Ali Hale has jumped in with this post explaining the virtues of becoming a freelancer as an in-between step to become a full on entrepreneur. Since this is the exact path she is walking now, Ali in a great position to help explain what it is like.

If you’re feeling the fear regarding quitting your job to start up a business because you’re worried about the financial strain, freelancing as a cash flow source is a great idea. Here’s what Ali has to say about it…

Entrepreneurship. Attractive, enticing … and risky. Let’s face it, however attractive the idea of quitting your day job to start your business is, it might just not be a realistic option. Maybe you have a family – or an expensive gadget habit – to support. Maybe you’re not convinced that your dreams can stand up to reality.

The problem is, starting up a business venture while you’re working full time is hard. You might well have already experienced this – either you end up with lots of plans but no energy to put them into action, or you work evenings and weekends and quickly burn out.

There is, however, a middle road between employment and entrepreneurship. It’s called freelancing, and it can help you over that chasm between where you are and where you want to be.

How Freelancing Can Get You Over the Gap

I quit my day job a year ago. I’m still paying my bills and rent and putting some money aside for the tax man.

Like you, I’d love to be one of those internet entrepreneurs earning six-figures a month. I realized the hard way, though, that that sort of success doesn’t exactly happen overnight: I launched a blog, hoping that I could quit my day job and make a fortune from it … and it took eleven months to receive my first Google Adsense check, for a whopping $122.25.

(You might want to take a look at Yaro’s timeline or Darren Rowse’s story if you believe that the A-list somehow got there instantly.)

Freelancing Income vs Entrepreneurial Income: My Real Figures

First, a reality check.

How much might you make from freelancing, whilst trying out more entrepreneurial activities on the side?

To begin with, pretty much all my income came from freelancing: working for clients, rather than generating money from my own ventures and websites. I made a few dollars a month from Google Adsense, and that was about it.

A year on, things are shifting. A few years ago, my income per month, to the nearest dollar for each, looked something like this:

  • $1160 from freelance blogging
  • $165 from magazine writing
  • $460 from new/repeat advertising on my first blog,
  • $97 from sales of my e-course, the Staff Blogging Course
  • $18 from affiliate commission (only got started on this towards the end of July)

As you can see, it’s the freelance work (the blogging and magazines) which is paying the bills. I’m now making decent money from the blog The Office Diet, which I launched in January 2007 – but it’s taken a year and a half to get to that point.

Freelancing Bonus #1: Gaining More Time

It’s only because I freelance that I’ve had the time to start building the other sources of income. My freelancing takes up much less time than a day job – usually around 10-12 hours a week, instead of 40 (plus commute). With the vast majority of my freelancing, I can work at whatever times suit me – giving me a huge amount of flexibility.

By freelancing, you can often double or triple your hourly rate compared with a salary. Sure, you can’t usually work forty billable hours a week as a freelancer – but you can work part-time like I do, and use the rest of your time for other projects.

Freelancing Bonus #2: Gaining Relevant Experience

I don’t know about your day job, but mine didn’t teach me the skills I needed to be an entrepreneur. Freelancing, however, gave me the chance to build up the knowledge and practical experience that I needed.

By working as a staff writer for a number of very big, successful blogs, I had a huge amount of knowledge to draw on when I launched my own blog, Aliventures. It’s taken me under a month to get 150 subscribers – whereas it took me nearly five months to do the same with my first blog.

Could you gain paid experience in something directly relevant to your entrepreneurial dreams, by working as a freelancer? This might mean freelancing in:

  • Copywriting
  • Graphic design
  • Computer programming
  • Social media
  • Blogging
  • Ebook design and publication

… there are a huge number of possibilities.

Freelancing Bonus #3: Gaining Self-Discipline

How self-disciplined and self-motivated are you?

Most of us, when we answer that question honestly, know that we’re far from perfect! If you’ve spent all your working life in employment – where you have to be in the office during set hours and where your boss won’t be too impressed if you take a two-hour lunch or spend the whole day on Facebook – then you’ve probably got some legitimate worries about how you’ll manage to stay motivated and productive as an entrepreneur.

When it comes to putting in the work that you need to do in order to get your business off the ground, get your website launched, build a following or market your product … will you have the strength to keep plugging on, even if you’re not seeing instant results?

The advantage of freelancing here is that it teaches you self-discipline. You don’t have a manager breathing down your beck. You don’t have to be at your desk at any particular time. But you do have clients and deadlines, and you will find that you develop better work habits, better organizational skills and the ability to self-motivate.

(Until you do, you could end up working a lot of late nights and weekends.)

Freelancing Bonus #4: Gaining an Audience

If your freelancing is in any way related to your entrepreneurial efforts, guess what? You’ve got an instant audience – and potential clients.

