Monday, October 25, 2010

Setting a Deadline Date: Freelance Finish Line

Last night I decided to set a deadline date for my transition into a freelance lifestyle. Without this date, my need to continue improving and perfecting would take over and I've read this is often a killer for start-up businesses. I've found that nothing helps you grow more then the challenges and small failures that only happen when you're immersed in a client-based project.
Here are some factors I considered when setting the date:

1. Money. One of the most important considerations (unfortunately) is money. Ideally, I would like to have a 9-12 month buffer of savings that keeps me from sweating the small stuff. Add up your monthly bills, food, and extra expenses and then add another chunk for unforeseen money-sucking events (like your car window being broken for a penny in the passenger seat). Then, calculate the maximum amount you can put away each pay period to cover these expenses. After you have this, ask yourself how many months it will take to save-up the correct amount for a stable freelance lifestyle--and there you have it!

I love using my online banking system because I can schedule my reoccurring deposits along with all my bills. It will even let me know if a future transaction is not kosher so I can drag and shift things around to protect myself from any overdraft fees.

2. Development. Since my specific area of interest will take some time to develop I want to give myself enough time (but not too much) to really narrow my scope and write a business plan packed with information regarding my mission, methods, and resources. This way I have a document I can refer back to when considering the direction of my business and maybe show some interested investors.

3. Life milestones. I am recently engaged, so this means including the wedding and travel expenses in my calculations. I took my total that I would save and subtracted a good chunk of it for this event. Saving for a start-up also means that buying a house will have to wait since a lot of my funds will need to go towards my financial security.

In the end, my calculations are totally based in my ability to predict the future. This means I keep my job, continue with a similar living situation, and consistently cut-down on spending from shoes to french fries.

In light of that, I have also structured two contingency plans:

1. Moving towards part-time employment. As I get closer to my active date since the work load will be getting heavier. This move will effect my pattern of saving but allow me much more time to complete necessary work for the launch.

2. It's quitting time. Let's say I get a promotion and I am able to squirrel away 50% more then I thought, that means I may be able to move on earlier and may be able to dedicated my full attention to my business before needing to get a supplemental job.

Now that I have set a date, it all seems more real; I am now actively working towards a tangible goal. It seems that the success of an independent venture really depends on how much you kick your own butt.

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