Make sure to check out Between the Lines — a newsletter that tells stories about the Claremont Colleges’ entrepreneurship and technology scene. The following is featured in Issue #62: Freelancing At Its Finest.

With Insider article headlines like “Let’s admit it: Most managers are terrible” and survey findings like “83% of respondents believed they could do their job without a manager,” you may be asking yourself whether you still want that same 9–5 grind or if it’s time to shake things up. Whether it’s stagnation, frustration, or ambition, I want to help those who are teetering between full-time and freelancing by determining whether the juice is worth the squeeze and figuring out how to set yourself up for success by monetizing your skills and experiences.

In June 2021, I had just wrapped up a successful 2.5-year run; finally paid off my student loan debt; took a 3-month data analytics course outside of working hours, and found myself hitting a ceiling at my full-time job. Simultaneously, I had reached financial stability and was at a professional inflection point. Most of the time, I was incredibly happy with my employer, but three main pain points led to my frustration and my eventual resignation: pay, career growth, and healthcare.

Only you can decide your tipping point, if any, that would push you to leave an employment opportunity. However, regardless of your why, it’s important to prioritize your pain points and asks to your direct manager. And, if these asks are consistently not being met, it’s important to have tough conversations with your direct manager on timelines for when they will be met. Furthermore, if your requests are continually unmet in the timelines communicated, you may want to consider a jump.

Here are some ways to de-risk your jump while keeping in mind some lessons I’ve learned over the last year since I formed my own single-member LLC.

The first question you should ask yourself is can I take on freelance work while being fully employed?

Just like the sage advice: the easiest time to find a job is while you have a job, taking on freelance work while fully employed is the least risky route when dipping your toes into solopreneurship. While some employment contracts do not allow this, you could still start qualifying conversations with potential clients to decrease your eventual sales cycle. This proactive approach will help minimize the amount of time where you give up that sweet, sweet salary and benefits. Personally, I did not have immediate revenue opportunities lined up, which is definitely something I could have done differently. Instead, I started my sales cycle on day 1 of my resignation from my full-time job, and it took three months to close my first client.

It’s important to know and learn about your sales cycle; each one is different. Typically, planning periods are based on when a campaign will launch, or a product is released. Advertising usually has a quarterly sales cycle, meaning that if you were to launch an ad campaign in Q4, you would usually plan for it during the beginning of Q3. On the other hand, an enterprise CPG category like cosmetics typically has a multi-year strategy where the planning period may be 2 years ahead of when a new product will be released. It also goes by season as opposed to quarters. Consequently, having a client or two outside of your employer while learning your product’s sales cycle is the easiest way to test the waters of freelance while not risking your financial stability.

The next question to figure out is how can I monetize my services for freelancing — what will my value add to clients be?

Upwork is a great place to start looking at a live job board and pricing out your services if you want to take on freelance work but are having difficulty monetizing your services. It may seem easier for skill-based freelancers (like software engineers and creatives) to find part-time work, but experience pays too. Here are some tactics to help start monetizing your experience and coming up with your product.

Leverage your primary experience and try to solve for inefficiencies within your vertical or industry.

Admittedly, my primary experience is sales, and plenty of companies are willing to pay on a commission-only basis — all of the risks are removed from the company and placed solely on the freelance seller. From my experience, I found success in podcast advertising measurement, where there are few experts and still a gap in education and execution. On top of that, the business model for agencies who work on behalf of advertisers to plan, buy, and optimize paid advertising campaigns do not meet the needs of many D2C/eCommerce brands that want to test the podcasting channel. While this is a specific use case, the agency cost structure was based on a percentage of advertising spend that I could charge as a flat fee — either based on the project or as a monthly retainer. Identifying inefficient pricing structures is a way to undercut companies that require more revenue for larger overheads than you, the freelancer. By identifying this inefficiency in a space where I had experience, I was quickly able to start honing in on my product.

Another way to monetize your experience is to monetize your network.

