Cal me crazy, but I never was under the impression that freelancing was a dream. Quite the opposite -- I would never freelance unless i had to for some of the reasons that the author highlighted (mostly insurance).
If I had to though, I would, but then I would try to scale beyond myself (instead of trading my time for an hourly rate) and create an agency.
I think the only conditions that freelancing would make sense are:
* you can get a very hi hourly rate, much higher than you would if you were a W2 employee
* you have steady demand for your talent, so you are never in "famine" periods
I used to freelance and I can totally relate to the "feast or famine" cycle. Freelancing often sounds ideal—freedom, flexibility, and the chance to work on diverse projects. But the reality of inconsistent income, lack of benefits, and the need to constantly hustle for clients.
For those who have freelanced for a while, do you find it sustainable long-term, or is it more of a stepping stone toward building something more stable, like a product or SaaS? And how do you manage the stress of income unpredictability? Curious to hear from people who've made freelancing work on a larger scale.
Long-term freelancer here (several decades) who has almost never been a full-time employee. While the points in this article are generally true, there is much variety in the world of freelancing that isn't touched on here.
My first few freelancing jobs were basically full-time, working for one client at a time. While I didn't get benefits (health insurance, paid vacation, stock options, extra overtime pay), I did command a fairly high hourly rate which made up for that.
My time wasn't monitored as closely as that of a full-time employee, i.e. if I came in at 10 am and left at 4 pm, I got paid for that time (minus lunch) and nobody cared, as long as I got the job done. Conversely, if I worked from 9 am to 11 pm, I got paid for all those hours (minus time for meals, of course)!
Eventually I got smaller clients/projects, but more of them. These days my situation is much closer to that described in the article. However, I'm in a much different position financially now than I was then, and am okay with the large fluctuations in work.
If work starts to dry up, your safety net is to get a full time job, like all the other working stiffs out there. You have been building your skills as a freelancer, especially during dry spells, haven't you? So theoretically you're well positioned to apply for a job. There's also unemployment benefits, which vary by country of course, so hopefully you won't end up on the streets unless you suffer setbacks well beyond your control.
If I had to give advice to somebody who just started freelancing, it would be to save as much as possible as early as possible, and to stash as much as possible in a retirement account and the rest in an investment(s) that will be relatively safe in the long term. Ask your accountant and financial planner for specific advice here, but long story short: index funds like the S&P 500.
I'm doing various forms of small business including freelancing for 20+ years. Some of these years I was working as a consultant for one client, a few years were primarily focused on own products, some years were "pure freelancing" similar to what's described in the article. Now again working primary for one client but still managing my own products and taking small gigs on the side.
Except in the beginning, I've had no issues with income but as the others said you need safe cash cushion and financial discipline.
Context switching and overburning is a problem but ask any small business owner outside of the IT and they'll tell you something alike.
Freelancing is just a form of small business and small business is hard. But the level of freedom is higher than that of the employee.
I started out freelancing and eventually built a consulting firm w/ a partner, I left around 50 people because selling time for money just never got fun.
Took a business partner, a couple engineers, and one of the products we had built for an old customer from the consulting firm (on good terms!) and built an enterprise SaaS product out of it, much happier working working with a small team on a product.
For me the value of working on lots of things was meeting lots of people I'd like to continue working with and getting product ideas.
I’ve been consulting for 4 years with considerable success so you could say it’s kinda “freelancing long term”. Whilst I originally was stressed about the need to constantly seek new projects/clients, it’s stabilized a little bit and I have built up some savings to at least give me a buffer. For managing internal stress, I’ve turned to Buddhism to help keep me going through tough times but also realized that reputation and client base has played a key role in me keeping this up long term.
My client base is a mix of startups and enterprises. Enterprises have given me longer term projects and have deeper pockets which reduces income unpredictability. The good work that me and my team does also provides us with good referrals and case studies that we can talk about with future customers.
As a solo consultant at the beginning of the journey, I adopted the mindset of being a 1 person business and acted like a business which meant doing sales/marketing activities (i.e. built partnerships, strategize to focus on value propositions, act like an advisor) to keep things going.
Thanks for sharing your journey, it's very inspiring. I'm curious, how did you find your first enterprise clients, and what strategies helped you secure long-term projects? Any advice for building that initial trust as a solo consultant?
It depends on the type of your contracts - there's also longer-term contracts out there (at lower hourly rates).
