FREELANCING: IS IT FOR YOU?
by Michael
Stanton
Occupational
Outlook Quarterly - Winter 1990-91
You want to
be your own boss, do the kind of work you want to do
when you
want to do it, and earn what you feel you're worth rather
than the
salary your employer wants to pay. What
are your options?
Broadly
speaking, you have one: Go into
business for yourself. Offer a
product or a
service that someone wants and sell it for a profit. If service
is your
business, you may also earn a title to go along with it - freelancer.
The word
freelance, so the story goes, dates from the Middle Ages,
when a
knight who owed allegiance to no one would offer his lance to
the lord
with the deepest purse. Rather than
weapons, today's
freelancers
wield pens, cameras, keyboards, or other tools of the
trade they
practice. Their medieval namesakes
crossed lances in the
lists. Now, freelancers compete in the marketplace,
where success
demands not
only talent but skill in marketing it.
Typically,
we associate freelancing with such fields as publishing and the
arts. In today's market place, however,
opportunities exist in the many
other fields
for skilled people with the tenacity to pursue them. But free
doesn't mean
easy. It means risks; it means
responsibility;
it means hard work. Whatever the field,
from
freelance
writing to design to computer programming, freelancers
face
challenges.
Do You Have What It Takes?
To make a
living as a freelancer, you must recognize that you'll be
running a
business. Few successful freelancers
come to the business
cold;
freelancing isn't for amateurs. It
challenges you as a
professional
and as a person. Professionally, you
need proven skills
and talents,
an understanding of the markets that you plan to serve,
and a
clear-eyed perspective on the bottom line
Personally, you
need the
discipline to be your own boss, the persistence to follow
through in
the face of uncertainty, and the resilience to overcome the
obstacles
and rejections that are part of the freelance business.
"I
don't think people should freelance until they've been around long
enough to
learn their jobs in the corporate sense, to learn what their
clients
expect," says Jan Adkins, a freelance designer, illustrator, and
writer based
in Washington, D.C. Adkins, who calls
himself a "professional
explainer,"
has freelanced for 2 years. Before
that, he worked for a decade
on the staff
of the National Geographic. His
freelance credits include an
eclectic
collection of more that 20 books, numerous articles, and a wide
range of
design projects. To prospective
freelancers in his field, he
counsels,
"Get a job with a small newspaper or ad agency. Something that
gives you
the chance to do a lot of different jobs.
You learn by doing."
Summarize
Mr. Adkins' advice in a word and you have - experience.
Through
experience, you hone the skills and talents that clients pay
for. You gain valuable insights into their
needs. And you develop
the
confidence you need to make it as a freelancer.
Some jobs
may require specific training or degrees.
An architect or
engineer,
for example, obviously needs particular training.
Nonetheless,
experience is the freelancer's principal credential. A
freelancer's
clients look for proven skills, not a title or a string of
letters
after a name. A freelance writer, for
example, who submits an idea
for an
article to a top magazine includes "clips," or copies of published
work. A management consultant presents details of
previous projects
accompanied by
solid references. The same holds
true for
other freelancers. Ed Stern works as a
freelance advertising
copywriter,
the person who writes the words that accompany an advertisement.
He says,
"In advertising, resumes don't mean much.
It's what's in your
portfolio
that counts." The portfolio is a
collection of work samples.
Fresh out of
college, Stern joined a Washington advertising agency in
the late
1970's. He worked in a variety of jobs
before he found his
niche as a
copywriter. Two years ago he decided to
freelance
because
"I thought I could make more money, and I wanted to spend
more time
with my family," he says. Today,
he's working harder that
he was with
the agency, but his income has almost doubled.
Stern
says,
"It would have been very difficult to freelance if I hadn't had
experience. Most of what I do, I learned on the
job."
Know Your Market
In addition
to his job skills, Stern developed something else a
freelancer
needs - knowledge of his market.
Besides seeing firsthand
how an
advertising firm operates, he learned how to deal with clients
and
established the contacts he needed to start his freelance career.
"Washington
isn't a big advertising town. You need
to know people,"
Stern
says.The same thing can be said of most fields in most towns.
You have to
know your job before you can cultivate clients. Careful
preparation
can make your freelance dreams a reality.
Set goals for
yourself and
chart your progress towards them. Learn
your trade,
study the
markets, sample the waters by freelancing part time.
Part of your
planning must focus on finances. Many
people choose to
freelance
because they believe they can make more money working
for
themselves. Many do. But it may take some time. Don't quit
your job to
freelance unless you can afford to.
