[thelist] Fulltime to freelance

[Matt Warden]

On Mon, Nov 24, 2008 at 3:13 PM, Randal Rust <randalrust at gmail.com> wrote:
>> I have around 8 years professonal development experience, as well as a
>> growing list of freelance clients.
>
> How much you have saved up? Under *normal* economic circumstances, I'd
> say that you need at least six months of salary saved up. But I keep
> two years on-hand at all times. Just in case something happens, like,
> say the world's economy goes into a tailspin and my 401K loses 40% of
> its value.

Be careful, there. Large quantities of cash carry with it inflation
risk. Your 401k losses aren't really relevant unless you are nearing
retirement or were planning on drawing out the money for an emergency.

Your point is valid, though. Paul will not want to make this switch
unless he has significant savings to support his entire family for 6
months without any income.

>> At this point I'm less concerned about money than I am about
>> improving the amount of enjoyment I get from my work and having more
>> flexible working arrangements - something most employers where I'm based
>> don't provide.
>
> But it's better than now work at all. Right?
>
> I'm not trying to bring you down, but it sounds like you are unhappy
> in your current job and think that what you need is happiness.
> Happiness doesn't put food on the table for the family.

If you have confidence in your own skills, then I don't think this
level of risk aversion is appropriate. Operating any business is
different than being an employee; one needs more cash cushion; one
needs to be able to deal with market fluctuations without pulling
one's hair out; the list goes on.

If Paul understands and is comfortable with the risk, I would
encourage him to do it. The current economy will push more companies
to find ways to save costs, and one way to do so is to avoid the
30-50% overhead that comes with hiring contractors through a firm that
essentially does nothing but paperwork.

>> Any advice from thelist from anyone who has done this successfully?
>
> Save up and build your client list until you have no choice but to
> leave your full time job.

I'm on board with making sure he has the cash cushion, but as soon as
that's there, I'd say he needs to move forward full force, and that
means getting rid of the full time job. Successful freelancing is very
much a reputation based business, and as he increases his freelance
client work, pushing toward the threshold where he will have to quit
his full time job, he will be putting all work at risk from a quality
perspective.

-- 
Matt Warden
Cincinnati, OH, USA
http://mattwarden.com


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