You can do any mix of those (if you can find them) - ideally, you've got long-term contracts that cover you basic income needs, and do short-term contracts or product development on top of that.
Regarding the feast or famine cycles - you need a very healthy cash cushion.
And speaking of health, that's a risk in itself. Long-term health issues that prevent you from working as much as you need to will drain your cushion.
I've done both - built a software product and company around it, as well as consulting (including some big projects like one processing $1B/mo in payments).
>>how do you manage the stress of income unpredictability<<
By squirreling away as much as I can from those "feast" times.
I've found many people I meet on fixed incomes who haven't been through the "feast or famine" cycle you mentioned don't appreciate just how hefty a safety net it takes to feel secure. I keep seeing naive guidance out there in the range of months, where personally I was looking out in terms of 1-2 years (or more). It necessitated significant sacrifices when I was starting out, in terms of disposable income, homeownership, etc. I was young, so my personal needs were really frugal.
>>do you find it sustainable long-term<<
A few things that helped make it sustainable (this is looking back in retrospect - it's not like I was deliberate about sustainability at the time as I was busy trying to make a living, build up a reputation and fiscal capital, and most importantly make cool new things):
- Personal flexibility in terms of scheduling 'vacation' time. Got a couple months without anything on deck? Great, spend 6 weeks catching up on work you let slide while you were insanely busy on the last consulting gig, then take two off and travel or do something else to recuperate. I always struggled to be 'truly' disconnected, but clients tended to recognize how hard I work to make them happy and were supportive (i.e. tried to be a little more self-sufficient while I was away) - and it's still possible to have a great trip while checking in from time to time (I recall a couple weeks in Boracay where I'd be on email all morning then kitesurf in the afternoons).
- Innate satisfaction from pleasing clients and from building new things. Money isn't the only reward out there to hit your dopamine. You already mentioned diversity in projects, which falls in the same vein as this.
- Being open to long workweeks when times are busy. It's not a clock, it's about achieving the objective (have logged 80+ hours for weeks at a time - if you're excited about and deeply committed to the work it's not as bad as it sounds). Billing hourly or some other remuneration arrangement that leaves you feeling compensated for your time is really important here.
- Exercise - find a physical activity that helps burn off your stress.
- A bit of hubris around selectivity. Don't get a warm fuzzy feeling from this lead? That's fine, skip it and look for a different opportunity. I think the sense of control and agency here is something those at regular day jobs sometimes miss. Of course it takes going through some crap projects to get to where you can recognize and filter on the good ones.
- Reputation. A lot of the stuff that was hard at first becomes easier once you're established and can leverage a network of thrilled customers and partners. I don't advertise anymore, and get more opportunities than I can handle from word of mouth. I turn down more work than I take on. (Of course as you grow, you get a new and different set of hard challenges to tackle).
I toyed with having employees on the consulting side, but as I worked with larger clients I unexpectedly found it sometimes worked better to "commandeer" staff directly from them for a project (especially if you've got buy-in at the C-level). One thing I've learned is I much prefer working with a small, talented and focused team than an 'army of mediocrity', and lately have charted course back into the product realm.
>>or is it more of a stepping stone<<
Everything we do in life is a stepping-stone to where we'd like to be. Some stones give way, some hold unexpected surprises when you turn them over. One way or another you're going to get your feet wet.
Sounds like you're living the dream! I definitely agree that a few months of safety net doesn't feel "safe" at all and 1-2 years is more reasonable. One question, how did you initially start building that network of clients to reach a point where word of mouth sustains the business?
A common scenario I've come across with multiple folks here (Canada, GTA) are couples where one does contract work and the other is a FTE. This gives consistent benefits with an increased overall income. There has traditionally been a substantial independent contracting market here but maybe that changes with the new macro situation we're in.
I have freelanced for about 15 years, programming and system admin for US companies.
The author describes a kind of freelancing I usually call piecework. That means finding and bidding on small jobs constantly, often on race-to-the-bottom sites like Upwork. The hourly rate quoted ($25 - $35 per hour) seems very low for an experienced freelancer in the USA, but typical of piecework rates.
Full-time jobs may look more stable and predictable, but only until you get laid off. For the approx. 250,000 American tech workers laid off in the last couple of years, now left with no income or insurance, losing a full-time job probably looks even worse than freelancing.