Build a cash reserve
to tide you
over while you make a go of the business.
How much
depends upon
your regular expenses but prudence says that you
should have
a 4 to 6 month cushion. If you'll need
equipment or
supplies,
include these costs in your calculations.
And don't forget
office
costs. Budget carefully. It will be good practice for you. When
you're a
freelancer you have to manage your own books.
Assume you
have the skills, experience, and financial resources to
make it as a
freelancer. How prepared are you to
face the personal
challenges
that freelancing presents?
You must
balance the freedom you seek with responsibility. Your
success or
failure depends on your efforts, so you must be willing to
put yourself
on the line with every job you do. The
buck stops at
your desk.
"I
think it takes a particular personality and tenacity to succeed as a
freelancer,"
says Jan Adkins. "You need a
strong ego to deal with the
demands and
uncertainties. It can be tough because
you're out there selling
yourself. Rejection is an occupational hazard."
The Business of Freelancing
Successful
businesses, large or small, demand attention to clients,
finances,
planning, and products. To handle these
tasks, large
businesses
will likely have a corporate planning office, a research
and design
staff, a marketing division, and an accounting
department. In your business, so will you. Take a look in the mirror. In
"Going
Freelance: A Guide for Professionals," Robert Laurance writes that a
freelancer
should "boil down all of your tasks to the lowest common
denominator. In freelancing, this means
concentrating
on four activities: 1) getting clients, 2) serving current
clients
well, 3) getting paid for services rendered and, 4) paying the bills
and showing
profit."
As a
freelancer, you'll be your own boss but, unless you have clients, you'll
be working
for nothing. No one will beat a path to
your door simply because
you've
opened it. It's up to you to promote
your accomplishments, your
skills, and
your talents.
To sell
anything, you need contacts; and the most common ways to
develop them
are through displays, advertising, and personal
referrals. Since freelancers sell services, displays
are of little use. Some
advertise,
but few can afford the expense. In
fact, some
question the
value of advertising in the freelance market.
"I don't
believe
advertising is very effective, at least in my market," says Jan
Adkins. "You can read an advertisement a
hundred times without
any feel for
what it's saying." Like many
freelancers, he relies on
personal
referrals to find new business.
"Identify my market and
then I
network." What is networking? Simply put, it's using you
contacts to
build bridges to others.
"Nearly
all of my work comes from personal contacts," says Craig
Storti, a
Washington-based consultant specializing in cross-cultural
training. "This market revolves around referrals
and networking."
Storti has
worked for himself since 1979. That's
when he left his
full-time
job as a manager with the Peace Corps in Nepal. He moved
to England
and worked several years as a training consultant before
returning to
the States in 19866. Not long after his
return, he did
some training
for an international organization based in Washington.
Much of his
work since then has come from these early contacts.
Persistence Pays
Networking
isn't a passive process; you have to hustle.
You can't
expect
contacts to direct work your way. Nor
can you rely upon a
steady flow
of work from one customer. "I have
some regular
clients,"
says Jan Adkins. "But there's no
such thing as a stable of
clients. You have to learn to live with
uncertainty."
To counter
the uncertainty, you must use every advantage to nurture
your
contacts and expand upon them. For
example, every 3 months,
Ed Stern
does a small direct mailing within the advertising
community. Craig Storti writes and edits a monthly
newsletter for
the Foreign
Service Institute, the State Department's training school. The
job provides
some regular income, which every freelancer can use, and enables
him "to
keep his face around the Institute," he says.
Without this
persistence, a freelancer can add a new phrase to an old
maxim: Out of sight, out of mind - out of work.
In some
freelance fields, networking provides few advantages. "For
the kind of
writing I do, networking doesn't lead to many jobs," says
Linda Stern,
a freelance magazine writer. Magazine
editors receive
hundreds of
queries and submissions for each article that they buy.
writers such
as Stern first must develop an idea, do some basic
research,
and then convince an editor through a well-written query
letter that
the prospective article is just the thing that readers want.
"Many
freelance writers don't like the marketing they have to do," says
Stern, who
learned her craft and the discipline of deadlines as a reporter
for the
"Journal of Commerce."
"What surprised me was how much I enjoy
selling."
Setting Your Rates
When Stern
makes the sale, the magazine usually sets the terms.
That's the
nature of her market. "There's
little room for negotiation in the
markets I
serve," she says. Freelancers in
other fields have more freedom to
determine
the fees they charge.
