if you’re self-employed or want to be, this post is for you

Are you self-employed or want to be self-employed?

The comments section on this post is open for all talk related to self-employment — whether it’s  frustrations with clients, the pure ecstasy of working in your pajamas, the weirdness (and sometimes pure ecstasy) of not having coworkers, what the hell is up with your taxes, questions about when and how to take the plunge into self-employment yourself… bring it on.

{ 322 comments… read them below }

  1. Anonforthis*

    This is so timely! I’m considering a job change that wouldn’t make me self-employed per se but I’d be working on my own as a type of consultant. As of right now, I work for a large company in a bustling office. I like my coworkers and like working with others.

    Any extroverts out there with advice on how to thrive and stay sane working from home and primarily by yourself?

    1. Muriel Heslop*

      I never mastered this. (I am REALLY extroverted.) I’ve worked for myself twice and this was the thing that broke me both times. That, and doing my taxes.

      Things that helped: scheduling breakfast or lunch dates/meetings; joining groups that met at lunch time;
      regular volunteer commitments. I also struggle with structure so it was really critical that I had things planned or else I would look up and find myself exhausted and itchy from lack of human contact. Sometimes, I just worked really early in the morning and really late at night just so I could socialize or attend events during the regular business day.

      Good luck! It’s something I am really glad I tried and I hope it works well for you!

    2. Kmbj*

      My husband is a self-employed extrovert. The answer for him was to not work from home. He tried it out and it made him miserable, so now he leases a desk in a coworking space. He doesn’t have coworkers but it puts him around people he can interact with when he needs a break or needs to bounce ideas off of others.

      1. KT*

        ^This! A lot of extrovert entrepreneurs rent co-work space or a cube with other entrepreneurs; they’re actually getting very common in most cities

      2. Dynamic Beige*

        This is what I was going to say. As an introvert, I don’t miss the office politics, back-biting etc. at *all*. Having to go into a co-working space every day would be… unacceptable to me. I’m in my jim-jams right now!

        There are so many more options in regards to co-working spaces, fast internet, even cafes have wifi. If you can’t stand staying at home by yourself, you don’t have to!

    3. Jennifer M.*

      You could look into some sort of office sharing space a few days per week. There are formal set ups for this of course where you pay rent for the space and it’s got desk, chairs, visitor chairs, meeting room etc. Or there are more informal set-ups. For example, a group of self-employed individuals at my church got together and one or two days a week they reserved some of the rooms at the church and work from there. I think the room rental fee at the church is pretty minimal and I know that when the whole thing started they chipped in to buy the church some improved IT equipment (I think it was some of the router stuff). This way they get some real-time, face-to-face interaction in a low key environment.

    4. SallyForth*

      Plan out of office time. I worked from home for 10 years and managed it by building in coffee dates out of the house . I never answered my phone, though, because that was a boundary into my work space.

    5. Sybil Fawlty*

      It is the most challenging thing for me, definitely. I’m extroverted but require alone time to create, so having my own business is the best option for me. Networking, social and community clubs, and church all have been super helpful.

      I have an office in a Small Business Incubation center, those are awesome! But there are very few people there, and they mostly keep to themselves. I got to know them by buying extra treats for my events, and taking them around to the other offices to get acquainted. :)

  2. ZSD*

    I guess I have a question about the definition of “self-employed.” Does that phrase generally imply that the person doesn’t have any additional employees? I tend to think of people as “self-employed” when they’re a business of one, like maybe a freelancer, whereas if someone owns a business with five employees, I think of them as a “business owner.” Yet those people technically employee themselves as well, so are they self-employed?

    1. Me2*

      FWIW, I thought of myself as a small business owner, not as self employed. Then I would read an article on small business owners defining it as less than 50 employees or under 50 million in annual sales. Guess my 2 employees and one million in annual sales made me a micro business. My husband worked for a company with about 500 billion in annual sales, in senior management, and he always pointed out my business was a complete microcosm of everything he dealt with, it was all just a matter of scale. If I were to update my resume I would say business owner, not self-employed.

