Long-Term Considerations for Freelance Designers

Working as a freelance designer is appealing to a lot of people because of the flexibility and independence. Freelancing also can provide designers in a wide variety of situations with a way to earn a living, and in some cases the experience that is gained becomes just as valuable as the income. However, freelancing for the long-term presents some unique challenges that should be considered from the start.

In this article we’ll take a look at 10 things that should be considered before you start freelancing full-time, and hopefully they will help you to be better prepared in case freelancing turns out to be a long-term job.

1. Is Freelancing a Temporary or Long-Term Part or Your Career Path?

Everyone has different reasons for freelancing. For some it can be a starting point that allows them to build their experience and their reputation in the industry before a transition to working as an employee at a design agency or as an in-house designer. For others freelancing may be a short-term solution after losing a job. And for some freelancing may be a long-term part of their career.

Freelancing is capable of serving all of these purposes, but it is important to consider what you want to get out of your time and effort freelancing. If it is a short-term solution that you hope will serve as a springboard to a full-time job you will probably approach it much differently than if you plan to still be freelancing 10 years from now. If you’re leaning towards that long-term approach there are a lot of things you should consider, and that’s what we’ll look at here.

2. Should You Work Under Your Personal Name or a Business Name?

Most freelance designers work under their own name, but if you are planning to freelance for the long-term you may want to consider using a business name. Both approaches have pros and cons, so you’ll need to consider your own situation to determine what is best.

Using your own name is best for building name recognition and a reputation within the industry, and it’s easier since their is no need to form a business entity (this depends on the laws and regulations of where you live and operate the business, so check to be sure). On the other hand, forming a business may be beneficial if you think there is a chance that you may want to expand at some point instead of working independently, or if you may want to sell the business at some point in the future.

For a more detailed look at this topic please see:


3. Are Your Likely to Expand or Hire?

As was mentioned in the previous point, if you are planning to hire other designers or expand your business at some point you may choose to use a business name. There are also other things that you may want to consider if this is a likely part of your plan. First, would you plan to have your team work in a single location, or would you plan to have everyone work remotely? If you’re leaning towards having everyone work from a single location you may want to do some research to see what you will need to spend to rent an office in your area. You may also want to consider the area where you live, and if you would be able to find the right people for your team or if you would have to go somewhere else.

Plans to expand would also impact your need to re-invest in your business, or to come up with capital some other way. Being responsible for employees is a huge jump from working as a freelancer, and it’s something that will require a lot of planning and preparation.

4. What Business Entity Type Should You Form?

If you do choose to use a business name you will need to determine what type of business entity you should form. This is another situation where there is no right or wrong decision, it’s just a matter of what is best for your personal situation. The prudent thing to do is to talk to an accountant and an attorney to get professional advice about which type of business would be best for you, and how it would impact your taxes.

5. Is There Likely to Be a Long-Term Demand for Your Skills?

In an industry that changes very quickly it’s necessary to consider the specific skills that you have and if they will allow you to continue to earn a living in the future. Regardless of what skills and experiences you currently have, you’ll want to continually work on improving and adding new skills as the industry adapts and evolves. That continual development will come in part from being challenged with client projects, but you’ll likely need to set aside time and money for educational opportunities, whether it be books, attending conferences and training sessions, online memberships to training resources, etc.

6. Is Your Specialization Sustainable?

Going along with the previous point, if you have a specialization is it something that you expect to still be relevant and in-demand several years into the future? If not, you should use those same skills that you already have in other ways that will bring more stability. As an example, a designer who specialized in MySpace pages a few years ago is pretty much out of luck today if he or she has not adapted.

Regardless of whether you specialize or not, the industry will change over time and you’ll need to be able to learn new things and stay current with the skills that are in demand. But if you have a specialization you may be a slightly higher risk for the long-term. That doesn’t mean that you shouldn’t specialize, but it does mean that you should be aware of the risks associated with your specialization and be prepared to adapt if necessary.

7. Will You Need Advancement Opportunities?

Most people who chose a particular career expect to be able to advance and work their way up the ladder over the years. With freelancing it’s possible that you could be in essentially the same position for a very long time. You’ll have the opportunities to work with different clients and to mix things up in that way, but if career advancement is a concern it’s something that should be given plenty of thought before deciding to embark on freelancing for the long haul.