Here, the
freelancer is less the writer or artist and more the
entrepreneur. You must calculate not only the cost of the
job itself
but a
portion of the expenses you incur to maintain your business,
such as
business supplies, and the taxes which you, as a self-
employed
person must pay. Robert Laurance writes
in "Going
Freelance,"
"The rule of thumb among accountants and professionals
is that a
freelance professional should earn a net profit margin
before
personal expenses of between 50 and 70 percent. Of course,
the higher
the better. So, your business expenses
should not exceed
30 to 50
percent of your gross income." For
example, if your gross
income is
$30,000, your expenses should not exceed $10,000 to
$15,000. The accompanying box provides more
information on the
startup
costs for freelancers.
For many
freelancers, pricing their work presents problems. New
jobs
translate into different challenges and, consequently, different
fees. Depending upon the project, you might charge
by the job, the
day, or the
hour. Be careful about selling yourself
short. Misty
Kuceris, a
management consultant in Springfield, Virginia, asserts
that
"many freelancers underprice themselves.
Always assume that
it's going
to take longer than you think it will," she says. "Plan for it
and price
accordingly."
"For
me, pricing is always difficult," says Jan Adkins. He agrees that
equity
should guide a freelancer's negotiations but says that you can't
forget that
the business world is a competitive arena.
"I
proceed
along the lines that if a freelancer is giving a client a good deal,
he's giving
himself a bad one," he says.
"The client should always wince
when he
hears your price. He can even
argue. Then you can negotiate. But
basically
you have to remember that in the market place someone who asks for
too little
is asking for a lack of respect."
Hand in hand
with the problem of pricing work is the problem of
getting paid
for it. Every business has to deal with
deadbeats-clients who
don't pay
their bills - so you'll have to develop strategies to deal with
them. But the perennial problem that plagues
freelancers is cash flow -
getting paid
quickly and fully. Says Misty Kuceris,
"If freelancers don't
worry about
cash flow they won't be in business for long."
Just as most
households do, businesses generally pay their bills
monthly. They may settle their large accounts first,
which means
"freelancers
are usually at the bottom of the ladder as far as being
paid,"
says Linda Stern. But while you wait 30
days for payment,
many of your
creditors may not be as patient.
These
concerns have made Stern a better money manager. "You
have to get
used to the ebb and flow of your money," says Stern,
who's fortunate
to receive some regular income from a syndicated
column that
she writes. Nevertheless, she states
that "it is a
continual
problem. I might go 4 to 5 weeks
without being paid for
articles
I've sold."
The Freelancer's Tradeoffs
Let's say you're
ready to freelance. You want the
independence and
flexibility
and financial rewards of being your own boss.
You have
the skills
and experience necessary to do the job.
You've researched
the market
and determined that a need exists for the service you can
provide. You have the cash to sustain you while you
make a go of
the
business. What else should you
consider?
Every choice
has tradeoffs. Every choice has
risks. As a freelancer, you'll
have to face
them - alone. If you're single, you
have only yourself to worry
about. If you have a family, they must face the
uncertainty as well.
Outsiders
might envy the flexibility of the freelancer's schedule. For most
of us, the
hours from 9 to 5 belong to our employer.
Freelancers
set their own hours. But freelancing
demands discipline.
Aside from
talent, a freelancer's principal asset is time. Waste it, and
you'll soon
be working for someone else. Says Jan
Adkins,
"Freelancing
is a job of time management; it encompasses all the
problems of
managing, apart from any writing or design work I do."
In some ways
a 9-to-5 schedule provides a freedom that the
freelancer
sacrifices. At the end of a day,
employees can set their
work aside
and head home. But the freelancer
sometimes finds it
difficult to
stop working.
Many
freelancers work out of their homes, which can make it
difficult to
separate work and leisure. Paul
Treseder, an architect,
has a
basement office in his home. He says.
"There's always work to
do , which
makes it harder to let go." He
sets rules for himself to
help deal
with the workload and the pace. "I
will work nights, but
not on
weekends. I have to have time for
myself and my family," he
says.
Some Doors Close, Others Open
In choosing
independence, some freelancers close the door on certain
options. Treseder says, "Basically there are tow
ways an architect
can go -
into corporate architecture or into a small design firm.."
When he
started his own business, he knew that he would be
excluding
himself from the big projects. "A
small firm can't handle a
certain
scope of work. There is a frustration
to be limited to the
small
scale," he says.
Ed Stern
echoes this concern. "When you
freelance in advertising,
you don't
always get the best assignments.
Advertising firms save
those for
their own people."
While
freelancing might narrow some options, it broadens others.
