After a short going solo article was well-received, I thought I’d lay out some more specific considerations for becoming a freelance web developer. These are focused on web development, but could just as easily be applied in whole or part to other industries.
Making the Decision
While it may sound dreamy to just up and decide to quit your job and start your own business, it helps if you do a little legwork and make an informed decision—like reading this article. I did the former. Don’t get me wrong, it’s exciting and provides good experience, but it wasn’t the most stable way to start a business. Like anything, the more prepared you can be ahead of time, the more enjoyable the journey will be.
Make an Objective Evaluation
It’s easy to get caught up in how wonderful it sounds to be self-employed, but there’s really much more to it. It wasn’t meant to be pessimistic, but my previous entry on going solo, can help you realize that starting your own business isn’t just about getting paid to do what you love. It’s hard work. Make sure you’re ready and willing to put up with the tedious part. You have to be honest with yourself here. If you can’t get out of bed on time everyday, you just might have a hard time being disciplined enough to be your own boss.
Read some books about starting your own business. Get some realistic books about the trials and tribulations as well as the inspirational stories of rags to riches. Seeing both ends of the spectrum will help set your expectations and keep you inspired at the same time. A quick search at Amazon brought back plenty of results for books on self-employment.
Timeline and Goals
Once you’re sure it’s right for you, sit down and create a plan with milestones of how you want to achieve your goals. This plan should include all of the time before you actually start your business. Say for instance you want to be self-employed in a year, plan all of the steps you’re going to take towards that end for the next 12 months. Set reasonable goals and work towards them. When the 12 month mark hits, you should be ready to make the plunge and have most everything sorted out for yourself.
If you currently have a job and can take baby steps towards self-employment over the course of 6-12 months, you’ll be in a much better situation than if you just call in tomorrow and quit. It takes time, but it’s worth it in the long run. On the other hand, if you have the means and want to quit tomorrow, more power to you.
I’m always shocked how many people overlook creating a business plan. This is where the rubber meets the road. You can’t fool a business plan with projections and budgeting. Even If you’re not ever going to show it to anyone, you can gain good insight into your business by taking care of this.
Keep in mind that your business plan will go out the window pretty quickly once you get started. The key is that the plan itself isn’t the important part. The process of creating the plan is the part that helps you think about everything more objectively.
On the same note, do your market research. Even if you think you know, dig a little deeper than Google. You should have enough competitors to put in a spreadsheet and compare against each other. Knowing your competition is just as important as knowing yourself. (More on this later.)
Your new job starts the day you decide you want to go for it. Even if you’re not planning on quitting your day job for another year or even two, you’ll be much better off if you start planning and working towards it now. That brings us to the next steps.
Making the decision is one thing. Actually executing on your ideas is where it starts getting tough. Many of these steps assume you have a steady job and you want to make a slow and stable transition to self-employment. If you don’t have that luxury, just skip the steps that don’t apply to you. Simple, right?
Save up a minimum of 3 months salary and ideally 6 months. Then, more importantly, don’t treat this money as your salary fund. Get by using as little of it as possible. This is money is there just in case. Your first client could be a slow payer or you may have a slow month in the beginning or your computer may die. It’s better to be prepared for the unknown.
This money can also help keep you from being desperate and taking on the wrong kind of projects. Being able to turn away the wrong types of work is important to staying passionate about what you’re doing.
For this step, you just need to sit down and look at your budget. Analyze the things you might be able to live without, but also think about the new expenses you’ll probably incur. Will you need an extra phone line? Will you need a fax line? How about office space? A P.O. box? Need more minutes for your cell phone? These are all examples of new expenses you may not be expecting that can come around and bite you if you’re not ready.
You may be able to run your personal finances without logging everything, but for your business, you’ve got to keep track of every little detail. That means receipts, expenses, income, and everything. There’s no shortage of tax laws either. I’ve found it best to hire an accountant to do most of the leg work. You’ll still need to keep everything up to date so it’s easy for them though. Of course, you’ll need to know your financial situation day to day anyways. Of course, it wouldn’t hurt to pick up a book on a book on tax and legal advice for the self-employed either.
Open a Separate Business Account
If you’re incorporated in some form or fashion, this is a no-brainer. However, even if you’re not incorporated, you should keep your work and play money in different places. This makes the accounting cleaner and more organized. Just trust me on this one.
Tools & Methodology
As with any venture, planning is a huge part of the battle. Failing to plan is planning to fail. The focus here is on approaching things realistically. Chances are that you’re not going to be rolling in dough the first month, and it’s better to expect and plan for that. Better to be pleasantly surprised than caught off guard.
Hardware & Backups
You might already have a personal computer, but will it do well serving as your only machine? Is it reliable enough? Do you need a bigger monitor? A better mouse or keyboard? Your hardware can often be a bottleneck to your productivity, and you can’t afford to miss a day if your computer dies.
You can purchase an external hard drive or use a paid backup service. Just make sure you’ve got more than one copy of your important files. As a sole proprietor, you’ve got a lot less room for error. If you lose your work, you’re going to be in a tough spot.
You should be well aware of the software you’ll need to do your work, but you might be forgetting the software for running your business. What about time tracking, bookkeeping, billing, and banking? Whether you use Quickbooks or some other business software, these can make a world of difference in your productivity.
Prepare Process Rough Drafts
From sales cycles to projects to hiring, you’re going to have processes that you repeat over and over again. At some point these processes will be burned into your mind, but until then, create a checklist of steps that you can reference easily. If you’re using Basecamp, setup to-do list templates that you can reuse with each client. Repeatable processes are a huge part of building a sustainable business. They don’t have to be set in stone, but preparing them ahead of time will definitely help you get in the right frame of mind and be more prepared.
