How I Made the Leap From Freelancer to Small Business OwnerBy Nicole Dieker September 12th, 2018
I’ve been a full-time freelancer for six years, and in that time, I’ve more than doubled my annual income. There was no one trick to it, but rather, a series of habits picked up from years as an executive assistant and project manager. From the very beginning, I treated my freelance career as if it were a small business: I tracked income and expenses, continuously sought out clients, and worked long hours to establish my byline.
While this proved useful when dealing with my clients, it was invaluable when my professional life evolved and I was given the chance to co-own a business. The skills I picked up and strengthened as a freelancer helped me make better decisions early on in my new role. Regardless of whether you plan to own your own business one day, approaching your freelance work as though it were a small business encourages stability, growth, and smooths out those inevitable life transitions.
From writer to owner
One of my first big breaks as a was becoming a regular contributor to The Billfold, a personal finance site where people have honest conversations about money. I began writing for The Billfold in 2014, and within a few years had moved up to a senior editor position. The Billfold took up roughly 60 percent of my workday, with the rest of my time devoted to other freelance clients. It was an ideal situation.
The Billfold was originally a member of The Awl Network, along with The Awl, The Hairpin, and Splitsider. The Awl Network shut down at the beginning of 2018, but we wanted to keep publishing The Billfold. We had a very loyal readership and commentariat, we were publishing outstanding feature articles and running the popular Dear Businesslady advice series, and our conversation about money was nowhere near over.
We decided to start a new company, The Billfold LLC, which would enable us to keep publishing. I was invited to become a member of The Billfold LLC and a co-owner of the business. I’d always thought of my freelance career as a small business, but joining The Billfold LLC made me a different kind of small-business owner.
Where freelance and small business meet
Prior to working as a freelancer, I spent four years as an executive assistant and project manager at a think tank—which meant I had experience with everything from developing critical paths (that’s the order tasks must be completed to ensure a project launches on time) to completing detailed administrative paperwork. Turns out both of those skills are essential to running a small business, especially when we filed for LLC status.
During my freelance career, I learned how to actively grow my income. At the beginning, my goal was to earn more every week than I had earned the previous week. For The Billfold, LLC, I consider income growth in terms of quarters, but I’m using the same tactics I developed in the earliest days of my freelance career. I spend part of each week looking for potential clients and income sources, and send out at least one pitch per day.
Speaking of pitching, it turns out that pitching sponsored content to a client is a lot like pitching a freelance story. Pitches must be brief and focus on what you can offer the other person. They should include a few links to your previous work so the client knows what to expect. Most importantly, you need to ask for what you’re worth, decline people who try to lowball you, and negotiate rate increases for future projects.
Operating as me vs. we
As a freelancer, my top-level goal could be summed up as continuous career growth—landing higher-profile clients, negotiating higher rates, writing and publishing big projects, etc. Now that I’m a co-owner of The Billfold, I’m responsible for its growth, which also needs to be continuous. The business needs to earn more money than it did a few months ago, the readership needs to increase, and we have to establish long-term goals.
I’ve gone from one all-important objective to two that are equally important, and trying to balance these goals can be a challenge. For example, it’s my job to make sure our revenue doesn’t dip below a certain level. If I have a slow month as a freelancer, I can pull some money out of savings or spend more time working on a long-term project that might payoff later. As a small-business owner, slow months aren’t really an option. Although I’m setting aside some of The Billfold’s revenue every month to act as a buffer, I know that our income has to stay fairly consistent—after all, I have freelance writers who need to get paid.
What to expect as you make the transition
Whether or not you have experience outside freelance, you’re going to have to make some quick adjustments as you establish your new business. Take administration, for example. I knew there’d be a few forms to fill out when we got our business started, but I was not expecting the pages and pages of paperwork I’d need to complete, whether we’re filing permits or opening business bank accounts. I’m also collecting tax forms from writers, planning our publication schedule a few months in advance, and making sure all of our income goes towards its corresponding budget line item. Point is, if you’re thinking about starting a small business, be prepared to set aside at least three hours each week just for administration.
If you’re considering taking on partners, be honest with yourself. Do the people you have in mind meet your requirements for experience and savvy? More importantly, can you speak to them openly and honestly? If you can’t have an honest discussion with the rest of the team about your needs and concerns, it’s going to be hard to run a business together.
Speaking of needs, you’re going to need more money than you realize, for everything from quarterly taxes to annual domain renewals. Whether you fund your small business through crowdfunding, advertising, sponsored content, e-book sales, or all of the above, you’re going to be asking a lot of people to give you money—so get comfortable with it.
Making the ask will be a lot easier if you can clearly explain why supporting your small business will add value. Can you introduce a product to 8,000 potential customers? Can you provide a patron-only reward? Will your e-book teach readers something they can use to improve their careers? Asking for money is like pitching. It’s all about how your work can benefit the other party.
I wasn’t expecting to expand my freelance career to include small-business ownership, but now that I have a few months of working for The Billfold LLC under my belt, I appreciate the way it allows me to use my old skills while developing new ones. If you have the opportunity to take on a small-business ownership role, I’d suggest you consider it carefully before saying yes—but I also suggest that you go for it.Image by Alvaro Serrano