time-consuming annually as you have to file shareholder minutes. You can use services like legalzoom.com to incorporate, but beware as some states have extra requirements (such as in New York, there is a publishing requirement that LegalZoom will not cover). You typically need to file an Articles of Incorporation and an Operating Agreement.
4. Get Your EIN & Apply for a Business Banking Account: You can quickly get an EIN for your business through this government site. Once you have this, you can set up a corporate bank account. I looked extensively and Capital One’s Spark Digital Business Banking was clearly the best option for avoiding most fees. It offers free banking as long as you are comfortable banking digitally. I could not find another comparable option and be happy to use them as I have been a satisfied Capital One 360 customer for years.
Update: I’ve also discovered Azlo which is a great business bank as well. Referral code here (I’m pretty sure I don’t get any benefits for this).
5. Understand the Tax Situation: As a freelancer, the tax situation is much different than working full time. I highly recommend finding a good accountant to guide you. For starters, you are responsible for both sides of the payroll tax. In a full-time job, you only have to pay 7.65%, but as a freelancer, you are responsible for the full 15.3% (however, you can deduct the additional 7.65% from your income). This is in addition to federal and state income taxes. You also pay your taxes differently, on a quarterly basis (more here and here) directly to the IRS. I am using Quickbooks self-employed bundle. (discount/affiliate link or non-affiliate link)
6. Setup a website and an e-mail: Setting up a website is optional, but an e-mail is definitely required. I bought my domain on godaddy.com and then set up a free e-mail account with Zoho and linked it through my Gmail. I set up a website using Wix pre-paying an annual plan.
Update: I’ve since moved to this WordPress site as I got a bit frustrated by the limited flexibility of Wix and how they try to monetize add-on features. WordPress has better compatibility with external services like Stripe, forms, and MailChimp than places like Squarespace or Wix.
7. Get Healthcare: Ah yes! The only country where healthcare is still attached to employment. I suggest going through StrideHealth as a way to make sense of all the healthcare options in your area on the exchange, but the options and usability of the exchanges vary by state. I’ve had good luck with Oscar Health so far.
Phase 3: Take the Leap
1. Do it!: It’s hard to set up an independent gig before you leave your full-time job so there is definitely uncertainty in taking the leap. If possible, you can consider trying to turn your current employer into your first client, but if not possible, you have to expect to not have a clear path forward. I celebrated my leap by spending four weeks in Europe. The trip had two benefits — it helped me re-energize after a previously stressful job and also start to reflect deeper on what some of my goals are in my freelance work and start identifying the type of people I wanted to work with.
2. Define Your Focus: Part of why I wanted to take the leap to become an independent consultant was because I wanted to work on a variety of things and I expected those to shift over time. Thus, at the beginning of this journey, I was not 100% sure of my focus. This flies in the face of a lot of advice I have seen, but the uncertainty and excitement of freelancing is why I decided to take this leap in the first place. The trick is to have some external confidence about the type of work you want to do while still balancing an internal uncertainty and openness.
3. Test, refine and continuously adapt your call to action: Building on the last point, you will need to communicate what you are looking for to generate opportunities. I encourage people in all aspects of their career to develop a call to action to help signal what they are trying to do. For me, I have been telling people “I want to make the working world a better place” for years. I’m currently experimenting with the line “I work with mission-driven leaders to build great organizations” but am continually assessing how people respond to it and tweaking it to make it more specific. The trick is to have something that is broad enough to elicit a lot of responses, but specific enough to communicate that you are really excited about one thing.
4. Share Broadly: Remember that list of supporters you put together? You now want to send them an update and let them know what you are up to! Sending individual e-mails is best, but if you want to send a mass update that’s fine too! At the beginning of my journey, I sent about 25–30 e-mails to strong connections telling them what I was up to and thanking them for their support over the years. Don’t paralyze action here by thinking people are not interested in your journey. People love stories. Just think about when people would write exit e-mails in consulting, you always wanted to see where people were headed, right?
Phase 4: Embrace the Freelance Life
As you make begin this new chapter in your career, you will undoubtedly make many mistakes and have to shift your focus, your efforts and re-assess how you plan to live your life. Some of the best advice I’ve received or put into place in my own life is below:
Follow Your Excitement and Look For Opportunities Everywhere: One of the unexpected benefits I’ve xperienced from taking the leap to become a freelancer is that work is no longer a zero-sum game. Instead of being locked-in to full-time employment, there are many more models including working remotely, working part-time and one-time teaching, speaking or facilitating gigs. I see some of my free time as an opportunity to work on fun projects, learn new skills, focus on volunteering or giving back through mentoring or as a way to reach out to others and offer my support. When I see someone doing something that inspires me, I now think about how I can reach out to them and potentially start a dialogue towards working together.
Continuously Engage With Your Network & Add Value: I’ve always enjoyed connecting with different people and learning from them. I’ve also always had fun helping others out with their careers, so reaching out to my network is not something that was unnatural to me. Different things I’ve done over the years are to share interesting articles, ask people to connect over coffee, reach out to friends who are doing interesting things with genuine curiosity or reach out to old colleagues to ask how their life is.
Find Niche Consulting Firms: There are hundreds of small consulting firms who can not commit to hiring large numbers of people every year like the big consulting firms. Working with freelancers is often a win-win situation for them to work with highly-skilled consultants without having to risk committing long-term to a salaried position. I reached out to a number of small firms doing work in the space I am excited about and try to stay on their radar about potential collaboration opportunities.
Write: Writing is something that every freelancer should be doing.It’sts a great way to put your perspectives and passions into the world and for people to start seeing you as a go-to person within a specific space. I enjoy writing because I love the process of getting better at something (always room for improvement in writing!) and it helps me make sense of the world. I do a lot of writing on Medium and Quora and tend to post more deeply thought out content on LinkedIn. I’ve made some great connections over the years from people that shared my interests and reached out after I wrote an article.
Hack: To get started, try the Most Dangerous Writing App, where your writing disappears if you stop typing!
Get Ready to Explain Yourself: Since you are going off the traditional path, expect many people to ask questions about what you are doing. I’ve noticed that even if you explain the freelance world to them, a lot of people still look at setting up your own company through a startup lens. People ask me how many people I plan to hire, how big I plan to be and what my business plan is. For me, the answers to these have more to do with the type of life I am designing rather than becoming richer, bigger or more powerful. Given that this is a bit different, I’ve found that some people get a bit defensive, so I try to make it clear that this is what works for me!
Be Ready to Say Yes!: You need to be ready to move quickly and jump on opportunities. In the freelance world, things can move a lot faster than getting a traditional job. One of my first gigs got started about 10 days after an initial conversation. You often may receive e-mails from staffing organizations seeing if you are available within the same week. You need to create enough flexibility in your life such that when the opportunities can arise, you are ready to say yes!
Say No: This was one piece of advice I got from several freelancers — think about the projects you do not want to do. From my first month of trying to find work, I definitely felt myself feeling a bit insecure about not finding work yet but remained committed to not accepting work just for the sake of it. In our culture, it is hard to avoid the draw to remain “productive” and work for the sake of work, but I think there is something powerful in saying no to something okay to create the space to say yes to something awesome.
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Since 2017, I’ve been collecting the lessons I’ve learned as a freelancer, which includes case studies, how-to’s, templates and more
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