As a daily
reporter, Linda Stern worked the business and economics
beat. "If I had continued reporting, I'd
probably still be covering the same
stories,"
she says. Today she writes about a
range of topics. And the sales
skills she
has developed have presented her with new opportunities. She
teaches a
class on freelance marketing at a local university. "It has really
been a
period of great growth for me," she says.
"Freelancing has given me
the
flexibility to try new things." Although freelancers work closely with
their
clients on projects, they essentially work alone. Ed Stern laments
that working
alone keeps him removed from the close cooperation inherent in
advertising.
"advertising is a team-oriented business," he says. "Ideas
build on
other ideas," All though he
consults regularly with his clients in
agencies, he
says, "I miss the camraderie."
Jan Adkins acknowledges
similar problems. "I miss the
cross-
pollination
of the workplace and the excitement of working with
others,"
he says. "I even miss the
hassles. Sometimes I'll sit back
and argue
with myself." Adkins also says
that rejection is easier to
take when
you're part of a team. "Rejection
is part of the business," he
says. "But it hurts less in groups."
Ask some
freelancers what they've sacrificed by working alone and
the answers
might surprise you. "one of the
toughest things for me
is that I'm
away from the corporate politics," Linda Stern says. While she's
paid for her
work on acceptance, she still wants to see it in print. But
even if a
magazine accepts a story, there's no guarantee that it will be
published. In many publications, writers contend for
space. As a
freelancer,
her absence from the newsroom means that she's not there to fight
for her
stories.
Freelancing: More Than a Job
Misty
Kuceris has done a variety of things since she began working
for herself
- freelance writer, TV producer, management consultant.
People
frequently ask her what the freelance world is like. She
responds,
"In choosing to freelance, you have to understand that
you're not
simply choosing a job, you're choosing a lifestyle." When
you choose
the independence that freelancing affords, you have to
accept the
responsibility and uncertainty that go with it. This means, she
says, that
"you need self-confidence. You
have to set goals and keep focused
on
them. Never risk what you can't afford
to lose. Above all, do what you
enjoy
doing. That's the point of working for
yourself."
Freelance Startup Cost Worksheet
This
worksheet assumes that you will begin by yourself and work
from your
home. The figures in the example are
based on rough
averages
determined from the experiences of the author and
freelancers
whom the author has interviewed as well as average
national
figures on costs of offices supplies, rents, insurance
coverages,
licenses, and the like.
Category/expense Sample estimate
Your estimate
______________________________________________________________
Basic
equipment $1,000 __________
Profession-required
supplies1 500 __________
Office
furnishing
Furniture2 1,000
__________
Supplies3 500
__________
Machines4 500
__________
License and
fees
Occupational license 100 __________
Business permit 10
__________
Legal fees5 500
__________
Accounting fees 250
__________
Insurance
Business telephone6 100 __________
Umbrella insurance 70 __________
Deposits
Business telephone7 300 __________
Utilities 50
__________
Miscellaneous 500 __________
TOTAL $5,380 __________
(1) Artists'
materials, engineers' blueprints, etc.
(2) Desk,
chair, bookshelf, filing cabinet,
typewriter/computer/printer stand, etc.
(3) Business
cards, stationery, copier paper, pens, paper clips.
(4) Purchase
prices of an electronic typewriter and calculator plus
rental cost of a copier. Can reduce this by renting all of them
or using any machines you already own.
(5) For
incorporation, drafting a sample independent contractor
agreement, reviewing your plans. Don't try to do this without an
attorney.
You wouldn't do personal brain surgery, so don't try
to be your own "Legal Expert."
(6) You need
to separately insure all of the equipment and furniture,
supplies, etc., used in the business.
If you have a fire or
flood in your home, and the insurance
company finds out that part
of it was used for business, it may not
pay for that loss under
a regular homeowner's or tenants'
insurance policy. This amount
is only for a deposit; this insurance
usually costs about $250 to
$450 for $30,000 worth of coverage, more
if you insure for full
replacement value.
(7) A low
estimate for how much a local telephone company will
require as a deposit and installation
charges to bring one line
into your house for business
purposes. Even if you incorporate,
you may be able to use your home phone for
your freelance
business as long as you avoid advertising
in Yellow Pages or
local media. If you rent office space, of
course, you will have
to pay business phone installation charges
and deposits.
Source: "Going Freelance: A Guide for
Professionals," by Robert
Laurance,
copyright 1988, Robert Laurance.
Reprinted by
permission
of John Wiley & Sons, Inc., 605 Third Avenue, New York,
NY 10158.