    2. Lisa*

      “Self-employed” vs. “business owner” is more of a word choice than a technical difference. You can be self-employed and have employees, or you can own a business and have none. If you own a business and you work for that business, you are self-employed. It’s more of a tax structure distinction, or for marketing reasons as described.

      1. Dynamic Beige*

        I also think that people have different perceptions of the words — Freelancer, Self-employed, Business Owner, Consultant. You read enough clientsfromhell.net and there are a surprising amount of people who think that freelancers work for free.

        1. Children's entertainer here*

          Tell me about it. I get at least one request a week to do a free gig. Usually it is from a nonprofit, but sometimes it’s a for-profit or an individual.

      2. Chinook*

        We just went through this when all our independent contractors were told to go through agency A or no longer work here. Self-employed became a useless term as we discovered 3 types of employees who fell into the contractor category: temp agency employee, sole proprietor (which usually meant only you with no legal distinction from your business) and small business owner (who was usually incorporated in someway and may or may not have had employees). Sole proprietors and business owners still had to provide their own insurance, benefits and payroll taxes but sole proprietors took all business risk as personal risk (which was minimal because we were office staff) whereas small business owners could limit the risk to only business assets and they often split their business into shares between them and their spouse (the only form of income splitting available in Canada). When I went from the temp agency to self-employed, I talked a lot with the others who had been doing this for year to see the pros and cons of both sides and for tips on healthcare coverage. It was great, though, from being a perma-temp with the profit going to the agency but me retaining the risk of no long term job stability and minimal benefits to a sole proprietor who was able to use the same “profits” (i.e. the difference between my hourly wage vs. what the agency was being paid) to fund my own benefits and retirement savings as well as create a cushion to hedge against the same term job insecurity in exchange for applying for a business number, collecting GST and doing some paperwork.

        There was also low overhead for all of us as we essentially worked for our customer at their site using their equipment (which tows the line of us “not being employees”).

    3. Katie from Scotland*

      I don’t know what it’s like in the US but in the UK the terminology comes into play when you register your business for tax purposes. If it’s just you and you trade under your own given name then you’re self employed, or if you trade under a business name you’re a sole trader – otherwise the two terms mean the exact same thing. For tax purposes that means that you and the business are one and the same – your money = business money, business debt = your debt. Or you can register as a limited company, even if there’s just one of you, and this means that you are a director and owner of the company which pays you a salary and dividends. In this instance your money and the business’s money and debts are very separate, and you’re only liable for debts up to the amount that you paid in to the business initially. Obviously ltd companies span the whole range of sizes, but you’d still be able to say you were a business owner.

      1. Dynamic Beige*

        It’s the same way in Canada.

        If you operate a sole proprietorship under your own name (no employees), you don’t need a business licence.

        But, if you want a business banking account, then you need a business licence and they have different tiers with Incorporation being the highest and most complex. As a sole proprietor, I never talk about myself that way. I say I’m a freelancer or I’m self employed or I work for myself. I only use the term Sole Proprietor in accounting or legal ways. No one I meet at a networking event ever says “Oh, so you’re a sole proprietor then!”

        Also in Canada (or at least Ontario), if you earn less than $30K (it might be higher now) you don’t have to charge/collect HST — but then you also don’t get to claim it on your purchases. If you’re registered as an artist, your supplies are sales tax deductible at the till (I don’t know the full ins and outs of that)

        1. Chinook*

          “Also in Canada (or at least Ontario), if you earn less than $30K (it might be higher now) you don’t have to charge/collect HST — but then you also don’t get to claim it on your purchases.”

          This is the same across Canada when it comes to GST/HST (no knowledge about PST, thank goodness). But it is simple, and free, to register for a business number/GST number and, unless you are making big bucks, you only have to file a one page document and remit the taxes once a year (and you can do it online!). If you keep a good set of records (mine is literally a one page excel spreadsheet), it takes maybe 20 minutes to do, and most of that is spent waiting for the CRA website to load.

      2. Noah*

        We have essentially the same setup in the US, although whether you call yourself self-employeed or a business owner doesn’t really matter. It is is more that legal docs are setup for an LLC or S-Corp that make the business its own entity. Sole proprietorship is less paperwork, generally, but you lose some protection.

