From Full-Timer to Freelancer: 6 Steps to Take

Making any job transition is bound to come with a slight learning curve, but when you’re moving from a full-time job to freelancing, there are probably a few more considerations to make than there would be when moving from a full-time job to another full-time gig. Consider taking some of these steps before making the move to freelancing so that your actual transition can go as smoothly as possible.

Step 1: Create a contact list.

Why it helps: One of the most important assets for a freelancer of any kind is industry contacts. If you’ve been in your career for a while and maybe have held a few different jobs, you’ll likely have a leg up. Before deciding to leave a full-time position to freelance, consider building up your contacts as much as possible. Attend every networking event you can, take current coworkers out for drinks or coffee, and open up an Excel doc on your computer at home to create a document including everyone’s emails, phone numbers, current positions, and possibly some notes on how they might be able to help you in the future. Once you have actually made the leap to freelancing, be sure to keep in touch with your former contacts—as well as reaching out to new ones—and make it a goal to set up in-person meetings a couple times a month with different people.

Step 2: Set up your office.

How it helps: You can probably start out your freelance business with a computer and a printer and a cell phone and still get stuff done, but as you progress, you might want something more stable. If it’s possible to have a room all to yourself for an office, that’s great, but even if that’s not an option, it’s possible to create an amazing work area when limited space is available. Step 3: Get started.
How it helps: Depending on your actual job, it might be hard to start freelancing while you’re still in your full-time position, but if you can, picking up some freelance projects on the side before you go freelance permanently can help you ease into this type of job. Picking up a few freelance projects while still working as a full-time employee could help set you up with clients to work with when you freelance full-time, as well as help give you a feel for what the process will be like.

Step 4: Consider taxes.

How it helps: When you freelance, one of the most important things to remember is that your taxes will not be taken out of your pay. This means that you are fully responsible for paying all taxes to the government—both state and federal—and this must be done in quarterly installments throughout the year. Since this is the case, I like to take a certain percentage from each payment and put it directly into a savings account designated specifically for taxes. This way I know I’ll have the money necessary to make those quarterly payments when the time comes. If taxes confuse you, or you aren’t sure how much to save from each paycheck, an accountant (and particularly one who specializes in freelance and knows what deductions you can take) can help.

Step 5: Remember your retirement.

How it helps: As a self-employed person, you’ll no longer be eligible for employee-sponsored retirement plans, so you’ll need to consider the available options for freelancers to determine which accounts are best for you. Check out this NerdWallet piece for retirement plan options for the self-employed to learn what the different benefits are for each.

Step 6: Think about healthcare.

How it helps: Healthcare is one other area you’ll need to consider when you decide to freelance. As a self-employed person, you’ll no longer have the options that were available to you when you were on staff with a company, but healthcare is still important. This piece about the six best ways to get health insurance when you’re self-employed can help, including options like the healthcare marketplace, COBRA, short-term healthcare options, and more.