How to Know When Your Freelance Business Can Sustain You Full-Time

freelance business

When people find out that I freelance, their curiosity piques. Some folks don’t quite understand why I’m not a part of the daily grind. Others, however, are more interested in how I got my start and when I knew I would be able to do this full-time.

I am not going to write a memoir here. But, I got into freelance writing during my last year of college. A friend was managing a website and I asked if I would write blog posts to make a couple of extra bucks.

It was a part-time gig. And, the pay wasn’t great. It did, however, give me some pocket money.

After school, I wrote even more content. I also expanded my network. And, a funny thing happened as I was looking for a “real job” — I really liked freelancing.

I never intended to go do this part-time. But, I thoroughly enjoyed writing and the flexibility. I also dug how I had control of my career. I make my own decisions, like which projects and clients to work with.

So, I kept at it. Over the years, I landed new clients, charged higher rates, and was able to make a living from freelancing.

How to Know When Your Freelance Business Can Sustain You

I would be remiss though if I didn’t mention the drawbacks. It can take years for you to build a full-time income. Work can also fluctuate, which means you might have an irregular income. You may also have difficulty managing multiple clients or projects. And, there will be times when you have to work on projects you aren’t passionate about and deadbeat clients.

Despite these challenges, I love freelancing and am grateful that I can do this full-time. But, I’m clearly not the only one feeling this way.

Because of the pandemic, more people have jumped on the bandwagon. In fact, over the last year, 59 million Americans freelanced — this represents 36% of the total U.S. workforce. And, even if some people had to pause their freelance business, 88% of respondents said that they are likely to freelance in the future.

I can see the appeal. In addition to the benefits I’ve already covered, freelancing can be a great way to add a new income stream. You can use the money you earn to pay down debt, stash into an emergency fund, or generate extra income during retirement. And, thanks to the flexibility, you can do this whenever you have free time.

With that in mind, if you want to give freelancing a chance, go for it. Who knows? You might be able to sustain yourself full-time. How do you know when this can happen? Well, here are 8 telltale signs.

1. You can’t stand your day job.

One of my cousins is a graphic designer. He occasionally freelances on the side. But, if he wanted to, he could probably set out on his own.

Why doesn’t he? Because he loves his job. When he freelances, it’s because he’s just into graphic design or could use a couple of bucks for a financial goal like going on a vacation.

In my opinion, this is the first sign. If you look forward to your day job, then why put yourself out on a limb? Again, it can take years to become a full-time freelancer and pay can fluctuate.

However, if you hate your job, then go for it. Some of the most common red flags include;

  • You have the Sunday Scaries.
  • You’re no longer passionate or excited about your work.
  • New physical alignments are appearing.
  • You vent way too much.
  • It’s become harder to concentrate.
  • You feel like you’re on the clock 24/7.
  • You can’t remember the last time you got a raise.
  • You’ve succumbed to vices, like overeating and substance abuse.

2. You’ve got money in the bank.

How much money do you have in a savings account? Is it’s enough to cover your expenses for the next six months to a year? If yes, then you’re trending in the right direction.

Why do you need so much set aside? Remember, as a freelancer, expect an irregular income. In fact, it’s not uncommon to go through a dry spell when you literally have no work for a month or so. Having a decent savings account takes the pressure off just in case this happens.

3. Working multiple jobs are no longer sustainable.

In the beginning, you probably can freelance whenever you have availability. And, that usually doesn’t lead to many conflicts. For example, if you’re working with one client, you could easily knock out a project for them by working weekends or a couple of hours each day after work.

What happens when they ask you to take on bigger projects? How will you be able to squeeze in work for additional clients? And, when exactly are you going to get around to responding to emails, updating your social channels, or bookkeeping?

If you’re serious about freelancing, there will come a time when it is logistically impossible to juggle your freelance career and 9-to-5.

4. You’ve built up a solid portfolio.

“When starting out, you may not have samples of work you’ve done for other people. Don’t let this get you down,” writes Taylor Gordon in a previous Due article. “Create samples using your own business.” If instance, if “you’re a web designer, create an awesome website.” Or, “if you’re a social media manager, create an engaging social media strategy.”

“Seeing samples of what you do for your own business can attract prospects,” adds Taylor. “It’s not the quantity of samples that you have from random people, it’s the quality. Impress prospective clients with what you’ve done for yourself and they may be inclined to work with you.”

To build your portfolio, consider doing work for free so that you can display it on your portfolio page. As you take on more work, proudly show off your work online. Just be patient as this could take months, maybe even years, for you to put together a decent portfolio.

When you have roughly five projects under your belt, you could be ready for the leap to go full-time.

5. You have recurring business revenue.

Even though you have more than enough money in the bank to get through the next couple of months, you don’t want to completely deplete that. After all, that money should only be used in case of an emergency. With that in mind, if you don’t have foreseeable recurring revenue, then you should put-off full-time freelancing.

“The first step to creating recurring business revenue as a freelancer is to put as many contracts as possible on retainer,” advises Amanda Abella in another Due piece. “For example, I’ve had one client that I can rely on receiving $X every month for years.

“The upside is you know you’ll receive guaranteed money so long as you deliver,” says Amanda. “The downside is you still have to pitch constantly.” Moreover, it can be “difficult to get a hold of editors or clients so this is assuming your points of contact are responsive. While it’s certainly an upgrade, you’re still on the hamster wheel.”

Another recommendation? Start freelancing or consulting on a retainer. You could also create a high-end product that’s scalable. And, don’t rule out lower price point offerings like affiliate marketing or membership sites.

6. You’re willing to spend time on administrative tasks.

“There is a romantic view that one will never work if they love what they do,” writes Inga Bielińska, Inga Bielinska Coaching Consulting Mentoring, in Forbes. “But running a business is not only fun.”

“There are marketing, sales, and administrative tasks involved in it,” adds Bielińska. “Can you spend time on these tasks? Will you be confident enough negotiating prices? How will you feel while pressing others to pay you on time?”

“Before switching your jobs, investigate this darker side deeper,” advises Bielińska.

7. You have a business plan.

I’m not referring to a formal and complex business plan here. Your business plan could be a sticky note if that’s your preference. The idea is that you took the time to determine if your freelance career is sustainable. Usually, this involves;

  • An executive summary that includes what your business is, what you’ll charge, and why it’s unique.
  • A market analysis that identifies your target audience.
  • Financial projections to see where your business will be in 3 to 5 years.
  • Organizational structure based on if you’ll always be working alone or will have to hire other employees.
  • The products or services you’ll be offering and you diversity your income with them.

Again, this doesn’t have to be overly detailed. But, it will give you an idea if you can make a living off of freelancing. And, it will give you a sense that operating a legit business of your own.

8. You’ve got the right stuff.

Finally, not everyone is cut out to be a freelancer. Even if you’re extremely talented at what you do, successful freelancers must also possess the following traits;

  • You’re organized in that you can manage multiple clients and projects. Moreover, you’re on top of bank accounts, bills, and taxes.
  • You are a self-starter and can motivate yourself to get things done.
  • You’re trustworthy, reliable, and always maintain a professional demeanor.
  • You are friendly, but firm when it comes to rates and boundaries.
  • You’re helpful and don’t mind occasionally going above and beyond.

What if you don’t have any of the traits listed above? Don’t give up yet. Keep freelancing on the side and work on developing these traits until you’ve mastered them.