        I’m a part-time consultant and I have an LLC setup. However, in practice it doesn’t really protect me from debt because the business itself has no credit and I have to personally guarantee everything anyways.

        1. Chickaletta*

          Although, technically if you have an LLC you’re a member of the corporation, not an owner. I have an LLC too and am listed as the sole member. That said, I totally tell people I have my own business and imply ownership because most people understand that I work for myself and that’s all that matters.

          1. simonthegrey*

            I have an LLC with a friend; however it is not our full time business and really couldn’t be, but it is way more serious than a hobby. We went with LLC instead of Sole Prop to have that protection.

    4. L N*

      Really depends on the context. Self employed people ARE business owners, it’s just that if you don’t have any employees it’s a very different animal. Then again, most self employed people have clients and I don’t. So it’s not really defined by the experience either.

      I can describe myself as either an indie author or the founder and CEO of Xyz publishing, either is correct, and it’s going to depend on whether I’m talking to someone already in the industry, or the exclusive country club I’m trying to get a membership at. (Not really, I don’t care about country clubs, but I did use that title in my letter to Club 33.)

  3. curious anon*

    I’m really curious about how part time self-employment works regarding taxes. If you keep a full time job and have a side business, I’ve often wondered if there comes a point where if you make less than X money, you actually end up in a loss in terms of taxes, than if you had made no money at all. Is this foolish, does it all come out because you can deduct business expenses? I guess I’m more curious from the people who are successful self-publishers as a side job; I’ve seen some of them refer to it as grocery money. It’s definitely not enough for the rent, but is it enough that it doesn’t make doing taxes more trouble than it’s worth?

    I realize this is kind of nosy, and all, um.

    1. KT*

      I worked full-time while I was building my freelance business; I started making an extra $400 a month, but after just a couple months, I was making more freelancing than I did in my full-time job.

      At no time did I actually end up with a loss; I did adjust my withholdings from my full-time job (I wanted to delay estimated taxes as much as possible), but I still effectively doubled my income. It was definitely worth it to me, and it helped build my savings/pay down debt so I could go full-time as a freelancer feeling more secure.

      My business has minimal tax-deductible expenses, other than my pens and paper and if my computer blows up, so that doesn’t really contribute anything in my situation.

    2. ElCee*

      The threshold is $6,200/year for earned income, so I’d imagine depending on your tax bracket if you’re hovering just over that amount it might be not worth it. When I took up a second job as a young reporter, it was just enough to pay taxes on AND propel me into a slightly higher bracket, so it was the worst of both worlds tax-wise. Still, taxes aren’t everything. I used that extra money to save for a yearlong sabbatical!

      1. ElCee*

        Er, my Google-fu was really bad. The $6,200 is wrong. I took a snippet of something our tax accountant said (I not self employed but my spouse is) and googled and came up with a bad answer. Profuse apologies!! :-/

    3. the gold digger*

      I had some self-employment income that just wasn’t worth it. I didn’t lose cash, but the hassle of doing the self-employment section of the tax return was such a pain in the neck that I stopped doing SE work. But I didn’t have anything to deduct, either, and I was filing jointly with my husband, who was working full time.

      So yes – I think there is an income level below which it’s just not worth the hassle, but you don’t lose money.

    4. Lisa*

      I can’t think of how you could lose money through taxes. Even if you popped into a higher tax bracket that would only affect the increased income in a progressive system. It is true that the tax structure is quite different and it can take some getting used to.

      When I was really concerned with replacing my salary, I calculated how much I would have made after taxes if I had stayed employed, and compared that to how much I was making after business expenses and taxes while self-employed. This can get a little bit complicated what with the nuances of home-office deductions, tax rules on business meals, etc. so it’s only for spreadsheet lovers.

      But if you’re self-employed on top of full-time employed and you don’t go nuts on the business expenses, you should at least come out ahead by some amount.

      1. baseballfan*

        Thank you for explaining marginal tax brackets….I feel like I go around every forum I comment on, making that distinction for people!