As a freelancer there are ways to get the same benefits that you would get from career advancement as an employee. One of the biggest motivations for career advancement is a higher income. As a freelancer you will be  in control of your prices (of course you will need to be able to find clients that also think your prices are reasonable) and you will be gaining experience and hopefully becoming more valuable to your clients over a period of time, so increasing your prices periodically is possible and reasonable.

Another motivation of career advancement is greater responsibility and the ability to have a bigger impact. This type of advancement is also possible by expanding your business and converting it from a freelance operation to a design agency with employees. Although it is not for everyone, if career advancement is a major concern for you this may be something to consider.

8. How Much of Your Income Will You Re-Invest?

Something that many new freelancers overlook is the need to re-invest in the business. Putting some of your income back into your business is necessary, especially if you plan to freelance long-term. Some examples of expenses include hardware and software, educational and training resources, events and conferences, marketing, etc. How much you will need to re-invest will depend in part on your goals and plans, but it’s something that needs to be considered in order to make sure that you have enough money to live on and to run the business.

9. Will You Be Insured?

One of the biggest reasons that many people prefer to work as an employee rather than as a freelancer is the benefits that are provided by employers, most significantly health insurance. Without being a part of an employer-sponsored plan health insurance can be rather costly. Many freelancers are able to get coverage through a spouse’s plan, which is an ideal solution if it is an option. For those who don’t have this option there are a wide variety of types of health insurance plans available and you may be able to get something that would give you coverage in case of an emergency without paying high monthly premiums.

In addition to health insurance, you may also want to consider business insurance. Talk to an insurance agent to see what is available and what would meet your specific needs, but errors and omissions insurance is common.

10. How Will You Save for Retirement?

Another benefit that many employees receive is a 401(k) that allows for retirement savings. Without an employer-sponsored program there are still plenty of options for freelancers to save for retirement, but it will take a little more effort. IRAs (Traditional, Roth, and SEP) are common choices, but speak to a financial professional to get personalized guidance. If you plan to freelance for any extended period of time, retirement savings is something you should consider regardless of your age. Without taking action in this area it’s easy to lose track of time and realize that you’ve missed out on a few years where you could have been saving.

What’s Your Opinion?

For those of you who freelance, what are some of the most important considerations regarding long-term freelancing in your opinion.

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5 Responses

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  • thor, September 25, 2011

    For me, i think the most important consideration for a long-term freelance work is the sustainability of your specialization though you also need advancement in your field to have a greater chance to acquire new clients or business.

    Btw, nice post here!

  • Geoff McMahen, September 25, 2011

    Great list! Many of these things are not taken into consideration when evaluating the decision to freelance. Thanks!

  • aledesign.it, September 26, 2011

    A good article. Important, however, that the freelancer at the end have a concern and a bad way of life compared to having a boss. Then you have to change strategy.

  • Miki, October 4, 2011

    as requested I gonna add some personal thoughts…

    TIME
    First of all, my experience is not much but I can tell you that I am working lots of hours (nor 8 nor 10 as I used to in a design studio) but designing less.

    In a normal work day I would spend

    41% in meetings or answering mails to clients/my co-workers (2),
    11% doing “adm” stuff like going like taxes calculation.
    12% planning what I should be doing
    9% researching and looking for inspiration (procastination…)
    27% designing

    As a designer, spending half of your work-day doing no-desing things is kind of frustrating. So I could tell that the WORST about freelancing is becoming a mailsender-machine…

    Note: Not normal days are usually worse: argue with clients and thirdparties is the easy stuff

    On the other hand, I can have unusual activities like 11 am jogging or Mon-Thu mini vacations. Nevertheless the BEST about freelancing is that most of the time you can do most of your work wherever and whenever.

    MONEY
    Freelancing means: you earn more, you work more, you spend more.
    Remember that it’s not always about money, consider time and “not design tasks” that you must do when freelancing.

    BOSS-FREE
    Having a boss sucks but sometimes not having a boss is far worse!

    Lots more to say but I think it was pretty boring enough, sorry!!!!

  • iewsstbhk, December 14, 2011

    Great list! Many of these things are not taken into consideration when evaluating the decision to freelance. Thanks!

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