A big chunk of my traffic for my Aliventures blog comes from the biggest blog I freelance for, Dumb Little Man. Many of the people who’ve bought my staff blogging course heard about it from a blog where I’ve freelanced or worked for free in the past.

You might want to keep this in mind when starting out on freelancing. Rather than working for single clients who are unlikely to be interested in your other projects, look for ways to get your name out in front of multiple people.

And If You’re Already a Freelancer…

Maybe I don’t need to sell you on being a freelancer: perhaps you already are freelancing, whether part-time or full time.

(Or maybe, having read the above, you’re now determined to make that jump from employment into freelancing.)

Here are four things you can do to make that shift from freelancer to entrepreneur:

1. Think “Business”

When I started out, I resisted the whole idea of thinking like a business.

I ignored any advice about partnerships, expanding or forming a company – I was convinced that all I wanted to do was write: if you’ve read Michael Gerber’s E-Myth, I just wanted to be the technician – not the manager or owner.

It took me a while to realize that having a business didn’t have to mean a bricks-and-mortar place where I’d have to do boring stuff like hire and manage employees. (I’m kinda anti-9-5 anyway, so the idea of becoming an employer myself was off-putting.)

2. Sell Products, Not Just Services

If you’re a freelancer, you’re basically selling your own services. One way to start moving towards being a business owner is to sell products as well. There are plenty of options: you don’t need to start printing t-shirts in your basement… (though an ebay business is always an option).

For example, if you’re a writer, you could write and sell an ebook.

If you’re a web designer, make premium templates for WordPress and other popular platforms.

If you’re a photographer, sell high-quality stock photography on istockphoto or fotolia.

3. Promote Other People’s Products

Perhaps you don’t have the time, skills or inclination to create and sell your own products. No problem – you can sell other people’s stuff, and get a cut.

Affiliate sellers sometimes get a bad name – perhaps your association is with shady sales practices, poor quality products and high-pressure techniques. It doesn’t have to be that way at all.

If you want to be a successful affiliate marketer, just think through the products and services that you’ve used and love. Write honest reviews of these (if they’re great products, that’s pretty easy to do). All sorts of companies and businesses have affiliate programs, including:

  • Web hosting companies
  • Software
  • Ebooks and online courses
  • Amazon…

(If you want to see a review that’s worked well for me, of a product that I absolutely love and promote wholeheartedly, check out my review of Glen Allsopp’s Cloud Living. You might be particularly interested to read the comment from Wesley Craig Green at the bottom of that review.)

4. Teach, Coach or Consult

Although this overlaps with freelancing, a great way to seriously up your income is to teach, coach or consult – all activities which can command a very good hourly rate – and where you can often charge multiple people for each hour of your time (eg. teaching a seminar, running an online membership site).

If you’re interested in going the membership site route, a highly-regarded program to get you started is Teaching Sells, run by Brian Clark (of CopyBlogger fame) or of course, Yaro’s Membership Site Mastermind program.

There are plenty of other methods, though. If you want a low-hassle option which involves initial effort followed by minimal maintenance, go the product route, and produce an ebook, audio download or screencast teaching people how to do something that you’re an expert in.
(This is what I did with my Staff Blogging Course, which has been very well received by both beginner and more experienced freelance writers.)

If you’re not sure how to market yourself as a coach or consultant, there’s a whole module in Naomi Dunford’s fantastic Online Business School on Coaching and Consulting – I’ve reviewed the whole of Online Business School, or you can just go straight to my review of that module.

But Don’t Just Stick at Freelancing…

If freelancing’s so great, you might be thinking, why not just freelance? Why bother with entrepreneurial stuff – where you might not see a return on the time invested?

Freelancing is a lot of fun, don’t get me wrong – but it can mean long hours (searching for new work, admin, invoices, etc) and freelancers only get paid for the hours when they’re working.

It’s a great way to start off on the path to entrepreneurship, but don’t get stuck there. There are loads of very successful business-owners who started out as freelancers: Collis and Cyan Ta’eed are a good example – they were graphic designers who launched the Freelance Switch blog and a whole network of sites in the TUTS branding (eg. PSDTUTS+).

Another example of someone you’ve probably heard of is Naomi Dunford, of IttyBiz fame. She started out as a freelance copywriter – and is now the go-to person for (very) small business marketing advice. Her IttyBiz business includes downloadable products, online courses and coaching.

Are you a freelancer-turning-entrepreneur, like me? Are you a day-jobber with entrepreneurial dreams that just aren’t happening? Share your thoughts, experiences and advice with me in the comments…

Ali Hale wears a number of hats: freelancer, post-grad creative writing student, e-book author and blogger are just some of them. All her ventures focus on getting more from life – a topic she writes about on her own site, Aliventures.