        Agree, I don’t know what kind of business expenses this person is talking about having, but you can’t lose money on a business just via taxes. Now if you spend more than you make, that’s a different story. My husband has a side business in retail which is fairly low margin, and right now he is operating in the red due to some fixed costs. Solution – sell more product! :)

      2. Ask a Manager* Post author

        Yes — you cannot lose money by earning more money in a progressive tax system like ours. You might calculate that it wouldn’t be worth it to you for other reasons, but you will not lose money because you made more money.

        1. Chinook*

          “You might calculate that it wouldn’t be worth it to you for other reasons, but you will not lose money because you made more money.”

          That being said, it might feel like you are losing money if you haven’t saved the money to pay for your taxes as you earn it. Since there is no one collecting your payroll taxes, you need to be disciplined enough to put it in a bank account (your best bet is a separate account with no ability to easily withdraw from it at an ATM) every time you get paid. That way, when your tax bill comes, you already have the money in hand and you don’t have to dip into your day-to-day budget to pay Uncle Sam or the CRA.

          1. Jonno*

            I wish I had done this. I did airbnb on the side for a few years and this came back to bite me.

    5. Part-time self employed*

      Yes, the taxes side of having a small business side job does add some work. But, I’ve found that if I update daily three spreadsheets: revenue, expenses, and mileage (because if your office is “home” then travel to a customer can be an expense) then the actual year end self-employment filing ends up pretty easy. Just take the revenue minus expenses (including mileage) and you get your net income to put on the tax form. You will only be taxed on that net income. Keep your receipts for expenses. Granted, I’m only making a few thousand a year on my side job so the spreadsheets are pretty simple. Just make sure you don’t have more expenses than income and you’ll be good. You end up having to spend a few minutes each day you have side work filling out your spreadsheets, but that feels like nothing, and makes tax time super easy!

    6. Alienor*

      I wouldn’t say you exactly lose money, but if you’re not careful to set aside enough to cover the taxes, you can accidentally screw yourself over. I did that last year–made a few thousand dollars freelancing, underestimated how much I’d have to pay, and ended up way in the hole at tax time.

    7. Yetanotherjennifer*

      It can also feel like you lose money if you don’t factor in social security and Medicare deductions. You pay both your portion and the employer portion when you’re self employees. And it can feel like a loss since that amount is subtracted from your check as an employee. It can also be an actual loss if you don’t account for it when setting your rates.

    8. Stan*

      Freelancing really forced me to become much more organized. The first couple of years I finished my taxes feeling like I had lost money. That wasn’t the reality, but when your estimated return drops dramatically when you enter self-employment information, it feels like a loss. (I have a full time job and freelance on the side.) The second year I actually owed taxes and that was even worse.

      After that, I got super organized. Now I track mileage and other expenses, and I write off my home office. I also put away 25% from each gig. Keeping track of the cost of freelancing and having that cost accurately reflected in my taxes has made freelancing worth it over the years. It feels better because I know I’m not paying more in taxes than I should, plus I have more money in my pocket at the end of the year.

    9. Chickaletta*

      Personally, I don’t find doing business taxes all that hard. I have a really simple setup though – no assets, no employees, cash accounting, etc. I use Quickbooks and it chugs out all the numbers at the end of the year and all I have to do is plug them in on my Schedule C. It takes like ten minutes.

      I have more trouble these days trying to set up my damn cell phone.

  4. AndersonDarling*

    Thank you so much for this!
    How do you handle social security payments? My husband had a teeny-tiny contract gig last year and I couldn’t find any exact information on how to calculate or where to send social security. I’m afraid the feds are going to come after us for their $15.

    1. Muriel Heslop*

      IANAA (I am not an accountant) but my experience is that you don’t have to report or pay taxes on income of less than $600 from an employer. If he made more than that, he should have received a form from his employer. If he didn’t get anything from them, he can still report it and probably use a cancelled check/paystub.

      1. KT*

        ^NO! myth! You won’t get a W-9 for less than $600, but you absolutely need to report that income.

