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Earn More, Work Less – Why Freelancing Is a Great First Business

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Earn More, Work Less – Why Freelancing Is a Great First Business

You’ve got a business idea ….. Great, so it’s time to quit your job and go “all in” on growing your business.

Or is it?!

Well it depends on what your business idea is and where you are at in your business journey.

If you are new to business then quitting your job and working full-time on your business might not be the best strategy in the short-term, however counterintuitive this may sound.

What you need is a flexible way of earning an income while still having plenty of time to work on your business and develop your business skills.

Regardless of the type of business you want to run, for example building an app, running a cafe, or having an online store, you will probably need another source of income while your business gets off the ground.  You should also be trying to develop your business skills in a low risk environment.

The last thing you want is to run out of money and have to go back to full-time work.

The obvious solution here is earning more per hour and working less hours.  The hard part is creating this opportunity. This is where freelancing or consulting comes in.

What is freelancing and why do it?

According to Seth Godin…

A freelancer is someone who gets paid for her work. She charges by the hour or perhaps by the project. Freelancers write, design, consult, advise, do taxes and hang wallpaper. Freelancing is the single easiest way to start a new business”.

There is the potential to earn far more per hour as a freelancer or consultant than as an employee, with the added benefit of flexible hours.

The other advantage of transitioning to your own business via freelancing, is it gives you the opportunity to develop your business skills in a lower risk environment and while you are still getting paid.

Some of the business skills you’ll want to develop include:

  1. Talking to potential customers and understanding their pain points
  2. Networking
  3. Marketing yourself and building an audience
  4. Scoping jobs and writing quotes / proposals
  5. Closing sales
  6. Managing multiple projects at once
  7. Basic bookkeeping and accounting
  8. Basic contracts and legal knowledge
  9. Risk management and insurance

The difference between freelancers and entrepreneurs

Seth Godin then goes on to define entrepreneurs as ….

someone who uses money (preferably someone else’s money) to build a business bigger than themselves. Entrepreneurs make money when they sleep. Entrepreneurs focus on growth and on scaling the systems that they build. The more, the better”.

Starting my consulting business gave me a chance to test whether I actually enjoyed running a business without taking significant risks.  I didn’t need to invest capital, rent premises or hire staff and I learnt valuable skills which helped in launching and running my second business.

My long term goal wasn’t to run a consulting business, but in the short term it was the logical option for earning the highest hourly rate for the least amount of work.

Was I being lazy by wanting to work less?  No!  I wanted to work, but I wanted to spend my time building a business rather than selling my consulting time.
Being an entrepreneur is a career. Your dream business doesn’t need to be your first business, it might be your third or fourth.  

What is the next step?

In the first article of the series we covered how to leverage your full-time role to help you create a business including saving, networking and developing yours skills.

You’ve followed those steps, you’ve also worked out your ‘why’ and you have an idea about what your ‘ideal’ business might look like.

Next you created a Minimum Viable Product and tested your product / service with customers.  This in an important step in maximising growth while minimising risks.  Refer to article 2 in this series for further details about that topic.

You’re now developing your business skills via freelancing so that you can earn more per hour and create more time to devote to your business.

The downside of freelancing

The main disadvantage of freelancing is the cap on your earnings.  If you are paid by the hour then the maximum you can earn is the number of hours you work.

In the next article in this series I’ll go into more detail about how to address the downside of freelancing and scale up your business.

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