As of 2019, over 57 million people identified as freelancers in the U.S. — an unprecedented 35% of the workforce! It’s clear the gig economy is alive and well in 2021, and another trend is on the rise: people balancing a freelance business while working a full-time job.
While it’s certainly an undertaking, learning how to freelance with a full-time job is not as impossible as it may sound! So if you’ve been eyeing freelance life from your cubicle, take note — you might be able to have both your full-time job and a freelance business on the side.1
Why should you freelance on the side?
People decide to try freelancing for a number of reasons, but here are a few of the biggest perks of working for yourself in addition to working a full-time job:
Freelance rates regularly beat out the national average for full-time pay. Adding a few hours here and there on weeknights and weekends can bolster your full-time salary, especially as you ramp your expertise and increase your hourly or project rates.
If you’re looking to increase your income and take home pay, freelancing on the side of your full-time job can pay dividends.
Security and freedom
If you’ve ever experienced a layoff or the threat of reduced hours at your day job, you know how comforting it can be to have an emergency fund tucked away. For many full-time workers, building a freelance business on the side acts as a similar safety net – especially with the current global market trends.
One of my friends was recently laid off from her full-time job and the first thing she said to me was, “At least I have my business. I’m so thankful to have my freelance clients.”
A second stream of freelance income can be empowering enough to give you the freedom to quit a lackluster job, break into a new industry, or simply feel more confident in a shaky economy.
Level up your skills (or learn something new)
Practice makes perfect, and there’s no better way to hone your existing talents than to complete several consecutive assignments in one particular discipline. The more seasoned you become, the more selective you can be about your clients, too.
Alternatively, if you’re more interested in picking up a new skill, think of your freelance business as a playground for learning and exploring your interests. If you’re not depending on the extra income, there’s nothing holding you back from breaking into new skills and industries.
If your background is in marketing, for example, and you’ve always wanted to pick up graphic design, start taking one-off jobs for $20 or $30 to practice your skills in Adobe. There’s no better time to find out what interests you.
Before you get started freelancing
So you’re convinced that freelance is something you’re interested in trying – great! As tempting as it is to dive in headfirst, your first few assignments and client meetings will go much more smoothly if you’ve done some preliminary planning.
Here are some questions to answer before you ship out on your freelance side-hustle:
1. Does your full-time employer allow you to freelance on the side?
While you don’t necessarily have to disclose your freelance rates, clients, or other business information to your employer, if you’re planning to freelance while working a full-time job, you do need to ensure you’re not violating your employment contract.
Check your non-disclosure agreement for a non-compete clause; if one applies, you’re blocked from offering similar services outside of your employer’s purview. If you’re thinking “what they don’t know won’t hurt them,” you’d be wrong. Violating your employment contract is serious business and could cost you your full-time position.
Many employers will have an “inventions clause” in the employment contract, which you can modify once you set up your new freelance business. If this applies to you, consider contacting human resources and ask to add to your inventions agreement.
2. Why do you want to start freelancing?
If you’re in the clear to start seeking assignments, take some time first to assess your goals for your freelance business. Do you want to make a little extra cash? Are you dreaming big picture, where you can save up enough to quit your 9-5 and go full-time solo?
Maybe you just want to dip your toes into self-employment to see if it’s a good fit for your personality. All of these ideas are valid, and having some direction in what you’re hoping to gain from your side-hustle will help fuel you in the more challenging moments along the way.
When I first started freelancing, my goal was to eventually be completely self-employed. However, I wanted to be smart about the transition and prepared myself for at least 3-6 months of freelancing on top of my regular job.
By freelancing part-time on the side of my day job, I was able to build my book of business and save for an emergency fund once it was time to jump in full-time freelance.
3. When will you do your freelance work?
Pull up your calendar for this one. Freelancers may have more control over their day since they don’t have a boss checking up on their deadlines. However, if you’re completing freelance assignments in addition to a 40-hour workweek, you’ll need discipline, time management and a calendar.
