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Contemplating Self Employment
Hello guys. For several years I have wanted to move into the self employment world and feel like I am very close to making the final jump(and quit my full time job) I have been reading a lot of threads on the forums here and thought I might throw this out to the community and see what advice, suggestions, or thoughts some of you experienced folks may have to offer.
Let me give you an idea of my situation: I am a full-time single dad, I work full time as a video editor, and I am constantly busy with freelance projects.
About 8 moths ago I left a job that I absolutely loved for a job with a bigger paycheck. I find this current job very mundane, unfulfilling, and somewhat soul crushing. The idea was that I could use the boost in income in order to beef up my video equipment, and after about a year or so, quit and go Freelance full-time.Here are some of the factors
-I am tired of working 60+ hours per week and want to work at home and spend more time with my daughter.
-I will kill myself(and probably others) if I have to go to a 9-5 and sit in an office
-I love the freelance work I do, especially getting out to do location stuff
-My daughter is 10, loves helping me out, and dreams of working with me when she gets older (she shoots and edits her own projects now)Although I obviously want to be successful, financial gain is not the main goal – freedom is. I am simply looking to achieve a peaceful balance in my life by enjoying what I do, and spending time with my daughter. I don’t need a large home or larger vehicle to be happy. Sure I fantasize about someday opening my own business/studio but not at the expense of my sanity.
Is freelance for me, or do I try to find a new job with steady pay that I can again fall in love with?
ChrisW
http://www.azprovideo.com -
25 Replies
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I visited your site. There is no way you can survive offering complete videos for $400. Forget about getting rich, your first goal is survival. You may be a great editor but if you don’t have the business aspect down you can’t be on your own, because basically freelancing is running your own business.
I have been freelancing for 30 years. Your expenses will be higher than you expect although you can write more off. So my advice is get that home page offer of $400 videos off your site and move up the local production food chain so you have a chance of making it. The one main benefit is that you can have a home office so you’ll see your daughter more but…when you’re not shooting and editing, as a freelancer you will be spending all your other waking hours looking for new clients, billing, repairs, trying to collect, etc. You will be happier on your own but only if you survive. It’s a very Darwinian field and only the best freelancers make it over time. There are many people who don’t have the stomach for the financial ups and downs. You must be a saver to make it, like a squirrel getting ready for the winter. It really helps to be part of a couple, especially if she has a steady job that provides you with health insurance coverage.
Also, don’t make the leap until you’ve lined up clients you know you can count on, without poaching them from your present employer. Perhaps offer to work as a freelancer for your current boss until you can wean yourself away. And most importantly, don’t do anything until you figure out what to do about health insurance. That’s the most common topic among freelancers right after who is a slow payer!
The advice I give the folks on my crews just starting out is: Anyone who is some what technical and half way creative can produce a video, especially now with the ease of use and low cost of entry, but only a very small portion will survive by figuring out how to make it as a business, generating a sustainable living month in and month out. That’s the hard part. I know because I’ve witnessed it for so long. Look for good, deep pocket clients who need video regularly. Add a ZERO to that figure on your website, don’t bottom feed and you might make it.
Good luck!
Ned Miller
Chicago Videographer
http://www.nedmiller.com -
I’ve had people tell me “It must be nice to be self-employed. You can work whatever hours you want.” My response is usually something along the lines of “Yeah. You can work whatever 80 hours a week you want.”
Self-employment can be very rewarding – at least emotionally and intellectually if not always financially. It most definitely is not for the faint of heart.
Good luck. -
It’s a huge leap of faith. It sounds like it might be a lifestyle that fits you. Like others have mentioned, DON’T offer to make videos for 400 bucks. Good lord a typical day of production for a 1 man crew with lighting and audio will cost on average $600-$1400 depending on market. That’s just for a shoot day.
You can get low premium health insurance policy that are for catastrophic only and save on the monthly premiums but you need cash for the little things.
Can you live off the free-lance revenue you have now?
Do you have 6 months living expenses saved up to fall back on?Chris Tompkins
Video Atlanta LLC -
Doing military work at Small Tree, we learned an awful lot about accounting. The government makes us use a model called “cost plus fixed fee”. The way it works is like this:
You get a budget to do some work. You can submit an invoice against that budget each month.
On that invoice you will have:Direct costs (labor, materials and things spent directly on the contract)
Fringe (a pro rated amount of your vacation, sick, healthcare etc based on the percentage of revenue derived from govt work multiplied by your labor hours)
Indirect/Independent R&D (a pro rated amount based on the “overhead” in your business not tied directly to the contract. You use a ratio of govt vs all business and multiply this percentage by all direct costs)
Fee (this is a pre-negotiated profit you get to add on)I mention this because I think most independent contractors use a cost plus model. They figure it’ll take them X hours to do the job and they want $Y per hour. Ultimately, they are saying it’ll cost me X, so I’ll charge them X+(what I think is fair).
There’s a serious problem with this. If you only have one customer, it’s unlikely the X hours will fill all your time and a large portion of your indirect (and fringe) costs will go unmet.
To do it right, you must calculate all those costs and get them built in so you’re making enough money to survive and your customers are paying the true cost of the work. What’s covering your rent, property taxes, phone bill, machine depreciation, software costs etc? What happens when your machine is obsolete and you need a new one? Have you built up capital to buy one?
Steve
Steve Modica
CTO, Small Tree Communications -
Thanks for the advice Chris. I am trying to determine the correct point to actually make the switch. I think saving up 6 months worth of living expenses will be part of that. No, I wont be able to live off what I am making in Freelance right now(I am about a third of the way there). I guess the biggest holdup for me right now is time. I often don’t have enough free time with my full time job to take on all the other projects I would like. Sometimes I feel like If I could get outta there, I would be able to focus on bringing in clients.
