4 Months Self-employed: 10 Lessons Learned

The transition from working for an employer to being self-employed does not happen over night. I took the leap at the start of 2009 and the experience has been both amazing and enlightening. Over the last four months, I’ve worked on some incredible projects with very talented people and learned a lot of lessons along the way. Here is my top 10 list:

1. Set a routine. Anxious to start bringing in paid work and getting personal projects off the ground, I quickly overbooked my first few weeks of being self-employed. The more, the better, I had thought. Mornings gradually started later while I continued to work long nights. The fix was to incorporate some kind of daily routine. Having a set schedule has helped productivity and ensures that I’m available for e-mails, conference calls, or other client needs throughout regular work hours.

2. Archive everything. Maintaining a well organized work history is essential. I store client discussions, contact lists, project notes, estimates, invoices, expenses, inspiration, and many other work related items so that I can easily reference them in the future. There are a number of applications and services I use to help me keep everything in order but the main ones are: Things for project to-do lists and notes, Coda for development and site organization, Billings for time tracking, estimates, and invoices, Netvibes for following web news, Apple Mail for checking multiple e-mail accounts, and Time Machine to back everything up.

Out of all the different bits of info I keep, project hours is one of the most important. My previous jobs led me to believe that time sheets served little more purpose than to prove I was working. However, since being self-employed, I’ve found it critical to log all of my hours in order to monitor current project budgets as well as create estimates for upcoming work. I use Billings to make new slips for each project task and jot down what was completed and how long it took. I also break the slips down by categories so I can see how much time was spent between research, account management, design, development, and so on.  At the end of a large project, it’s not uncommon to have a PDF upwards of 20 pages long with all of my task notes. Not only do clients appreciate seeing exactly where my time was spent but each completed project gives me a very clear and detailed outline for comparing future estimates with.

3. Find the work/life balance. This is probably the most important, and difficult, lesson to learn. I also don’t believe this is something you can ever perfect; it takes constant effort to stay balanced. There is a fine line between being dedicated and being obsessed. When working for an employer, it’s much easier to put in your hours and then not worry about the job after quitting time. When self-employed, you have a huge amount of responsibilities and it becomes very easy to justify spending any spare time on your work, whether that means getting ahead on a project or lining up future jobs. Personally, this is part of why I love being self-employed; I enjoy the satisfaction of knowing my success, or failure, is a result of my own doing. However, the danger is when working too much begins to interfere with seeing family, friends, or taking a little break. It all comes down to finding your own balance and keeping everything in moderation.

I’ve also learned that my mood is often tied directly to my work and that can be both a good and bad thing. On the one hand, the pressure to continually make progress has been a strong motivator and, as long as I have met my goals that day, I can go to bed with an accomplished feeling. On the other hand, inevitable slow patches or days that simply don’t go well can weigh heavily on me that evening or, worse yet, all weekend if it is Friday. Finding your “shut off” switch can really be valuable to both your personal and professional life. Go for a bike ride. Play a video game. Do anything that will shift your mind away from work at the end of the day.

4. Communicate as often as possible. Always keep clients informed about of your progress and how you plan to meet the next milestone. Frequent discussions will bring up any questions you or the client may have throughout the project and will help reduce client surprises and revisions. It is also a good idea get to any kind of feedback documented in writing. For example, say a client gives the ok on a design but later decides he or she doesn’t like the look once development begins. By having the previous design approval in writing, it’ll be much easier to steer the project back to the original agreement or justifying added costs if the client insists on new changes. Projecturf is a great tool for managing these types of discussions. I’ve tried Basecamp, activeCollab, and a many similar services but Projecturf is, by far, my favorite.

5. Pay is not everything. When considering a new project, also think about what you can learn from the job and what the client relationship is like. Will the work be an exciting challenge or boringly simple? Does the client seem easy or difficult to deal with? These questions are just as important as what the project will pay. Burnout is usually the cause of overly easy projects and/or doing work for nightmare clients. Taking on enjoyable, meaningful projects for people who appreciate your work will keep you and your clients happy.

