The Ultimate Guide to Freelancing

Published by 

W. Paul Alexander

for 

Better Call Paul

NOTE:  This guide is the property of another author who has asked me to reproduce it on my blog.  It is very long, but is very helpful as well.  Because of the length and the different topics discussed, I will be posting in multiple posts.  This is the first one, and will cover the first three topics. 

ORIGINALLY APPEARED ON TOPTAL.COM, with whom I am in collaboration with regards to sharing articles between us and posting on each other's blogs.  

Plus, this is simply a great guide for those who are considering freelancing.  

So, here we go - 

1. Introduction: Freelancing in the Talent Economy

Highly-skilled professionals face an exciting choice in regards to the future of their careers: continue offer their labor as part of a firm, or take full ownership over their labor and become a freelancer in the Talent Economy (not to be confused with the "Gig Economy,").

In this next section, we’ll outline some of the advantages and disadvantages to work and life outside of the cubicle.

2. Freelancing Pros

Increased Complexity and Variety in Professional Opportunities

The agile nature of freelance work offers contingent workers the opportunity to select projects based on their personal interests and preferences. Lucas van Dongen found that working freelance allowed him to access more challenging development jobs in the international market compared to the local opportunities he was finding when working out of Argentina. "Work in the U.S. is usually much more interesting with more advanced technologies," says Lucas. "There’s more money in startups and mobile projects in general, and as a result, the level of work is much higher."

David Nuff found a similar benefit when looking to grow in his career as a designer. "If you’re really specialized in FinTech, you can begin a transition into a space like VR by taking one or two smaller gigs," says David. "That flexibility and the ability to make your own path is, for me, the biggest advantage."

Greater Lifestyle Control and Flexibility

In addition to the headline benefits of the freelance lifestyle, especially remote freelancing (including the ability to structure your day in a way that’s optimally productive for you, and the opportunity to work from anywhere), Laurie Harvey found that flexible work allows for greater financial freedom. "You can control your revenues and, when you’re getting jobs, you can adjust your rate," says Laurie. "If you join an elite talent network like Toptal, jobs can start faster since the whole HR process that usually takes a while doesn’t really exist."

Preferable Compensation and Tax Advantages

If you’re a highly skilled professional, going out on your own means you capture the full value of your labor. Consider a situation where you’re performing the same work for the same client, but are paid as an independent consultant rather than as an employee of a consulting firm contracted by the client (with this firm taking the lion’s share of profits). For a discussion with freelancers who have earned mid-six-figures or more in their careers with Toptal, check out this article on the "new millionaires."

In addition to differences in compensation, freelance work offers tax advantages that quickly add up. You’ll benefit from tax deductions on expenses such as an office, internet, travel, and even meals.

3. Freelancing Cons

Unpredictability of Work

When you embark on a freelance career, you take on the risk of finding work yourself. Even as you progress in your career, this unpredictability may never totally go away. "You still have lean periods," says David. "People I look up to who have ‘made it’ still have stretches of that."

To prepare for a transition into a fully freelance career, finance expert Solon Molho recommends taking baby steps. "My primary suggestion would be to find one or two engagements quickly to take the pressure off," says Solon. When Solon began freelancing, he had an opportunity to expand his work as a CFA instructor more than tenfold, offering an added level of financial security as he began taking on clients as a freelancer.

Lack of Employer-Sponsored Benefits

"There are a lot of economies of scale that you miss out on as a freelancer," says David. "Not being part of a company can make some things like insurance difficult." Health insurance is a pain point cited by many freelancers and one we’ll cover later in this guide for U.S.-based freelancers. For other professional perks, David found that joining a professional association for designers helped fill the gap. "The association’s partly about community, partly about education. They’re good at putting events together and bringing in people who run large agencies to share knowledge, and can help secure better rates from insurers and service providers."

Challenges of Running a Business

For someone accustomed to executing on the job, beginning a freelance career comes with a host of new administrative and logistical challenges. "When you’re freelancing, you’re doing everything," says Laurie. "Looking for work all the time, pitching work, writing up proposals, negotiating pricing, going and chasing down money." Laurie found that joining a professional talent network such as Toptal solved many of these problems by streamlining the process, allowing her to focus on the work. "Toptal presents talent with jobs, you get to choose them or not, and if you get selected by the client, you do the work and get paid."

Closing Thoughts

Freelancing offers incredible opportunities for professional growth and lifestyle flexibility with the caveat that you must have the stomach for unpredictable work and the ability to handle the administrative challenges that come with running your own business.

Continue reading our freelancing guide for a run-down on how to address these challenges and get your freelancing business off the ground!

That's all for now, guys.  

Next, I will be posting the remaining sections of this amazing freelancing guide.