How to Transition into Being a Full-Time Contractor

Freelancing is a great way to supplement your income and make some extra money on the side. However, many contractors take it one step further and decide to make freelancing their full-time career.

Most professionals have likely considered becoming a full-time freelancer at one point or another. But it can be a bit intimidating to strike out on your own and leave behind the security of a corporate job and a regular paycheque. That being said, there a number of skilled individuals who are freelancing full-time and doing extremely well.

So, just how do you become a full-time freelancer? Here are seven tips to help you transition from an office job to running your own freelance business.

If you havent started freelancing already, the first step is to begin doing it part-time. The great thing about freelance work is that you can do it whenever you like and as often as you like. You can pick up projects when you have time and make some extra money while you continue to work at your 9-5 job.

Not only will this help you get comfortable doing freelance work, but it will also allow you to build up your contacts, portfolio, and recommendations. That way, when youre finally ready to go full-time youll have a solid foundation to build off of.

The hardest part of becoming a full-time freelancer is getting regular work. Unlike when you work for an employer, you cant always depend on a steady income. Some months you may have more work than you know what to do with, while other months might be relatively quiet.

One way to ensure you always get enough hours is to secure some recurring clients. These are clients who want to have an ongoing relationship with you and will continue to give you work each month.

These types of clients will be the foundation of your business, so search for opportunities that offer recurring work. But dont be afraid to take on-off jobs either. Oftentimes, short-term contracts can turn into long-term working relationships if you do exceptional work.

If you can build up a few recurring clients youll be in a much better position when you decide to start freelancing full-time.

As we just talked about, a freelancers income isnt always steady. Your work hours will fluctuate throughout the year, with some months being slower than others.

One way to protect yourself against this is to have some savings set aside before becoming a full-time freelancer. This will give you some money to fall back on during those leaner months. It will also help support you during the early stages when youre still building up your business.

If youre thinking of transitioning into freelancing full-time its a good idea to have three months worth of expenses saved up.

If you currently work for a larger company you probably have health insurance through your employer. However, once you quit your job to become a full-time freelancer youll be responsible for all of your own medical bills.

So, before you take the plunge into freelancing youre going to want to think about health insurance. Luckily, there are a number of insurance options for those who are self-employed.

The first thing you should look into is whether youre covered under your spouse or partners health insurance plan. Or you can see if youre able to convert your current health insurance from a group plan to an individual plan. The Freelancers Union also offers health insurance options for freelancers.

Health insurance can be pricey, so if youre not covered under your spouse or partners plan make sure to leave room in your monthly budget for it.

If your goal is to become a full-time freelancer then at some point youre going to have to take the leap and quit your job. Make sure to wait until youve built up your freelance business and have enough savings in place before taking this step. 

Theres no shame in taking your time. Some people might make the transition in a few months while others may wait years. You may also decide to do it in stages, reducing your hours with your employer while you gradually build up your freelancer clientele. Do whatever feels right to you.

Finally, make sure to leave your job on good terms. If youve done good work for your employer they can be a reference for you in the future. Its also not uncommon for a previous employer to offer you freelance work down the road, so be sure not to damage the relationship when you leave.

Another thing you have to think about once youre self-employed is taxes. When you work for an employer they automatically deduct a certain percentage off each paycheque and put it towards your taxes. However, once you work for yourself its up to you to make sure you have enough money set aside for taxes.

Its a good idea to set aside a certain percentage of each payment you receive. How much youll have to pay will depend on your yearly earnings, so research your local tax laws to determine how much youll potentially owe. 

To make sure you always file your taxes correctly its a good idea to hire a professional accountant. They can review your income, deductions, and other important information every year to ensure you always follow the proper procedures.

As a full-time freelancer, youre in charge of giving yourself a raise, so dont short-change yourself. Keep raising your rates as your business grows to ensure youre valuing your time correctly and maximizing your profits.

If youve been working for a client for a while and have consistently delivered high-quality work theres nothing wrong with asking for a higher rate. This is especially true if youre receiving better offers from other clients. 

And if you get to the point where youre receiving so much work youre having to turn some of it down its a good sign its time to increase your rates. Some of those offers will likely go away, but the clients youre left with will be the ones that value your time the most.

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