Freelancing can earn you a high income while giving you freedom that you wouldn’t enjoy in a full-time job. But it does come with risks and downsides, especially in the first year.
So coming up, we’re going to look at the pros and cons of freelancing to decide it’s worth it for you.
After reading this article, you’ll know if freelancing is a good career option for your specific situation and goals!
First, we’ll look at the advantages of freelancing and the main benefits and opportunities you’ll gain!
One big advantage to freelancing is the freedom and flexibility. You can wear what you want, wake up when you want, set your schedule, etc.
If you want to begin working at 5:00 am so that you can coach your child’s baseball team in the afternoons, you can do that. If you want to take two-hour lunch breaks each day, you can do that, too.
So freedom is one of the biggest, most immediate advantages you’ll gain when you become self-employed as a freelancer.
Another big upside to freelancing is the higher earning potential. You can typically charge companies a significantly higher hourly rate versus their full-time employees because they’re not paying for your health insurance, retirement plan, or any other benefits.
As a recruiter, I saw independent contractors and consultants earning 20-50% higher than their full-time counterparts in large corporations.
As a full-time employee, you’re limited in how high your salary can go. If you want to become wealthy quickly, your best “home run” shot is to get stock options while working for a start-up. But even that’s not guaranteed to work.
As a freelancer, you have more options to earn an exceptionally high income ($250,000+).
For example, you can transition into an agency model… where you run a service agency and hire a few other freelancers to help handle the work as you grow.
You can also pick and choose which parts of the business you WANT to be involved in as you grow, and hire someone else for the rest.
For example, if you enjoy selling your service to clients but hate doing the actual work after, you can hire a team to do it for you. Whereas, if you hate selling but enjoy doing the work, you can hire a couple of salespeople to bring in more projects!
This can all be done without a physical office and without full-time employees! Hire remote freelancers to join your team, and pay them for the work they do.
Freelancing also has big benefits if you’re looking for a full-time job but want to work and earn money in the meantime! It shows employers that you’re staying active and keeping your skills “fresh,” while also providing you with some side income.
And you may find that you’re so successful with your freelance projects that you don’t end up needing to find full-time work!
Of course, in job interviews, you’ll need to explain to employers why you’re freelancing, and why you’re willing to drop that once offered a full-time role. But that’s still a lot easier to explain than a big gap in employment where you’ve done nothing!
So freelancing can make you more attractive to employers versus is being unemployed and out of work while job hunting.
We’ve looked at some of the perks and benefits of freelancing, and why it might make sense for you to try, so now let’s look at some downsides of freelance work.
One disadvantage to freelancing is that you’re going to have big swings in income, especially in your first year. You may have a great month followed by a month where you don’t land a single new project. This can be draining mentally.
I mentioned earlier that freelancers can make more money, and while this is true, they can also make a lot less money! I know freelancers who struggle to make even $1,000 to $2,000 per month because they take low-paying jobs.
Fortunately, as you become more experienced, you’ll likely find ways to attract better clients and land projects more consistently.
Another downside to freelancing is that you’re responsible for some business management aspects that full-time employees in a company never have to worry about.
For example, you’ll have to send invoices and collect payment from clients. You’ll have to manage business expenses and taxes, too.
One thing that surprised me when I quit my full-time job and began a freelance marketing career was the higher tax burden (for US citizens). As an American freelancer, I was now responsible for paying self-employment tax of more than 15%!
When you’re a full-time employee in the US, you pay half of that and your employer pays the other half, but when you’re self-employed, you’re paying both halves.
Overall, I feel the pros of freelancing outweigh the cons, but there are some small disadvantages and minor hassles that pop up when you decide to work as a freelancer, especially in your first year.
Also, if you work for yourself for many years and then decide to return to a permanent job, you’ll face some tough questions in your job interviews about why you want to make this change. It’s not impossible to explain and get hired, but you’ll need to convince employers that you’re ready to fit back into a more traditional work environment!
Fortunately, if you succeed as a freelancer, you won’t need to worry about this because it’s unlikely you’ll want to go back, in my experience! The freedom and higher income make freelancing worth it once you build a reliable base of clients over time.
Freelancing can be difficult, especially when beginning. There’s uncertainty about if/when you’ll get your next client and get paid. This is very different from a traditional job where you go in every day knowing when your paycheck is coming.
You also will find yourself doing a wider range of work tasks as a new freelancer. You’ll have to know a bit about sales, a bit about project management, client management, etc. You’ll be wearing many hats but you’ll gain a lot of valuable experience through this!
And once you get some momentum, it becomes easier over time. In my opinion, most of the difficulties in freelancing occur in the first year. If you can survive that year and make sure to create a reliable, consistent stream of clients, then you’ll be fine in the long run!
Freelancing is a good career choice for many professionals, but it depends on your goals, financial situation, and risk tolerance. The most difficult year you’ll face as a freelancer is the first year. It gets easier after that. So freelancing is a very good long-term career choice if you’re willing to put in more work upfront for more upsides in the future.
Those upsides are freedom and flexibility and the opportunity to earn more money without needing to climb the corporate ladder. Many freelancers are charging $100 to $200 per hour in fields like design, digital marketing, software engineering, and more.
If you decide you’re interested in starting a freelance career, I recommend using Upwork to get started. That’s how I got my first few clients as a marketing consultant, and I still feel it’s the best freelance website. You can read my full review of Upwork here.
(And that article also contains tips for how to succeed on the platform and as a new freelancer in general!)