Rather than constantly churning projects and customers, a successful freelancer will optimize for long-term customers, providing business value and not just small one-off tasks, and more predictable billing arrangements such as retainers and fixed-price bids. Hundreds of thousands of small to medium-size businesses don't have any full-time IT staff so they rely on outsourcing. Once they find someone who cares about their business and offers ongoing value a good freelancer can keep them for years. You only need a few long-term customers to sustain a freelancing business and make more than most full-time employees.
Having specialized skills helps a lot, but so does knowing how to talk to and listen to customers, how to focus on solving business problems rather than a "tech stack," and how to cultivate long-term relationships. These days "specialized skills" can mean knowing how to do anything other than React or Python, the bar seems fairly low. Managing small company cloud infrastructure, for example, seems very much in demand with relatively few people able or willing to do that work. I know freelancers making a good living setting up and maintaining WordPress sites.
Taxes, insurance, etc. all turn into your problem as a freelancer. You also get quite a few good tax deductions as a business owner -- including deducting health insurance premiums -- so with the help of a decent tax accountant you can figure out how to reduce taxes. The self-employment tax the author refers to (USA-specific AFAIK) mostly means Social Security and Medicare, which freelancers and all self-employed people have to pay 100% themselves, though those amounts also get deducted from federal taxes.
Health insurance in the USA does present a surprising cost for people used to their employer paying for it, but the cost varies mostly by income, and alternatives exist for younger and healthier people. US medical costs, including insurance, drives retirees and digital nomads to live abroad, where they can more easily afford medical care. Only the influencer crowd tries to pretend they work on a laptop from the beach -- no one should take those people seriously. Social media influencers do not freelance, they try to make money from influencing.
As for scaling, yes, the number of hours in the day and the freelancer's tolerance for work limits scaling. Rates can get very high for people with solid in-demand skills, hundreds of dollars per hour or even more. If you want to scale by building an agency or consulting company you change from freelancing to building and running a business, with everything that entails. I have never wanted to scale up, only to make a comfortable living, but I know freelancers who have scaled their business -- which really comes down to doing the tedious stuff like marketing, billing, taxes, etc. for people who can't be bothered to do that themselves.
Cal me crazy, but I never was under the impression that freelancing was a dream. Quite the opposite -- I would never freelance unless i had to for some of the reasons that the author highlighted (mostly insurance).
If I had to though, I would, but then I would try to scale beyond myself (instead of trading my time for an hourly rate) and create an agency.
I think the only conditions that freelancing would make sense are:
* you can get a very hi hourly rate, much higher than you would if you were a W2 employee
* you have steady demand for your talent, so you are never in "famine" periods
https://freedium.cfd/https://medium.com/mr-plan-publication/...
I used to freelance and I can totally relate to the "feast or famine" cycle. Freelancing often sounds ideal—freedom, flexibility, and the chance to work on diverse projects. But the reality of inconsistent income, lack of benefits, and the need to constantly hustle for clients.
For those who have freelanced for a while, do you find it sustainable long-term, or is it more of a stepping stone toward building something more stable, like a product or SaaS? And how do you manage the stress of income unpredictability? Curious to hear from people who've made freelancing work on a larger scale.
Long-term freelancer here (several decades) who has almost never been a full-time employee. While the points in this article are generally true, there is much variety in the world of freelancing that isn't touched on here.
My first few freelancing jobs were basically full-time, working for one client at a time. While I didn't get benefits (health insurance, paid vacation, stock options, extra overtime pay), I did command a fairly high hourly rate which made up for that.
My time wasn't monitored as closely as that of a full-time employee, i.e. if I came in at 10 am and left at 4 pm, I got paid for that time (minus lunch) and nobody cared, as long as I got the job done. Conversely, if I worked from 9 am to 11 pm, I got paid for all those hours (minus time for meals, of course)!
Eventually I got smaller clients/projects, but more of them. These days my situation is much closer to that described in the article. However, I'm in a much different position financially now than I was then, and am okay with the large fluctuations in work.
If work starts to dry up, your safety net is to get a full time job, like all the other working stiffs out there. You have been building your skills as a freelancer, especially during dry spells, haven't you? So theoretically you're well positioned to apply for a job. There's also unemployment benefits, which vary by country of course, so hopefully you won't end up on the streets unless you suffer setbacks well beyond your control.
