I continue to read how contract and freelance work is likely to be a growing trend in the United States for several years. While I am sure unemployment is driving this trend, I also believe America is now a country that is so wealthy people can choose to “risk it” and not risk as much as in prior times or other parts of the world. The social safety net and minimum standard of living in this country is enormous. The worst that can happen if you choose to “go for it” is not really that big when put in global perspective. Your business fails. You fail. You declare bankruptcy. You have a temporary social stigma attached. In the US, even a bankrupted professional has more income, freedom, and opportunity than most of the world’s population.
If you are considering making the leap to contract work, freelancing, consulting, “the 1099 life,” whatever you choose to call it, here are a few things I have learned from my clients and vendors through the last few months:
- Make an administrative schedule – If you do not control your administrative duties one of two things will happen. Either tracking expenses and paying bills will become all you think about, or you will find yourself always late with bills and forgetting to record expenses. Reserve 4 hours per week on a certain day to complete this work, stick to the schedule, and let it fall from your mind the minute it is done. This can also be a good time to review your financial reality.
- Talk to everyone– That kid covered in tattoos in the grocery store line, his father might own a company that really needs your services. The door-to-door window salesman, you might not be interested in new windows, but his company could sure use an upgrade on their marketing materials. The obnoxious mom at your child’s soccer game, she obviously talks a lot; it might be a good idea for her to know who you are and what you do. Talking to and being friendly with everyone is not really networking, but it can lead to opportunities.
- Get paid – Collecting is tough work. It is especially tough if you are collecting from clients with ongoing work. You MUST get paid. Starting out, one of the easiest ways to do this is to have upfront/early payment discounts, or to demand a credit card to keep on file. Chances are, starting out you will undercharge for your service or product, having poorly managed trade credit will compound the cash flow problem.
- Never wear flip-flops – This ties into point number two, and I do not know how else to put it. Going to the grocery store in shorts, ragged t-shirt, and flip-flops has a real opportunity cost. The size of that cost will always be unknown, but there are more than 5 times this year I have had a “oh crap, not while I look like this” moment. Think of 5 small business owners you know that have been in business for more than 10 years; now, try to imagine them in a ragged rock t-shirt and flip-flops. Chances are, you can not imagine it; chances are, there is a reason.
- Focus on sales, not expenses – This is probably less true for those of you selling products, but in the service world, sales are more important. If you keep your expenses relatively well managed (cheap office lease, basic equipment to start, standard marketing materials) your sales will define your success. If you spend an afternoon trying to save $20 on a desktop monitor, you are allocating your time inappropriately. Managing costs for a small business can largely be outsourced; tell your friends and family what you are looking for. They will tell you, over the course of their week, what deals they are seeing. Selling is largely up to you. Nobody knows your business, talents, and client target like you. Nobody but you can make that good impression, give that free advise, and collect that precious business card.
Each of these tips were things I “knew” before I started. Each of them are things I now really know. Feel free to add to this list in the comments, I am always ready for good advice.
Author Note: This was originally published on June 10, 2010.