        1. Florida*

          This is correct. You have to report all all all income. As KT said, you won’t get a W-9 for it, but you still have to report it.
          What I do is tell my CPA about every penny I earn. If there is some random income that should not be reported, I let my CPA figure it out.

        2. Muriel Heslop*

          Thanks for clarifying! I got my information from our accounting department – a major school district! Isn’t this something they should know?

          1. Doreen*

            I wouldn’t expect them to know about how you file your taxes. They would know when they have to issue a 1099 or other tax form, but they don’t necessarily know more than anyone ekse about individual tax obligations.

            You have to report all income that isn’t specifically non-taxable (like interest from certain bonds and some goverment benefits) , even illegal income. The way you pay Social Security taxes on self-employment income is by reporting it on your tax return – you’ll pay a “self-employment ” tax that is actually both halves of the Medicare and Social Security taxes.

          2. Kira*

            Probably not, they’re not tax accountants. From their point of view, they need to know if there are forms that the employees must be given. If they don’t have to give you a W-9 form, they’re done. It’s your job to handle your taxes.

          3. ertmeert*

            In a practical sense, it’s really not until they themselves are in your position that they would think about it. They are looking at it from the employer side, i.e. “do I or do I not have to issue a W2/1099MISC in January” :)

    2. KT*

      If it was a small gig where your tax bill would be less than $1,000, no worries whatsoever.

      If it’s more than that, you likely will need to do estimated payments, or adjust withholding from your full-time work to compensate.

      Now that I do estimated payments, I set aside about 1/3 of everything that comes in to go towards taxes; social security is part of the fun self-employment tax

      1. KT*

        -by “no worries”, I mean you won’t get charged an underpayment penalty; you obviously still owe whatever the balance is.

      2. Belle*

        We do almost the same thing as you! My husband does some freelance editing (in addition to his regular job) and we increased his withholding at work to help compensate. We also have started setting aside a portion to “switch” to estimated payments next year as his editing grows. We wanted to set up a cushion first since we aren’t sure how much it will be and there are some times delays in when we receive/recognize income for different clients.

    3. AndersonDarling*

      Thanks everyone! It was about $400, and he received the tax paperwork for it, and we reported it on your taxes. It was just the social security part that I didn’t know how to handle. Do you even need to pay social security on something like this?

      1. KT*

        If you reported the income on your taxes, what you would owe in SS would have come up in your total tax balance; assuming you paid that or got a refund, you’re all good.

        If you were doing entirely-different self-employment estimated taxes, that’s a whole other beast.

          1. baseballfan*

            Yes, self employment taxes cover the FICA/social security piece. It’s calculated separately from the income tax, but still reported on the 1040.

      2. Lisa*

        Self-employment income is subject to an alternate form of social security tax called “Self-Employment Tax” of about 15% on business profit, intended to cover what you and your employer would have paid in SS tax and medicare had your income been from employment.Tax return forms (e.g. IRS 1040) have a line for “Self-Employment Tax”.

        If your business profit is less than a threshold – which I believe is $400 – then you don’t pay SE Tax although you still pay income tax on your profit at your regular tax rate.


    4. Margaret*

      As others have mentioned, social security tax is part of the Self Employment tax. If it’s less than $400 for the year it’s not required, otherwise you file Form SE with your taxes and that gets lumped in with overall tax for the year and your payments and you end up paying in total or getting a refund, just like normal.

      However, also keep in mind that if it’s a one-off or occasional thing, not all contract income is subject to SE tax. (Just like, say, the interest earned on your bank account isn’t subject to payroll taxes or SE tax either – it’s not employment income.) Depending on how the payor reports it on a 1099, the IRS might expect SE tax, even if it’s not supposed to be subject to it, and it may or may not be worth to just pay that than deal with the hassle of IRS correspondence, but it really depends. The more often you do the type of work and the more closely related it is to your normal profession, the more likely it is indeed subject to SE tax.

    5. Chinook*

      In Canada, there is one line that you fill in on your annual filing that asks if you want to pay CPP (our social security) that wasn’t paid by the employer. I nearly missed it this year because the on-line software didn’t ask me the question but I at least knew enough to look through the final document to find the box to check. The CRA then calculates the amount to top you up based on your income and adds it to your final tax amount.