If I had to give advice to somebody who just started freelancing, it would be to save as much as possible as early as possible, and to stash as much as possible in a retirement account and the rest in an investment(s) that will be relatively safe in the long term. Ask your accountant and financial planner for specific advice here, but long story short: index funds like the S&P 500.
I'm doing various forms of small business including freelancing for 20+ years. Some of these years I was working as a consultant for one client, a few years were primarily focused on own products, some years were "pure freelancing" similar to what's described in the article. Now again working primary for one client but still managing my own products and taking small gigs on the side.
Except in the beginning, I've had no issues with income but as the others said you need safe cash cushion and financial discipline.
Context switching and overburning is a problem but ask any small business owner outside of the IT and they'll tell you something alike.
Freelancing is just a form of small business and small business is hard. But the level of freedom is higher than that of the employee.
I started out freelancing and eventually built a consulting firm w/ a partner, I left around 50 people because selling time for money just never got fun.
Took a business partner, a couple engineers, and one of the products we had built for an old customer from the consulting firm (on good terms!) and built an enterprise SaaS product out of it, much happier working working with a small team on a product.
For me the value of working on lots of things was meeting lots of people I'd like to continue working with and getting product ideas.
I’ve been consulting for 4 years with considerable success so you could say it’s kinda “freelancing long term”. Whilst I originally was stressed about the need to constantly seek new projects/clients, it’s stabilized a little bit and I have built up some savings to at least give me a buffer. For managing internal stress, I’ve turned to Buddhism to help keep me going through tough times but also realized that reputation and client base has played a key role in me keeping this up long term.
My client base is a mix of startups and enterprises. Enterprises have given me longer term projects and have deeper pockets which reduces income unpredictability. The good work that me and my team does also provides us with good referrals and case studies that we can talk about with future customers.
As a solo consultant at the beginning of the journey, I adopted the mindset of being a 1 person business and acted like a business which meant doing sales/marketing activities (i.e. built partnerships, strategize to focus on value propositions, act like an advisor) to keep things going.
Happy to answer more questions!
Thanks for sharing your journey, it's very inspiring. I'm curious, how did you find your first enterprise clients, and what strategies helped you secure long-term projects? Any advice for building that initial trust as a solo consultant?
It depends on the type of your contracts - there's also longer-term contracts out there (at lower hourly rates).
You can do any mix of those (if you can find them) - ideally, you've got long-term contracts that cover you basic income needs, and do short-term contracts or product development on top of that.
Regarding the feast or famine cycles - you need a very healthy cash cushion.
And speaking of health, that's a risk in itself. Long-term health issues that prevent you from working as much as you need to will drain your cushion.
I've done both - built a software product and company around it, as well as consulting (including some big projects like one processing $1B/mo in payments).
>>how do you manage the stress of income unpredictability<<
By squirreling away as much as I can from those "feast" times.
I've found many people I meet on fixed incomes who haven't been through the "feast or famine" cycle you mentioned don't appreciate just how hefty a safety net it takes to feel secure. I keep seeing naive guidance out there in the range of months, where personally I was looking out in terms of 1-2 years (or more). It necessitated significant sacrifices when I was starting out, in terms of disposable income, homeownership, etc. I was young, so my personal needs were really frugal.
>>do you find it sustainable long-term<<
A few things that helped make it sustainable (this is looking back in retrospect - it's not like I was deliberate about sustainability at the time as I was busy trying to make a living, build up a reputation and fiscal capital, and most importantly make cool new things):
- Personal flexibility in terms of scheduling 'vacation' time. Got a couple months without anything on deck? Great, spend 6 weeks catching up on work you let slide while you were insanely busy on the last consulting gig, then take two off and travel or do something else to recuperate. I always struggled to be 'truly' disconnected, but clients tended to recognize how hard I work to make them happy and were supportive (i.e. tried to be a little more self-sufficient while I was away) - and it's still possible to have a great trip while checking in from time to time (I recall a couple weeks in Boracay where I'd be on email all morning then kitesurf in the afternoons).
- Innate satisfaction from pleasing clients and from building new things. Money isn't the only reward out there to hit your dopamine. You already mentioned diversity in projects, which falls in the same vein as this.
- Being open to long workweeks when times are busy. It's not a clock, it's about achieving the objective (have logged 80+ hours for weeks at a time - if you're excited about and deeply committed to the work it's not as bad as it sounds). Billing hourly or some other remuneration arrangement that leaves you feeling compensated for your time is really important here.