Take note of your available blocks of time, so you’ll know what your freelance “work week” looks like. Keep in mind that most of your freelancing hours will likely be early in the morning, late at night, and on weekends. Welcome to the magic of moonlighting!
4. What services will you offer, and who are your target clients?
It’s okay if you’re unsure of the answer to this question early in your solo career. Most freelancers have some trial and error before they know their niche completely.
It can be helpful to define what kind of work you think you’re qualified for, though; if you’re interested in writing, for example, try to narrow your capabilities to technical writing, blog/articles, advertising copywriting, journalism, email marketing, etc.
From there, try to imagine who you might provide this service to. Is your experience more formal than casual, more corporate than startup? Your client base might trend towards finance or insurance over the latest buzzy tech company.
As you build your portfolio, you’ll likely do work for clients outside of your niche, but this exercise is a good framing mechanism for brainstorming your ideal service and client list.
Psst! If you need a little extra help, start by downloading our Freelance Startup Guide and for a step-by-step process to launch your own freelance business.
5. How much will you charge?
This question is one of the trickier parts of freelance life. Luckily, with a stable income in your full-time role, you can afford more experimentation around pricing your services.
Factors to consider in your pricing model include your level of experience, scope of the work (how big the project will be, and how long it will take you to complete), and your interest in working with the client.
In the early days of your freelance career, it may be worth it to take some assignments at a lower rate purely to build your portfolio and gain connections. Use the handy freelance calculator to determine your hourly rates based on your goal freelancing income.
Guidelines for freelancing with a full-time job
You’re feeling good about your services, you’ve gotten your employer’s blessing, and you’re about to land your first client. Now what? You’re in a good place to get comfortable with some ground rules for freelancing with a full-time job.
Your employer’s time belongs to your employer, period
Short of neglecting to file your taxes, there are few mistakes bigger than working on your side-hustle when you’re clocked in for your full-time position. Not only will slacking at work affect your performance, in most cases it’s a fireable offense to work for another company (yes, your business counts!) on your employer’s dime.
Don’t steal ideas, people, or resources
Although your 9-5 might inspire and educate you in a way that benefits your side hustle, you can’t put any element of your day job to work in your freelance career. That means no work computer to check client emails, no making business calls outside of your breaks, and no poaching ideas or employees for your own gain.
You should also create separate accounts for all your freelance work, including email, tools like Adobe Creative Cloud, and file storage.
Pay your taxes (or at least start saving)
Ask any freelancer to name their least favorite part of being self-employed, and you’re likely to hear a bit about taxes. Yes, including myself, paying quarterly taxes are my least favorite days of the year!
As a W-2 worker, your federal tax obligations are factored into your paychecks and tidily processed every tax season. It’s a different story for freelancers: working for yourself means that you, the business owner, bears the burden of paying the government their fair share.
It might sound scary, but if you plan ahead, you’ll be just fine. Know that about 30% of anything you make will be owed in taxes, adjust your rates accordingly, and make a habit of socking away a third of each of your assignments.
We have a separate “tax savings” account tied to our business bank accounts and automatically send a portion of income to this account every month so we know taxes are covered. (I didn’t start this until my second year of freelancing and wish I would have right away!)
Another thing to keep in mind is that your CPA might want you to start paying quarterly taxes if your freelancing business starts to ramp up. This may alter your typical tax schedule if you’re used to paying only once per year.
Be wary of burnout, the enemy of work/work/life balance
There’s work life balance, and then there’s balancing two jobs and trying to manage a social life at the same time. The truth about a side-hustle is that it’s a game of sacrifice – sometimes to meet a deadline, you have to turn down an invitation for a happy hour or pass up on Sunday brunch.
You don’t want to be working constantly, but it’s part of the full-timer’s freelance reality that you have to find the hours in the day to do your assignments, keep your boss happy, and take care of yourself. This is all part of the balancing act everyone has to do while freelancing with a full-time job.