Transition strategy from full time job to freelancing

Question

I have been working full time employed since my university in different IT roles for almost 5 years. After I had to do a lot with freelancer developers, I realized that IT freelancers, no matter if developer, project managers or consultants, are not only earning at least, minimum 150 % more per hour than myself (including sick days, vacations and so on, I did the math...) but have also more freedom and flexibility and far more variation in their work life.

Thus, I considering becoming an IT freelancer. However, of course I understand, that it comes with a risk of not getting enough or any work from other companies and thus not getting any money at all. What is a more safe way for a transition from a full time employment to freelancing? Is it usual for example to switch the current full time employment to a part time employment to be available, lets say, every Wednesday for your customers in your freelance role? Or is that unrealistic since the limited availability will not be enough for most, if not every, potential customer? Or, is the only viable alternative to leave the current full time job and start freelancing full time?

Answer 1

What is a more safe way for a transition from a full time employment to freelancing?

The safest way is to do freelance work on the side (nights, weekends) while continuing to hold down your full time position.

Do that until you have a sufficient client base and reputation to go to full time freelancing, then drop your current job.

Before you begin, make sure your current work contract permits this sort of side work.

This is how virtually every freelancer I know started.

Answer 2

One of the largest problems with going freelance, as you have noted, is the inconsistency of your workload. Some weeks you may be beating contracts off with a stick, others you could be seeing if you have enough saved to scrape together rent/mortgage payments.

The best advice I ever got when considering going freelance was to make sure you know enough people. Exposure is much more important than ability (though ability is still important) because potential customers will prefer you if they know the quality and speed with which you work. 5 years is a decent amount of time if you've been in a position to meet multiple people from different parts of the industry, but I would still say it's likely too early to go freelance.

Answer 3

You say you did the math and that freelancers earn more than you. Did you do the math correctly? I.e. a freelancer doesn't have sick days or vacation days, if you don't work (either due to illness or vacation) you don't get paid. Also when you're a freelancer you're also entirely responsible for paying your own taxes, social securities, building up your own pension and buying business insurances. Your employer has a lot of "hidden" costs that he pays for you.

When working as a freelancer usually you'll be working on your own either from home or in a rented office unit. Have you thought about working on your own for extended periods of time without contact with others?

I moved to a different country a couple years ago and for the first year and a bit I worked as a freelancer for my then employer. It was nice to be able to start in a new country with a solid financial foundation however I did find it an enormous hassle to have to handle the "employers" (financial) side of things. And even though we did have daily contact through skype it's still not the same as working in the same office as the people you are working for/with.

But if you really feel your ready and up to the challenge and have thought it through thoroughly the advice @Joe Strazzere and @GOATNine give are a solid starting point. Start doing it on the side and see where it rolls from there.

What I did miss in both other answers is the following: Do make sure to check your current employment contract if it's even possible and where necessary get approval from your current employer before going freelance. Most contract will have a non-compete clause which might prevent, or at the very least limit you to/exclude you from (a) specific market(s), from (even) going freelance. You also don't want to burn bridges with your current employer as they might be a big behind the scenes player with a large network who could make it very hard to get work, so make sure to include them in your planning stage so that they can also make suitable arrangements.

Answer 4

In order to ease the transition, there are alternatives to already present answers:

• Consider finding a time-based contract, with an associated daily/hourly rate, rather than a fixed price for a well-defined task.
• Consider finding a full-time contract with one customer. Lots of companies in the IT domain hire freelancers or contractors on a 40h/week basis.

• Use head hunters - yes they will add significant markup to your rate, but again it will help you to start.

• Don't be too "greedy" for your first contract. A daily rate just below the market standard would help.

• 5 years experience is enough in IT area - I started freelancing after 3 years.

An easy transition will help you to:

• Deal with legal aspects (Create a Limited company, etc.)
• Extend your network for upcoming contracts.