- Exercise - find a physical activity that helps burn off your stress.
- A bit of hubris around selectivity. Don't get a warm fuzzy feeling from this lead? That's fine, skip it and look for a different opportunity. I think the sense of control and agency here is something those at regular day jobs sometimes miss. Of course it takes going through some crap projects to get to where you can recognize and filter on the good ones.
- Reputation. A lot of the stuff that was hard at first becomes easier once you're established and can leverage a network of thrilled customers and partners. I don't advertise anymore, and get more opportunities than I can handle from word of mouth. I turn down more work than I take on. (Of course as you grow, you get a new and different set of hard challenges to tackle).
I toyed with having employees on the consulting side, but as I worked with larger clients I unexpectedly found it sometimes worked better to "commandeer" staff directly from them for a project (especially if you've got buy-in at the C-level). One thing I've learned is I much prefer working with a small, talented and focused team than an 'army of mediocrity', and lately have charted course back into the product realm.
>>or is it more of a stepping stone<<
Everything we do in life is a stepping-stone to where we'd like to be. Some stones give way, some hold unexpected surprises when you turn them over. One way or another you're going to get your feet wet.
Sounds like you're living the dream! I definitely agree that a few months of safety net doesn't feel "safe" at all and 1-2 years is more reasonable. One question, how did you initially start building that network of clients to reach a point where word of mouth sustains the business?
A common scenario I've come across with multiple folks here (Canada, GTA) are couples where one does contract work and the other is a FTE. This gives consistent benefits with an increased overall income. There has traditionally been a substantial independent contracting market here but maybe that changes with the new macro situation we're in.
I have freelanced for about 15 years, programming and system admin for US companies.
The author describes a kind of freelancing I usually call piecework. That means finding and bidding on small jobs constantly, often on race-to-the-bottom sites like Upwork. The hourly rate quoted ($25 - $35 per hour) seems very low for an experienced freelancer in the USA, but typical of piecework rates.
Full-time jobs may look more stable and predictable, but only until you get laid off. For the approx. 250,000 American tech workers laid off in the last couple of years, now left with no income or insurance, losing a full-time job probably looks even worse than freelancing.
Rather than constantly churning projects and customers, a successful freelancer will optimize for long-term customers, providing business value and not just small one-off tasks, and more predictable billing arrangements such as retainers and fixed-price bids. Hundreds of thousands of small to medium-size businesses don't have any full-time IT staff so they rely on outsourcing. Once they find someone who cares about their business and offers ongoing value a good freelancer can keep them for years. You only need a few long-term customers to sustain a freelancing business and make more than most full-time employees.
Having specialized skills helps a lot, but so does knowing how to talk to and listen to customers, how to focus on solving business problems rather than a "tech stack," and how to cultivate long-term relationships. These days "specialized skills" can mean knowing how to do anything other than React or Python, the bar seems fairly low. Managing small company cloud infrastructure, for example, seems very much in demand with relatively few people able or willing to do that work. I know freelancers making a good living setting up and maintaining WordPress sites.
Taxes, insurance, etc. all turn into your problem as a freelancer. You also get quite a few good tax deductions as a business owner -- including deducting health insurance premiums -- so with the help of a decent tax accountant you can figure out how to reduce taxes. The self-employment tax the author refers to (USA-specific AFAIK) mostly means Social Security and Medicare, which freelancers and all self-employed people have to pay 100% themselves, though those amounts also get deducted from federal taxes.
Health insurance in the USA does present a surprising cost for people used to their employer paying for it, but the cost varies mostly by income, and alternatives exist for younger and healthier people. US medical costs, including insurance, drives retirees and digital nomads to live abroad, where they can more easily afford medical care. Only the influencer crowd tries to pretend they work on a laptop from the beach -- no one should take those people seriously. Social media influencers do not freelance, they try to make money from influencing.
As for scaling, yes, the number of hours in the day and the freelancer's tolerance for work limits scaling. Rates can get very high for people with solid in-demand skills, hundreds of dollars per hour or even more. If you want to scale by building an agency or consulting company you change from freelancing to building and running a business, with everything that entails. I have never wanted to scale up, only to make a comfortable living, but I know freelancers who have scaled their business -- which really comes down to doing the tedious stuff like marketing, billing, taxes, etc. for people who can't be bothered to do that themselves.