6. Dedicate a few hours each week to self-promotion. Write a new blog entry, check in with past clients, join in online web discussions or local meetings, spread the word and let people know you’re available for hire. Doing the work is only half the battle; you need to line up your next projects and keep your calendar booked in advance. Clients want to see life in the people they hire and regularly updating your site with fresh content is an easy way to do that. Posting tutorials or code examples is also a great way to substantiate your work knowledge.

7. Find your zone. One of the many benefits I’ve found in being self-employed is that I feel like I am working toward my own goals rather than someone else’s now. To remind me of life dreams and things I want to achieve, I have family photos and motivational art decorating the walls. Having a creative, inspiring work environment can be a wonderful aid to productivity. I’ve also learned that music can play an important role. It is much easier for me to work (especially when coding) with some kind of background beat instead of listening to the clacking of keys and mouse clicks. Everyone has their own preference but I like songs with no lyrical content, or in a different language. Movie soundtracks, for example, can be very inspirational without the distraction of voices.

8. Separate business finances from personal. Setup a business-only bank account and credit card to help divide business income and expenses from personal. Take the time to record all business costs throughout the year to save yourself from digging through receipts come next April. Usually, a good first step is to meet with a local CPA to find out exactly what you can and can’t write off. It’s worth the effort to figure out how to properly deduct as many expenses as possible, otherwise taxes will quickly decimate your income. I’ve been used to having federal taxes taken out of my paychecks before receiving them so it was rather painful to send out both my 2008 taxes and this year’s quarterly estimated taxes this month. The good news is there are many expenses you can deduct when self-employed like health care, hardware and software, office rent and supplies, and other work related items. Of course, these deductions need to be directly tied to your job but you’d be surprised how quickly they can add up.

9. Passive income can help stabilize cash flow. Most of my work is charged based on the project, not hourly, with 50% up front and the remaining 50% upon completion. Obviously, there are often gaps with no pay at all and that can be worrisome with monthly bills such as housing, health insurance, etc. Passive income can be a great complement to your main sources of revenue because it often follows a consistent pay schedule (i.e. affiliate advertising) and continues to work around the clock.

10. Be professional. Don’t write e-mails like you’re texting from a phone. Don’t post wild weekend photos on your work blog. Don’t spend all day on Facebook (or don’t create an account and eliminate the urge altogether!). Use common sense and present yourself and your work in a professional manner. If you end up working with a client for a long time and become good friends, there’s usually room to be a little more informal, but first impressions are everything.

  • sanjeev

    hi,

    good postiing. i definately have to learn a lot.

    By the way, i find social networking like facebook, twitter very useful as well. Just need to manage time properly i guess. I have had completely unknown people in my social network turned out to be clients.

  • http://www.adrianpelletier.com Adrian

    Social networking can certainly aid in generating work, and would go along with what I stated in my 6th point about self-promotion. My issue with services such as Facebook is they can often consume so much attention that they detract from actual work time. You can forever network and meet potential clients but it won’t do you any good if the work does not get done. Like you said, Sanjeev, managing time properly is key.

  • http://www.killerinstinct.co.za Dele

    Great article. I love reading every point. We all struggle with these things. thanks mate :)

  • http://www.khwebdesign.net/ Kent Heberling

    Congrats on being self-employed. I tried and failed at that last year. You definitely mentioned a few key points which I didn’t at all consider, especially “Pay is not everything.”

  • http://twitter.com/martinschaer Matin Schaer

    Great article. I’ll need to have it at hand. I’m starting a self-employed run here at Costa Rica and can’t miss a thing.

    Have you tried TextMate for coding? I just bought a Mac and am trying TextMate. Why is CODA so wonderful?

  • http://www.adrianpelletier.com Adrian

    @Martin: I actually used TextMate before Coda and it’s a great app for quick tasks in a simple editor. There are also bundles that you can use to your advantage. Coda, however, is on a whole other level. Having the FTP and preview built right in are a huge timesaver and I like the site organization. I never use the built-in CSS tools but I suppose those could be useful to some people. The included books are all right as well but their information is nothing you can’t find on Google. I’m only touching on the main features of Coda but it has a lot more to offer.