You’d be surprised by how many businesses offer a referral or affiliate partnership. More times than not, the terms of the contract are as simple as a warm intro with a potential client that they have not reached out to, and I’ve learned that many people who are late in their career charge large consulting fees that are really only referral programs (leveraging their network of contacts) structured as a retainer rather than a finders fee. This is another puzzle of dots that a freelancer can start to connect companies to clients to add revenue streams. If you know of innovative companies or consistently recommend a certain service, reach out to them and ask if they have a referral program where you can get paid to make introductions that convert.

A third way to monetize your experience is via “Target Expert Networks” like Guidepoint, Dialectica, AlphaSights, or In Progress to become a consultant in your vertical of expertise.

These companies typically represent hedge funds, PE firms, and VCs to get expert knowledge. Hourly rates can range up to $500, and I’ve met consultants/freelancers that only do this type of work, but if you’re able to juggle your services, referral partnerships, and a few hours a month with Expert Networks, you’re well on your way to having a diversified revenue strategy. Be very careful, however, if you start taking on Expert Network opportunities while you’re still fully employed. You do not want to share any proprietary or confidential company information.

Now, if you’re ready to jump, have already had some tough conversations with your current management, and have started to develop your service/product, I applaud your tenacity. Here are five lessons that I learned over the past year as I decided to make the jump and start freelancing.

First, recognize your time as an opportunity cost. Especially with project or retainer fee structures, it’s very easy to slip into scope creep. Especially if you enjoy the work or client, you might spend way too much time on one client or project. This leads us to the next lesson.

Second, choose a pricing strategy and stick to it. There are trade-offs for both hourly vs retainer structures. With the former, I’ve found that clients tend to go towards micro-managing, i.e., debating the number of minutes spent on a certain task. It also raises the question of whether you charge for meetings and the time spent working. With the latter, there are two typical ways of implementing a retainer: (1) pay for work and (2) pay for access. I found that my clients usually appreciate the detailed SOW that I provide during the pre-sales process. However, pay-for-access is pretty awesome if you can sell it. Regardless, always price high and work backward. Even with trying to price my services as fairly as possible, clients have the right to negotiate. So, think about your floor and your ceiling, and try not to make concessions. Bonus Lesson: have some type of upfront cost or onboarding fee — especially with unknown clients. Businesses typically do credit checks for a reason!

Third, forming an LLC may seem complicated, but in most cases is easier than you think. Here is a guide for California — which is one of the most expensive and complicated in the US market. Collective, the company that put together that resource, is “the first online back office platform designed for Businesses-of-One” (Collective | About). I used Collective to re-classify my LLC as an S Corp to streamline my taxes. Organizing an S Corp can save you thousands of dollars on taxes. Collective also gives you access to Gusto and QuickBooks Online and files your personal and business taxes. If you do go down the Collective route, use the code JO9312 and get your first month free :)

Fourth, think about your service in relation to your clients. Do your projects have short or long timelines? Do you want to pursue multiple clients with the possibility of higher churn? Or just a couple of clients that are more long-term? You’ll usually learn these things towards the 6–12 month mark when you have some historical data to look back to.

Fifth, have as many conversations as possible — especially when you have slow months. I believe most freelancers would agree that it can be feast or famine. So, continue to network, attend conferences, be active on LinkedIn, and maybe write an article for a respected newsletter. You never know where a conversation can lead!

Overall, I knew that I would absolutely be sacrificing my pay to pursue starting my own business to provide freelancing / consulting services, but to this day, the frustration I was experiencing by not being heard about what I felt as legitimate professional asks outweighed the anxiety that I still feel while currently writing this article. Again, only you can decide the tipping point to potentially leave secure, full-time employment. Undoubtedly, I’ve learned more in the past year than since the start of my career, or perhaps my Claremont years, and there are current opportunities in the near future that would have never been available to me if I hadn’t taken the freelance risk. Maybe The Originals said it best, “I’ve Loved, I’ve Lost, I’ve Learned.”

This article was authored by Claremont alumnus Jack Oliphant in partnership with Between the Lines.

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