The decision to go freelance brings up many questions and responsibilities that can make any professional feel overwhelmed, especially if you’re a first-timer.
Professionals in Fishbowl’s advertising crowd come from various backgrounds, many of them have worked at well-known agencies and big companies. While it can be difficult to find the resources and answers to some of these questions, professionals on Fishbowl have relied on the Freelancers bowl for crowdsourced advice and insight.
If you’re contemplating going freelance and are looking for some guidance on how to take the first step, here are some tips from the Freelancers bowl to take in mind and consider:
Thinking of taking the leap and going freelance… How many hours a week should I be expecting to spend on admin? (Hunting, invoicing, tax, etc.)
“It wouldn’t matter how they pay you, a day rate is a day rate. They pay you the same amount whether they pay you via W2 or 1099. The difference is that under W2 they withhold taxes for you (just like any other job). With a 1099 you get the entire lump sum but you’re then responsible for paying your own taxes.” – a Senior Copywriter
“Depends on your pipeline and if you plan on being mostly an agency W2 freelancer or if you’re more interested in billing yourself as a consultant direct to clients. Start reaching out and see if you can moonlight a little while you’re still FTE and then leave once you get your sea legs under you.
Hunting for work will probably take up the greatest portion your time, but that hunt looks very different depending on who your target is. And, as we always say, make sure you’ve got a significant financial cushion before striking out. The world can change very quickly.” – a Creative Director
How do you stick with the freelance life during the slow times? I always find myself looking at full-time positions when money is tight, even though I really want to make freelancing work. Any advice?
“My best advice would be to get passionate about a hobby and network with other freelancers who enjoy the same thing. Mine has been rock climbing the last 4 years, which a lot of people in my industry do. Day off, get someone to go to the gym. Week off, drive to a crag and camp out. No need to worry about cash flow when you’re dangling 100m off a cliff.” – a Photographer
“Try and team up with a consultant and look for agencies with a curated creative network. It’s a new agency model that mainly uses freelancers on a project to project bases with very few full-time employees. Lastly, hustle your ass off. Reach out to startups on Instagram and see if they need design support. That should fill in the blanks.” – an Art Director
“Gotta look at your expenses. It’s important to put away a nice cushion so you can not work for a month and not worry about living on the street. Also when you have downtime use it to get out and do things with (or for) other people. Building up your network (inside and outside the industry) helps keep the jobs rolling in.” – a Project Manager
New to billing hourly. When you do, what increments do you use? Do you bill small fractions of an hour? Round up to 15/30 mins?
“Bill every hour you work. If you work over half an hour, bill an hour. If you work under half an hour and you think you’ve been fairly compensated, don’t include that time in your other hours. But don’t cut an hour up into smaller fractions. It’s small enough as is.” – an Associate Creative Director
“I only go down to the .5 hour and also have a 2-hour minimum. Sometimes small projects come in and the minimum makes them more worthwhile. I add it to all my contracts.” -a Senior Copywriter
What kind of savings account do you open to save for freelance taxes?
“Doesn’t matter. Any kind of savings or checking account is fine. I have a plain old savings account linked to my main checking, and I transfer 25% of every payment I receive there.” – a Producer
“You can’t continue to put money into the SEP after you aren’t self-employed. So you would just leave the money in there to grow tax-free. Or if you wanted to consolidate it your new employer may allow you to move the $$ into their plan. You could also roll it into a traditional IRA and continue to make (smaller) contributions.
I recommend talking with a tax professional on what would be the best plan for you. Especially if you plan on going from self-employed to FT in a set amount of time. There are tons of freelance and self-employment tax people out there.” – Freelance (former Momentum Worldwide)
Have any additional questions about going freelance? Connect and gain support from other advertising professionals in the Freelancers bowl.