      I think there is also an option for Employment insurance for self-employed (to cover maternity leave and a few other things that are not abut getting laid off or fired) but I have yet to figure out how to do it since I took a calculated risk that I won’t need that benefit since I am in my 40’s.

  5. Aurora Leigh*

    Anyone have a successful craft or farm products business? This is something my parents are thinking of doing post retirement. Any tips?

    1. Muriel Heslop*

      My grandmother has a *very* successful quilting/sewing business. She sells her stuff all over her region at fairs and markets. She has said several times that the best advice she got was to play up the “granny” angle. Her labels all say, “Handmade by Grandma” and she says people love to buy stuff from little old ladies. It’s kind of mercenary, but it has literally paid off for her.

      Her other tip: be nice to everyone. Lots of people will buy stuff they don’t need because you were friendly to them face-to-face. Harder to say no to someone nice.

      My grandmother really is very sweet. Her business advice makes her sound kind of devious!

      1. A Non*

        Your grandmother sounds awesome. Any chance you could talk her and Alison into doing an interview for this blog? As someone who dreams of starting a crafts business, I would love to read that.

        1. esra*

          That would be super interesting!

          I’ve always wondered how people do on the fair circuit + what tips they have.

    2. Farmer's Daughter*

      Not currently. My dad raises cattle for the traditional market and I did spend some time trying out direct to consumer beef. What I found is that what appears to be a large market segment of “local goods” is really broken down into many other micro-niches that don’t really have a lot of overlap. People want non-gmo, or organic, or grass-fed. There is also a lot of misinformation out there. People don’t understand that non-gmo doesn’t mean better for the environment or that organic doesn’t mean humane. The biggest factors for consumers still seem to be cost and convenience. You can overcome cost a bit through positioning as a specialty product, but you have to decide which niche to go for and hope there are enough consumers. Maybe products are easier than food, where people are really picky. I recommend starting small. Things didn’t work out for me, but I don’t regret it (I just have a lot of beef in my own freezer now).

    3. Kira*

      If you have a personal story to weave it, that should help. I think people really go for crafts/homemade because they like feeling close to the source. For example, instead of saying “buy my canned tomatoes” you might share why you’re even doing this — “when I was young, every June we would gather at my grandma’s to can tomatoes. I wanted to bring that same love and personal touch to your home. This can is made with XYZ tomatoes from Farmer Ted’s fields in Springfield.”

    4. SAHM*

      Depends on the craft, depends on the fair, depends on a lot of things. For me (soap maker) I’ve decided to try to do things wholesale to local stores, doing the local or state fairs were just too draining. I would need to make enough soap a month or two out (takes 4-6 weeks to cure), then package it up the week before the fair, label it, box it up, stick it in the car with all my tables, chairs, tablecloths, display items, pricing stuff, make sure I have plenty of ones and fives in my cash box. Then get up crazy early the day of the fair to drive out there and set up, and then be “On” for the next 8-12 hours, pleasant to customers, etc. THEN I had to pack up my booth, clean up my area, and drive home and unload my car bc I usually take out the kids car seats to fit everything in and I typically need to drive the kids somewhere the next morning.
      Plus, while it only costs X to make the product, it costs Y for the booth (anywhere from 25-a few hundred dollars, there are some that are in the thousands), plus Z for the cost of the tables/chairs/display, and W for the gas. So you know you need to sell for V$ but also Q amount to just cover the cost of the booth if you want to break even. Which means your pricing can fluctuate a bit depending on the fair.
      Also, not all fairs are created equal. You can shell out 300$ for a two day 7am-6pm big name event, and make 600$ but you could also pay 25$ for the local school garage sale type event that’s only from 8-4 and make 200$. After the cost of the booth & the cost of the product sold, you could actually be making more per hour at the small school event then at the big name event. Plus, the school one is local so gas+wear and tear on car= negligible but the big name event can be an hour or two away, so gas is a factor there.

