Taking the freelance plunge: My first 6 months, my next 6 months

It’s been six months since I took the plunge into freelance consulting. I’ve dipped my toes into the pool before, but only temporarily when I was in between jobs. This time it’s the real deal, which wasn’t my initial intention when I got laid off in July. My plan was to freelance while looking for another job, but because of the lack of research jobs in Portland, I decided to give freelancing a shot.

I didn’t really have any goals other than to stay busy, pay the bills, and do the minimum required to stay afloat. It’s been enlightening to reflect on what I’ve done, what I’ve learned so far, and what I plan to do next.

First Six Months: What I’ve Done

• Announced to the world that I am freelancing – updating my website (making it more about my business versus a general professional website/portfolio), and contacting everyone in my professional circle to let them know. LinkedIn was great for this.
• Upped my networking game, both in-person and online. Lots of coffee meetings with business owners, recruiters and other freelancers.
• Established working relationships with four design/research firms (three in PDX, one in SF) that call upon me for project-based contract work.
• Landed my first direct contract with a Fortune 50 company! Definitely my greatest (and least expected) accomplishment so far.
• Completed six user experience/design research projects.
• Provided UX and website consulting to four small businesses (not something I set out to do, but a byproduct of working in this field and gaining relevant knowledge).
• Hired an attorney to review legal documents (contracts, SOWs, etc.)
• Registered my business name (Amy Santee) with the State of Oregon.
• Began using QuickBooks Self Employed to manage my business spending and income and estimate my quarterly taxes.
• Paid quarterly estimated taxes.
• Purchased business insurance.

First Six Months: What I’ve Learned

• Freelancing is a lot of work. At first, you wear all the hats – consultant, admin, finance, operations, marketing. There’s a lot more to it than just doing projects. Business development alone – i.e., finding work, networking, marketing, etc. – is a huge part of the job. Over time and with enough resources, you can take off some of these hats and give them to others.
• Freelancing takes a lot of commitment, willpower and determination. On days when something doesn’t go well, I want to give up. Other times leave me feeling like I’m really accomplishing something and making it work. A supportive network of friends and professional acquaintances, not to mention self confidence, help get me through it all.
• There are A LOT of start-up costs involved: fees for registering a business, business insurance, attorney and CPA fees; costs for office furniture, equipment and supplies; costs for website development and maintenance; and all the time needed for networking, marketing, and business development. Sometimes I wonder if it’s all worth it. Then I remind myself I want to do it the right way and cover all my bases.
• Networking (in-person and online) remains as important as ever for spreading the word, getting work, and meeting helpful people. For me, the time I spend on networking ebbs and flows depending on where I’m at professionally, but I know it’s something I should never stop doing.
• I need to get better at accurately estimating how much time certain tasks will take – especially data analysis and reporting. I recently underestimated this phase on two of my projects, which bit me in the ass in the end because I ended up working significantly more and losing money by working at a lower rate. I think this will get better over time and with more experience.
• Project budgets have also caused me some frustration. I try to be as thorough as possible but somehow I always miss something, especially when travel is involved. My agency experience with project management focused on billable hours is a help here.
• It’s important to be 100% clear on process, roles, responsibilities, tasks and outcomes, and to call these out explicitly in contracts. People do things differently when it comes to research, design and consulting, and everyone makes assumptions. It’s crucial to root these out and define everything, even if it seems like overkill. For example, one project required a deliverable of an “8 page report.” In hindsight, I should have asked more questions about the content, format and other details. This also applies to how many hours you expect (or prefer) to work in a day.
• Make sure clients are totally clear on the engagement. In November, I submitted a project proposal that the client accepted. After a few weeks, I realized the client was not aware of a few key aspects of the proposal, and had made some inaccurate assumptions. When these were discovered and changes had to be made, the budget increased by almost 10%. The project ended up not happening because the client didn’t have the money to pay for it. I never understood how this happened, but it would have helped us avoid wasting time if we had been clear on these things from the start.
• It’s important to stand your ground on how you like to work and what you want to get paid. Just be able to make a strong argument for why. If you want to charge X amount per hour, you need to be able to say why that’s your rate. In one exchange, my rate was seen as too high by a client. I responded with the reasons for my rate, and the client accepted it without further discussion.
• I’ve benefited from following my intuition about people and companies. If a relationship feels out of balance, it likely is. If someone seems sketchy and doesn’t respond to your emails, they’re not worth pursuing. If someone asks you to do more than what was in the contract, don’t work with them again.
• Tap into your network. I’ve relied a lot on others to answer questions about freelancing and provide advice. Also, the more people who know I’m freelancing, the more opportunities I have for work.
• An online presence is key. This includes a website, portfolio, LinkedIn, and accounts on relevant social media. Over time, jobs will come to you because people can find and learn about you, and whether or not you can solve a problem they have (this is how my Fortune 50 client found me).
• All those fat checks that come in the mail DO NOT mean I am making bank! I still have to pay taxes and set money aside. Paying taxes seems worse than when I did it as a W2 employee because someone else isn’t doing it for me.

Plans and Goals for the Next Six Months

• I am working on developing a tool in Excel that will help me create accurate time and budget estimates for projects. I plan to use it when creating project proposals and keeping track of hours spent to protect myself from losing money and make sure I’m being consistent for myself and my clients.
• Hire a CPA to do my taxes and get my business finances in order. This will save me time and headaches trying to figure out what category something goes into, if something is considered a depreciable asset, filling out forms, etc.
• Continue networking to grow my business and meet/learn from all the awesome people out there.
• Say no if I can’t or don’t want to do something.
• Negotiate contracts so they aren’t just worded in favor of my clients, but also consider my professional needs and goals. Having an attorney will make this much easier.
• Change from a sole proprietor business to an LLC to make my business more official and separate myself (and my money) from my business.
• Only work with people and companies who value my time, perspective and expertise.
• Keep hustling! That’s the only way this is going to work.