  • http://jessycormier.com Jessy Cormier

    Hey Adrian, this was and will be very useful to me, thanks for the great tips and your perspective on being self-employed. Continue the great work, and i look forward to your future posts :)

  • http://www.macpixels.com martin rivard

    great post Adrian!

    i found it while reviewing and downloading your animated icons CSS snippet. thanks for that too!

    i’ve been a self-employed freelancer, designing and programming websites since 1995, so here are some observations from my 14 years experience:

    — your network of collaborators / friends / business acquaintances / etc will bring you the bulk of your work projects.

    cold calls to unknown companies don’t work all that well.

    so, nurture and grow your contacts network all the time, every chance you get: give a call to fellow designers you haven’t heard from in a while, go to social events, etc.

    — if you can, have more than one basic skillset.

    for instance, along with web design, i always was pretty good at fixing / debugging Macs, so i had a sideline as tech support along my main work as a web designer from the moment i started as a freelancer.

    although it’s not always fun fixing buggy computers or fielding tech support calls from computer-challenged clients, it is well-paid, and it can provide secondary income when your main business hits a slow patch. furthermore, sometimes these tech support clients will feed you leads for web design jobs.

    — as Adrian said, take the time to understand the basics of tax deductions.

    for example: here in Canada (Québec province), if you are a freelancer (not an incorporated company), you can deduct a percentage of expenses related to a *rented* car (gas, monthly payments, repairs, insurance, etc), but you can’t claim those same deductions if you *own* your car: those same deductions can only be claimed if your company is incorporated, and if the company actually owns the car. consequently, i’ve been renting a car instead of buying one for years, and it saves me a lot of taxes every year.

    — when times get tough, be creative with your business.

    last fall when the recession hit hard, for the first time in years i saw a major dip in business. i started to ask myself:

    where do my clients come from? answer: my contacts.
    what do my contacts get from sending me clients? answer: nothing.

    so, i decided to give out 10% of the project’s budget to my contact who referred me the job, as a commission. i called it my “recession special”, and started mentioning it to everyone in my network. pretty soon, the phone started ringing again, and i’ve been busy ever since.

    — when things are going great, put some money aside for a rainy day.

    resist the urge of spending all your money when you pile up several big-budget projects in a row. if you’re able to build up a nice cushion of several thousand dollars in your bank account, that will give you time and options if business gets slow for a while, some time down the road.

    good luck to all!

    although sometimes it can be difficult, and it’s probably not for everyone, nothing beats being your own boss. you are free.

    sure, i’m debugging code at 2:00 AM… but monday afternoon, while everyone else is stressed-out and stuck in traffic, you’ll find me at the golf course, working on my golf swing.

  • Aaron

    I am currently working as an apprentice webd esigner and for the last 3 months i have made excellent progression with my skills andhope that in a couple of years time i can become self emplyed. this article has been reassuring to me, and i know that this is the step i want to take.

    Regards

  • http://blog.turisuna.com turisuna

    Wow you give me complete description of becoming self-employed, unfortunately for this time I can’t do it yet and still depend on the company where I work now. However, I have a plan to quit and become self-employed one day, so I can work from home and take care my family. Thanks for this article, it gives me a clue how to be a professional self-employed. :)

  • http://www.rarepearldesign.com Wayne Helpard

    Thanks for the great article. The only thing is without that steady stream of appreciating clients early it’s hard to budget all the monthly fees associated with those fantastic programs like Basecamp and Things.

    Love the article though and very accurate.

  • http://bangladesh-freelance.com bangladesh freelance

    Thanks for sharing your experience!

    Simply great!

    Cheers!

    bangladesh freelance

  • http://firsthandweb.com/ WebDev

    Being a self-employed is great, but it can be tough too. As long as you have the capital to start off with and you have some economical and marketing skills too, being a free-lancer can be fantastic. However, if you know so little about accounting and have no partners (lawyers, consultants, self-employed friends, etc.) around you, it can turn out badly.

    p.s.: you should install a Subscribe to comments plugin ;)

    Have a nice day and thank you for the article (thanks for the commentators too!).

