According to a study by McKinsey & Company, 36% of the American workforce participates in the freelance market. This can include the Uber drivers, tutors, and other side hustle. A big portion of the percentage are full-timers. I know from my experience, in the business application space there is a good number of independent/freelancers working implementation projects. If you are thinking about becoming one of these individuals, I have put together a list of 5 things to consider:
1. Your Subject Matter Expertise - I've connected with a lot of freelance and independents over the last couple of years. I think every business application has its share of independent consultants. For the area you consult or implement in (SCM, HR, Finance, Manufacturing, CRM, BI, etc.) are you experienced or seasoned enough to know the difficult portions? Would you be able to get through a challenging scenario without connecting with a teammate? Make sure you understand your knowledge area, so you can present yourself and your skills appropriately. Stretch assignments are good to take… heck, you know if you were working for a consulting company, they would put you into that position. Think about your industry knowledge as well. If you go into a new industry, would you be able to perform at a high-quality level?
2. The Finances – Do you have savings to get you through the initial phase and the non-project phases? You should have at least 6 months of living expenses ready to go. If you have more than 6 months, you are in good shape. Keep in mind, you might need to fund yourself for the first month while on an engagement. Since this is a contract, you will be sending your invoices to another company. Their payment policy might be a factor. You may need to wait 30 to 45 days after you send the invoice before you see actual income. If you need to travel, you will need to have a credit card with a large available balance as well. This will be another aspect of sending your specific client an invoice to be reimbursed for travel expenses. Plan for your financial situation.
3. Organizational Discipline – You are your boss working for your client. You will need to be very organized with your work and your administrative tasks. You'll need to keep good notes and time tracking. Your time will convert to your invoicing, and it will need to be done in a timely manner (as well as your travel expenses). Additionally, you will be wearing many hats. You will need to be good at sales, contracts, marketing, finance, and of course your delivery activities. You'll need to have good organizational skills.
4. Your Mindset – If you have been an employee your entire career then you are going to need to change your mindset from being an employee to a business owner. Business owners have an ability to have a vision of what they are working towards so when times get tough, they can make something happen to keep the business and themselves going. Do not take this mind shift lightly. Being a business owner is completely different than being an employee. Prepare your mental game for a tough and unknown battle.
5. A Support Community – As an independent consultant, you are on your own team. There will be many days that you feel like you are by yourself, and you'll need to get through these times. This goes along the lines of having a good mindset. A support community can help you work through different situations, can allow you to vent when you need vent, and can encourage you to keep going when you need that too. Your support community can include other freelancers or independents, trusted friends, a spouse, or a mentor/coach.
There are other areas to consider when making the jump. For example, what rate do you charge, do you start as a subcontractor, or can you go straight to the end-user. Do you need official contracts, an attorney, do you need a CPA, and business insurance? These are a few topics to consider. Before you make the leap, do some deep thinking, check with others, and develop a solid action plan.
Next level!
Do you know your next level? Did you know most businesses run on a 3-to-5-year business plan? In some cases, longer strategy plans are put together. What I find interesting is that when I was interviewing to bring new team members on my team, I would ask what their short-term and long-term goals were. Many would struggle with these questions. The short-term goals were usually to get the next new job. I always thought that was a shallow answer. Rare did I come across someone who could articulate where they wanted to be in 3 to 5 years. I wondered why this person would take this job, if they did not know if it would add value to their long-term plan. Do you know where you want to go with your career or are you letting the winds of life and the demands of your job bounce you around?
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