The types of clients I am trying to focus on are larger clients that have an ongoing need for regular work.
“You are the universe experiencing itself”
ChrisW
http://www.azprovideo.com -
Sounds like you should go for it!
Chris Tompkins
Video Atlanta LLC -
You don’t need 6 months savings, that would take forever to accumulate, three months should do. Often when you’re freelancing you need to dip into your savings, even when you’re very busy, because some jobs go on for so long it takes awhile to get paid. Many companies can’t give you upfront money, especially if you’re a new vendor. Everyone has an excuse why your check is held up. Your line of credit may be your lowest rate credit card.
First, make two spread sheets, one personal the other business and figure out exactly, and realistically, what your nut will be. Avoid fixed expenses. I am constantly going over my two budgets. Don’t be too optimistic, remember Hope is not a business strategy.
Secondly, you should NEVER TURN DOWN WORK, even if you’re too busy to do it yourself. What I mean is find a friendly competitor, someone you can trust (which is difficult to find) and pass the work onto him or her for a percentage. Then when you do take the step you will have some clients who have been “taken care of” by your associate. This way you can be busy at your staff gig yet have a revenue stream, even if it’s just 5-10%, and be collecting clients. I have done this both ways: sometimes I farm the work out, other times it is farmed out to me, including from allies with staff gigs. So never turn down work, just turn it over to someone competent you can trust.
Ned Miller
Chicago Videographer
http://www.nedmiller.com
www,bizvideo.com -
Thanks Ned this is some very good information for me. I am in the process of gathering as much information and forming a strong strategy right now, so all of this information is very helpful. Hoping to make the jump in the next 6 months.
I have read a lot of these “Anyone have advice for going into business?” threads on here and thought it would be a good idea to open up the question again with my situation.
“You are the universe experiencing itself”
ChrisW
http://www.azprovideo.com -
this is my opinion. It’s only my opinion. I apologize for offending you – I offend everyone. I am just expressing my opinion.
You should not go freelance with your attitude. Working 9-5 is killing you ! I wish I could work 9-5.
Let me give you a dose of reality, my friend. A couple of days ago, my mother in law (81 years old) fell ill and had to go to the hospital. But I have a big job to build 20 new FCP systems, all that will go on a network. I am writing this to you on a Saturday. I have been working non stop – and I will continue this all day today, and all day tomorrow – and keep going until it’s done.But what about my mother in law (and my wife’s feelings) – I am going to take my wife to the hospital, and pop in to say hi to my mother in law for a few minutes. Then, I am going back home to continue this work. Yes, I am getting paid A LOT OF MONEY to do this – that is the motivation. But instead of having a nice free wonderful day outside, I am here, in front of (the other) Mac Pro, building new systems, cloning drives, and making them unique to each other. It’s a time consuming process.
So what is the reward – I will take my wife out late this evening for a very nice expensive dinner, but I will continue with this tomorrow. Until I am done – on Sunday, and however long it takes.
I do not feel that becoming a successful freelancer lets you have a peaceful balanced life. You become consumed with this – getting new clients, keeping up with new technology, and of course, doing the work that your freelance clients are willing to pay you a lot of money to do. So you can send your daughter to dance class, ballet lessons, buy her a new car when she is old enough, send her off to an expensive college, maybe once in a while go on a wonderful expensive vacation with her – but overall, you are going to be working ALL THE TIME. And when you say “I made enough this month, I am going to blow off all the clients that are calling me, because I want to spend the next 2 weeks with my daughter” – your clients will find someone else, and won’t call you again.
Being a successful freelancer is torture. The only reward is the money. You will have nice stuff, and you will be able to have nice things, and get nice things for your family. You will not have a “peaceful, pleasant” life.
Again – just my opinion.
Bob Zelin
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Bob’s advice here carries great wisdom.
Freelancing has many rewards, but they all come at a relative cost. If spending more quality time with the kids is the goal, Bob points out that freelancing, done RIGHT, actually consumes more of your attention than a more mundane job does.
Just as an alternative to ponder, consider variations on the 9-to-5 that include flextime or job-sharing. Both of these enable you to be more available to the kid during the weekdays, as well as having longer 3-day weekends, at a reduction in pay, but continuing the steady income and benefits you need for stability.
I feel a parent should concentrate more on stability, in terms of being there for the kid, than in a certain quantity of time or money available.And “quality time” with your kid is a moving target: as they grow older, they naturally want to and need to become more independent of you, to grow into their own persons. Your job as a parent is to make yourself unnecessary as soon as practical, to launch them into the world, not to hold on so tight they never leave. My kids are approaching college age and they have jobs or school extracurriculars and friends/peers they spend a lot of time with now. This as Harry Chapin’s song points out is the way of things.
In your head, you’re always going to be there having dinners together, but the reality is that if they are thriving, you will see less and less of the kids and almost nothing of them once they get to college age. When they stabilize into a first career and then their own long term personal relationships, and they begin building families of their own, you get together again more often, as adults, on a more even level, with new insights to share. Don’t concentrate so much on the quantity of time spent now, but on the QUALITY of those formative experiences. Work on events and outings and activities that build memories as well as form character. Those don’t always need to be expensive endeavors, either, in terms of money or time.
Also, to get back to business for a minute…
…. there are actually clients that actually accept cost-plus today?!?!? That went away in the late eighties/early nineties, I thought. Certainly in advertising its no longer the rule, since clients finally figured out that cost-plus gives the contractor no incentive to hold down costs; rather, the more the costs go up, the more the contractor makes in his percentage off those costs. If you don’t keep a lid on that, it spirals out of control. I’m shocked at the statement the government forces you to accept cost-plus, or maybe I’m interpreting “cost-plus” differently.
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