Online freelancing has taken off in a very big way. As more and more people realize the benefits of freelancing, companies are also beginning to appreciate the availability and flexibility of online freelancers who they can hire for shorter periods, rather than taking huge financial risks on hiring new staff members. However, when thinking about making the transition from a full-time day job and going freelance, most people assume giving up their day job is inevitable. It’s extremely important to understand that taking the leap into the world of online freelancing is something you can build up slowly over time while still holding down your regular job. Besides involving less financial risk, this also gives you a cushion you can fall back on in case your freelance career takes a while to get off the ground. Therefore, before quitting your job to become a full-time online freelancer, you should take a moment to ask yourself these critical questions in order to ensure that you’re actually ready for the long and bumpy ride ahead.
1. How much have you saved?
How long will your savings last if you don’t have any other reliable source of income after quitting your job? Are you comfortable giving yourself a reasonable timeline (3 to 6 months) to get your online freelancing business off the ground? Saving more money makes your leap into freelancing less risky.
You’ll also need to account for additional factors such as whether you are the breadwinner of the family. Remember, you might have to fund your own retirement account and pay for your own health insurance and taxes. You’ll need to calculate all these things before you can estimate the amount of money you need to save.
2. What is your minimum budget?
How much money do you need to make in order to pay your monthly bills? You should add in your household bills (insurance, groceries and utilities) and the cost of doing business as an online freelancer.
Calculate the amount of money you need to pay all your monthly bills and multiply the figure by 3 to 6 months. You need to save this amount in a separate savings account in order to make your transition to online freelancing smooth and successful.
3. Do you have passive streams of income?
Creating multiple passive income streams will also make the process much easier. Besides your core freelancing duties, you should have other passive streams of income or assets you can easily leverage in order to bring in more money.
Do you have any investments that earn interest or small dividends? Every bit of income will help you save up the money you need faster while easing your transition to self-employment and a steady pay check.
4. Are you willing to do whatever it takes?
Are you willing and prepared to spend weekends and nights building your online business? Clients may not come to you in the beginning, so you must actively seek them out in order to build a strong network from scratch. The amount of time you’ll spend in the beginning will determine how quickly you’ll be able to replace your regular day job’s income. You might have a lot of stressful days and sleepless nights, but in the end you must figure out if the reward is actually worth all the cost and effort.
5. Have you prepared a financial back-up plan?
Have you created a plan B just in case plan A does not work out? How will you cope if you blow through all your savings and you’re still unable to pay your monthly expenses?
It is vital to create a financial back-up for this specific event. Create a list of all the possible scenarios and solutions for how you’ll deal with this. Remember to include your family in your back-up plan if you’re the bread winner.
Quitting your day job to start an online freelancing career can be one of the most fruitful and liberating decisions you can make in your career. However, you should use the security and stability that comes with having predictable income to prepare yourself for long-term success. Although online freelancing can be immensely rewarding and beneficial, it’s not something you should jump into without careful consideration and preparation.