Are you considering converting your freelance business into a full-time company? If so, you are heading in the same direction I was headed two years ago. Before we officially even begin this article, I’d like to encourage you by saying: “Go for it!”
Also, before we begin, I would like to disclose the fact that I am not the designer for Nike. I am not the creator of the Apple logo, nor have I been chosen to design the next Olympic icon. I am a regular guy, living a regular life, paying regular bills, and doing regular things like the majority of people out there.
That being said, I have learned a few things from doing small, freelance work as well as owning a small business. Today, I would like to freely share some of those lessons that have helped me convert from freelance to full-time.
There Are Two Types of People: Bosses & Employees
One of the first lessons I learned was that, in this world, there are two types of people: Bosses and employees. Neither one is more valuable or better than the other, but knowing this simple truth will help you to determine what type of person you want to be. As a freelancer, I always thought of myself as an employee to multiple bosses.
As a freelancer, I was able to have peace of mind because, at the end of the day, I was only concerned about one power bill, one water bill, one rent payment, etc. As you consider moving out of your current job or converting your small freelance practice into a full-time company, take into consideration what my father has always said:
There is a big difference between signing the front of the check and signing the back of it.
As an owner of a company, you’ll quickly find your expenses multiplying. There will be new sources of anxiety and frustration that you didn’t have to worry about while working from your home or being employed. However, there are some great benefits to being your own boss, like making your own schedule, charging a higher rate, and deducting business expenses.
If You Don’t Spend a Lot, You Don’t Need To Make a Lot
This is a fine lesson my grandfather taught me whenever we visited, and it could not be more true. As you consider converting your freelance business into a full-fledged company, remember the days when you were just starting out: Every penny counted.
After I first started my company, when I needed to search for flights, I would spend weeks tracking them and finding the cheapest rate. I remember weighing the cost of cable or satellite: How about neither? I cut the TV options and got the smallest internet package. I even kept the temperature at my house at about 66˚F in the winter and 86˚F in the summer.
Now, I’m not saying you have to be so drastic, but when considering a switch from freelance to full-time, continue to keep a tight budget in mind. You will be able to reduce both anxiety and debt if you practice keeping your costs to a minimum. Of course, you don’t necessarily have to be so tight with money. Others start companies in much different ways, but that is when I had to consider this next point very carefully:
Figure Out Your Goals Before You Begin
Let me start this section with a story: There were once two people who each opened their own company at the same time. One of the businessmen worked long hours into the nights and weekends, whereas the other tried to take Fridays off. One charged a price as high as the market would bear, and the other charged only the amount they needed. One targeted large companies with big budgets, while the other helped small community businesses. One of them may retire early and make it onto a Fortune 500 list. The other probably won’t.
When starting your business, you will need to figure out your goal for your company. Personally, I didn’t want to make the sacrifices needed to achieve the world’s standard for success. I wanted to make sacrifices to achieve my own view of success. Because of this, I am able to have a very flexible schedule and a very spontaneous life. You will also have to decide what you want out of your company.
Save Up Before The Switch
Before I made the switch from freelance to full-time, a mentor encouraged me to save about six months of living expenses. I thought to myself, “If worse comes to worst and I don’t make any money, I have six months to figure out something new.” That’s a lot of time for experimentation and flexibility.
When you are starting a company, there will always be risk involved. Having the cash as a backup allowed me to take risks that I wouldn’t have normally been able – or willing – to take.
Become A Self Motivator
You have probably already learned this lesson, but – just in case – I think it is important to mention: A client will rarely thank you. They will, however, make sure you know when there is a mistake. In the past, when I received an email with a list of changes for a project I had worked on, I would get so depressed, taking each bullet point as a punch to the gut. In order to run my own company successfully, I had to change my thought process.
Instead of viewing an email like this as a negative, I now simply note the changes and consider every item the client didn’t tweak as a “Great job!” and “I love it!” I give the client the benefit of the doubt and assume that they just forgot to encourage me with positive feedback. I consider all emails from clients as them thanking me, unless, of course, there is something specifically wrong being addressed. The client may not seem grateful, but if they aren’t complaining, I will continue to assume that they are satisfied. This mindset really helps in the creative business!
If You Don’t Ask, You Already Have Your Answer
Meeting a stranger and asking them to write you a check for thousands of dollars is not always easy. When I was starting out in business, discussing prices was a little intimidating to me. What if they said “no” or argued that what I was offering was not worth my price? Here I have a business that I’m trying to grow with my own two hands, and a harsh “no” is almost like a slap in the face – right?
I suppose it depends on whether or not you take these things personally. However, I learned that if I didn’t get over my fear of asking, then I already had a negative answer. I wasn’t giving the client an opportunity to say yes. Realizing this, I went for every client. From mom-and-pop stores to big hospitals, I wanted to give everyone the opportunity to say yes.
If You’re Selling Every Day, You Can’t Not Make Money
I find this to be the truest point of all. When I was a kid, we were encouraged to go door to door and sell tubs of cookie dough to our neighbors at exorbitant prices for school. The crazy thing is, people bought it. Sometimes girl scouts stop me to sell me cookies, and I buy them. Why? Who knows. But, if you’re selling it, someone is going to buy it.
Every time I would try to sell a freelance job, I would think of it as an opportunity to learn how to talk to potential clients. And you know what I learned from the experience? Stop thinking of everyone as potential clients.
I have found that it is important to focus on a relationship first. At the end of the day, some of the relationships I’ve made with clients and non-clients are worth so much more than a finite dollar amount.
Contracts. Period.
If there is nothing else you take away from reading this article, I hope you do this: Create a legitimate contract and have every client agree to it before starting work. Have you ever heard of the phrase, “A good fence makes good neighbors?” I like to think:
A good contract makes good friends.
I have been encouraged to get a contract signed regardless of who I’m working with: Friends, neighbors, and even family members. Anytime professional work and money are being exchanged, get a contract. It may seem silly, but if the person won’t sign it, then it may be for the best that you don’t work together.
Stop Working For Just Anything
Have you learned a thing or two? Are you about ready to make the switch? First, consider one of the lessons that was the hardest for me to learn. When I started out freelancing, I worked for anything.
- Work for trade? Sure.
- Work for 50% discount on an already extremely low price? You betcha.
- Work for a portfolio piece? Of course!
This might work from time to time as a freelancer – to pay the next bill or to try to target a bigger fish. However, when you are running a company, this is the first habityou will have to break, and fast! You will have to begin thinking of you and your work as worth its wage: No more undercutting yourself.
Consider What Is Important
One of the most important people in my life is my wife. Without her motivation and encouragement, making the switch from freelance to full-time wouldn’t have happened. I consider our relationship to be more important than the business. There are many people who prioritize their business, putting it before their family, and there are also many unhappy people. As you make the switch, consider your priorities and what is important to you.
I encourage you to leave a comment below about a tip you’ve learned or advice you currently practice as you try or are successful in switching from freelance to full-time. Let’s try to help others with their goal of starting their own company.
Ben Homan is the founder of Skillful Antics: a web design, online marketing, and multimedia company located in Clermont, FL and Nashville, TN.