Now and then I get people considering a career change asking me about life as a freelance consultant. “Isn’t that a very uncertain profession, when compared to someone in a permanent position?”
My answer: not really. Yes, you need to get your first clients/projects, but if you do good work, clients will refer you to other clients, and clients will come back. A person in a permanent position has one employer (who can go through reorganisations and other fun things you do not control), whereas you can hedge and spread the risk among multiple “employers”.
There are a number of things to consider though:
The biggest one: do great work. As small independent business, you depend on word of mouth advertising. A beautiful website, massive SEO efforts, might get you the first inquiry, but then people want recommendations. You simply write off an unfortunate purchase of a $5 book that was not great, a 1-month consulting project is different. Most internet marketing has very low funnel rates, freelancers rely on 95% conversion.
While the downside for a good freelancer is limited, the upside is probably limited as well. It is hard to scale a bespoke service business. You want to add a second person and not dilute your offering, that person probably needs to be as good as you, and as a result will need to be paid as well as you. Two times the revenue, two times the cost, the same profit. For my own presentation design business, I realised 1 employee (myself) was a great business model, and 50 probably is. But the role of making sure that 49 people have enough work and do it well, is a very different one from helping clients yourself. In short, as a freelancer, you are likely to pretty much the same thing in a few years from now as yo do today, albeit better and a bit faster. In a big corporation, you can go up the ladder and do different things every couple of years.
There are things that freelancers often overlook in their pricing: pensions, disability insurance, etc. etc. All this protection that a regular employment position usually offers.
In short, it depends…
Photo by Max Ostrozhinskiy on Unsplash