There’s an endless amount of details that you’ll need to think about. These should be taken care of long before your “first day on the job.�?
This is everyone’s least favorite, but it’s going to come up whether you like it or not. Find a good lawyer and have your paperwork done up professionally. Whether you need contracts, NDA’s, or formation paperwork, this is one of those areas where you shouldn’t try to cut corners.
It seems like there’s insurance for everything today. You should plan on looking into health insurance as well as other forms of insurance relating to your business. These will vary depending on your business and may not be necessary, but you should at least educate yourself on the possibilities.
If you’re planning on being a freelance web developer, this one will probably come easy to you. However, if you’re starting a business and can’t build your web site yourself, you should definitely plan for web site creation to take at least four weeks for a basic brochure ware site. It can be done faster, but you don’t want to rush things.
At this point you should have your legal documents taken care of, but what about letterhead, envelopes, thank you notes, fax cover sheets, receipts, invoices, and all of those other documents you end up using? Make sure you’ve got them created ahead of time. Having to create these on the fly can be a pain in the ass at precisely the wrong time.
If you’re working from home, make sure you set up your office in a fairly isolated environment. Keep it professional and ergonomic and you’ll be on your way. Don’t skimp on a good desk and chair. There’s a reason that companies spend thousands on work environments. Sitting at an undersized desk in a $20 chair from Wal-Mart is going to cost you more than you save.
Also, make sure you’ve got easy access to a fax machine and printer. I believe they even have some fancy fax software so you can send and receive faxes directly from your computer.
Buy a filing cabinet and hanging folders. Use them religiously. Make sure they are easy to access from your desk. This is one of the organizational changes that will make a world of difference in your productivity.
Notaries and Shipping
Figure out ahead of time where you can find a notary public and shipping centers. FedEx, UPS, and USPS can quickly become your new best friends.
Don’t get overzealous and go to Staples to fill up your office with junk you’ll never use. All you need for day one is paper, printer ink, a shredder, and a stapler. When you think about it, you really don’t need all that much stuff.
When you’re planning ahead, the easiest place for some great returns is through quality business development. Whether it’s getting your first gig or building a blog and gaining an audience, it will help when you finally take the plunge.
You might hate it, but it works. The key here is quality not quantity. By being sincere and meeting like minded people, you’re opening up opportunities for yourself and your network. Collaborating is much more useful to everybody than competing. Talk to other people in the industry. Talk to your—gasp—competition. Talk to potential clients or other small business owners.
Once you get going, you’re invariably going to need help. Finding a resource on short notice is tough, but if you’ve got a trusted network you’ll always be able to find help for your projects. In some cases, you may just pass leads on to your network because you’re too busy and chances are they’ll do the same. Again, think collaboration not competition.
Now that you are your business, people are buying you, not your services. For that, they need to know you and trust you. Earning trust takes time. Make sure to make the investment in that time.
Line Up Your First Job Ahead of Time
You should have some paying work lined up for your first day of self-employment. Not only does this help you stay busy and focused, but it’s a huge morale boost. If your first day or week on the job you’re not doing anything, this can negatively affect your outlook for a while. Again, if you’ve been preparing, this shouldn’t be hard to do, and it can be huge in getting started on the right foot.
Work Until the Last Second
Nobody ever said it was going to be easy. Until you quit your day job, you’ve got to have the frame of mind that you’re working 1.5 full time jobs. The preparation is the hardest part, and your time will be limited if you’re working another job. Just stay focused and keep working in your free time right up until your first day.
After the Plunge
With all of that preparation, the rest should be easy, right? Well, it will definitely be easier than it would have been without the preparation, but it takes diligence and commitment.
Keep it Professional
Get up in the morning just like you normally would. Shower, get dressed, and eat just like another day on the job. Staying in bed until 10 am will start to catch up with you. Starting the day off on the right foot can go a long way in keeping your productive and focused.
Keep Distractions to a Minimum
In many cases, you’ll be working from home. If possible, make sure the TV, video games, and other distractions are in a separate room. These can turn into a huge waste of time if they are sitting in the corner constantly whispering your name, and they will whisper your name.
Remember. It’s Personal
You’re a small business now. Personalization is important. Have a box full of thank you notes and use them. Don’t overdo it, but always remember to thank people. Even if a proposal gets turned down, say thanks for the opportunity. It’s the little things like this that make big differences.
Do the little things that show you care. By differentiating yourself and your work, you’ll be a notch above everybody else that’s just cranking out sites without caring.
If you hit a wall, take a break. Switch to a different task, but stay fresh. You can’t work 12 and 14 hour days for extended periods of time, and now more than ever, you can’t afford burnout. If you’ve worked for 6 hours straight without leaving your chair, you deserve to get outside and go for a walk.
You’re doing what you love. Don’t’ forget that. Make sure to take projects and work with clients that match up with your personality and goals. If you’re not having fun with your work, you’ll be burnt out in no time at all.
Be Selective with the Work You Accept When you’re self-employed, your clients are your co-workers. They are the main contact you’ll have on a daily basis, and if they have ridiculous expectations, say a 30 page site for $500, it’s going to cost you more in the long run. Or if they consistently miss their deadlines and aren’t committed to their responsibilities for the project, it will cause you to suffer.
Of course, most of this describes an ideal situation. It’s going to be rare that you can pull off everything. However, if you can, you’ll be well on your way to success. Also, I know that I’m horribly U.S. focused. So for any of you folks elsewhere in the world, please substitute the appropriate replacements throughout. Finally, I want to thank James Archer for the feedback and additional input.