  • http://www.abhijit.biz Abhijit V. Chaore

    Adrian, I have a similar experience as yours. After having worked as a Freelancer for around a year, I realize how important it is to maintain the balance between your professional and personal life. The points you mentioned are worth giving a thought. Thanks mate for sharing. All the best!

  • http://www.kristenashton.com Kristen

    Lovely post and thanks for all the links, particularly projecturf, I haven’t come across that before and it looks awesome, cheers!

  • http://graphicdesignonadime.com Liz Pike

    Man, this is exactly what I tried to convey to someone last week. I’ve recently implemented a daily schedule, and I’m finding it very disconcerting to just stop at an appointed hour (especially hard on Fridays!!), and not sit in my chair for hours & days until a project is finished! It’s addled me so that I can hardly enjoy my time away and I get irritable, but I’m determined to do this for the quality of life I want beyond just work! I have found one thing that seems to help alot.

    By Friday afternoon, if I’ve reached work goals I’ve set for myself on Monday, then I get to take the rest of the afternoon off. It sure has increased my productivity, quality of work, and serves to motivate me to NOT indulge in social media until work is done. Even for marketing purposes. (I don’t allow myself access to twitter or facebook because I inevitably get suckered in by all the work links sent out and read away my work hours.)

    To know what my work goals are, on Monday mornings I spend the first hour of work plugging in projects into my work hours. planning my work and time, and then Fridays after lunch, I reviewing & evaluate my work, progress, projects, etc, and loosely plan my work for the following week. I’m much more at peace knocking off for the weekend knowing I have a plan in place to hit the ground running on Monday mornings.

  • http://soumyasm.deviantart.com/gallery Soumya

    Great article! Yeah, having at least a basic structure to the day and week is very important to get things done. I agree with all the points.

  • http://www.sunnyvillestories.com Max West

    Thanks for sharing this. I want to become a freelance artist myself within the next year and I have a lot to learn about it.

  • http://www.jbergman.net Josh

    Great advice! It has taken me years to work these out and I find balance to be a constant struggle. There are a couple things I would add from what I’ve learned freelancing for 10 years.

    1. Stick to your guns as far as pricing. There will always be clients that say their brother-in-law can do it for less, so make sure you identify what it is worth for you to do the project (including what you can learn from it). I find the clients that try to “low ball” you almost always return with hat in hand, and I usually find the low budget clients are typically the highest maintenance. Don’t be ashamed of what you charge.

    2. Build your client base. It is good to have clients that continually bring you work for their clients, and referrals are a great way to bring in more work.

    3. Don’t be afraid to communicate often when it comes to collecting late payments. Be ready for that to happen from time to time. Write a solid contract that covers your A**.

    4. Hang in there when times are tough.

  • http://townend.co/ Edward Townend

    I’m in a very similar situation to you and can agree on pretty much every point.

  • http://www.donkeyink.com Jamie Purches

    I’ve been working on my own since January 2002 and all these points are valid indeed. I find it’s just as challenging today as it was back then, but there’s so much more satisfaction in working for yourself than there is in working for someone else (though let’s be clear, your client is always your boss, haha!).

    It took me a long time to be fine with say, not having any work to do on a Wednesday and deciding it was ok to take the day off if I wanted to — providing the rest of the week’s ducks were in a row. I eventually came around once I realized over a slow month, “Hey, isn’t this kind of why I decided to go out on my own anyway? I’m going to sit in the sun and enjoy my day, my decision and my life!”

    Great post Adrian.

  • http://www.generationxcomputers.com Simon Hibbott

    Excellent post. I have to admit that after 7 years of self-employment I’m still getting to grips with some of the lessons you’ve grasped so quickly. I think this post may form the basis of my (professional) new year’s resolutions.

  • http://selfemployedliabilityinsurance.net/ Joe

    Working for yourself can be more than you can handle at first. Having to get the clients and keeping them happy seems to be the first priority if you have a service based company.

    Paying for your own business expenses can seem a little looming when you do not have the capital to start, but once you learn to properly use your time and resourses things to get better.

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