I've tried the main three options you can choose from when picking a job statute. I've started as an employee, ran for a while my own business and now I'm a freelancer. I've experienced them all.
In the technology businesses I'm circling, I meet a lot of people who dream of becoming a freelancer. That might be an excellent idea. It can be fascinating, but do it for the right reasons. If money is your sole reason, I'm not sure you are making the right decision. Probably farming of a specific greenish plant would offer you more money.
The most significant difference today between an employment contract and a freelance contract is your social security. To put it blankly, with an employment contract, the government will take care of you, whatever happens. With a freelance contract, you are on your own. You can create the same safety nets, but they are not present by default. You'll have to arrange (and pay for) them yourself. You receive the almost absolute freedom to choose which safe nets you want to pay for, but make sure you make a contiguous decision. Not making an explicit decision, is accepting the bare minimum.
Cars, training, holidays, these are for me the most valuable freedoms you receive. I'm not a big car fan, so I drive a decent but quite modest car. If you are a big fan of sports cars, you can choose to spend a ridiculous amount on your vehicle. The same goes for training, whether they are conferences, physical or online courses, books, … never having to pass something else as your bank account is quite lovely. If you have small children and want to spend some more time with them, you can decide to work a little less for a while or take some more holidays. Again your bank account is probably the only party you have to convince. Of course, if you have an employment contract, you can enjoy parental leave in all sorts of forms.
The most frequently heard "I want to be my own boss", might be the most disappointing. If you go for pay by hour offer, you will still have a boss. They will typically give you a bit more of freedom, but not that much. If you go to sell your own solutions, like a wedding photographer or selling websites to clients, the argument becomes more valid. Always keep in mind that as long as somebody is paying you to do something, he or she has certain expectations. These expectations will translate into some form of bossiness.
If you're still convinced, do it! It can be awesome!
So before you start, make sure you tick off this checklist:
- Have a clear and well-defined offer. Are you a NodeJS frontend developer or a retro wedding photographer. The more specific you define your offer, the easier people will remember you when they need such a service. It definitely does not rule out that people will reach out to you for things, not in your core business. But the clear label makes you easy to remember.
- Have a buddy. It can be lonely to be a freelancer. At your project, you might be in contact with a lot of people, but they will help you to decide which pension fund you should buy. Find a bit more experienced freelancer you can talk to. Just call me : )
- Get a good accountant. This one needs no arguing. Accounting and tax are so complicated you need a specialist to support you.
- Have at least savings to survive four months without income. Two months to find your first assignment, a month to work and then another typical 30 days to get your invoice paid out.
- Don't spend crazy amounts on marketing stuff (website, businesscards and stationery). Update your LinkedIn profile. Get a domain name with a simple one-page website and a reliable mailbox.
- Build a network. Word of mouth is the cheapest sales channel. It will take some time before it starts to pay of in sales. But as of day one, it will offer you a circle with like-minded people. People you can ask questions about your little enterprise.