      1. SAHM*

        Oh, and I have a supportive hubby who watched the kids on the weekends (cost of childcare would be something else to factor in), is generally ok that the house is in a constant state of soaping prep, and knows the day after a fair I’m to drained to be a human being much less a great mom/wife.

    5. Not So NewReader*

      If the area your parents live in does “tours”, tell your folks to go. This will give them an opportunity to talk to other small business owners. Some areas have cheese tours, fiber tours, maple syrup tours, etc.

      If they plan on selling their items at a farmer’s market then they should frequent markets to get the flavor. Farmer’s markets can be surprisingly competitive for space. Having space in a farmer’s market is a commitment bigger than marriage in some regards.

      They can also check with their county level government to see what advice they may have.
      There maybe a SCORE in their area, a group of retired professionals who give free advice.

      Many people here bring their products down to the city, where they can get double or triple what they would up here. The point here would be for your folks to think about what level of profits they are targeting. Some folks are satisfied with “fun money” and some folks actually need the income. I have a friend who lives very simply, he does not mind that his products and services are below market rate. He feels that he is helping people who may not otherwise access products and services like his.
      There is a lady who opened an NPO that gives a stage to local performers. She is fully aware that when she quits the business is over because not many people are going to work so hard for so little cash in return. Her interest is promoting local talent.
      These examples are fine as long as the owners are reaching their targeted goals.

      Being rural, having an internet presence is a must. There are just not enough local people to sustain many of the craft/farm businesses.

    6. Proprietress*

      We have a semi-successful jewelry business. It’s kind of niche and has a very unique name: Harlan’s Emporium of the Curious and the Bizarre. It isn’t quit-our-day-job successful, but it pays for itself and we did have a profit last year. However, it is a lot of work. We’re constantly innovating, looking for new events at which to sell, joining groups online to spread information about our product, experimenting, etc. In addition to the product we sell, we as the owners are part of the “display”, so to speak. We sell at conventions and events like that, so we also have costumes/garb because it is part of the experience we are offering.

      My business partner can sell ice in winter. She is top-notch. As for me, I try to keep everything organized. I do all of our photography, keep up with mailing information, track Etsy views, etc.

      The best advice I can give is to be realistic about prices for the market they are selling in. We have been told at times that we price our pieces too low, generally by family and well-meaning friends, but years of market research (spent selling at actual farmers markets and fairs) has taught us how much people will pay and what they expect to get. However, for many people, just the words “Everything here is handmade or hand-painted” is enough to make them take a second look, since hand-made has become a lot more rare.

      Also, experiment with the market. We sell Steampunk and fantasy inspired pieces. You’d think steampunk conventions would be awesome for us, but in fact, we do much better at other cons. It has been our experience that we are good with people new to Steampunk and interested in the look without the investment, but people who are serious in the steampunk culture tend to already create their own elaborate pieces.

  6. Natalie*

    I love working for myself as a freelancer, though the flux of work and money can really be frustrating when you’re getting started. I’m putting new things in place to hopefully get me some more leads, but I can definitely say there are times when I look at job postings just to see what’s out there. Then I remember that no workplace is going to let me wrap myself up in blankets at my desk or let me leave work early to take my dog to obedience school..

    I’ve only been at this for about a year, so I’d love to hear from anyone who has done this longer than me and share their early day struggles if they have any. When does it stop feeling so daunting? Or does it ever?

    1. KT*

      I’m a scaredy cat, so I spent a long time full-time working at a regular job and freelancing on the side.

      One of the best tips I ever got was to save 3 months of your writing “salary” into a separate bank account. Then when I transitioned to working full-time, at the first of the month, I would draw out the salary I had determined for myself (based on my lowest earning months–it was enough to cover bills + a little padding) from that account.

      Because I had bolstered it with 3 months worth of money, I wasn’t sweating when clients were a little late paying, or the bookkeeper was on vacation, or the client who only pays on the 30th if it’s a full moon….The money could trickle in (and I’ve always had contracts, so I’ve never had a client just not pay), without it being an OMG HOW WILL I EAT crisis. That made the transition feel much smoother and more secure.

      1. Lisa*

        THIS. You’ve simply got to have a buffer for your cash flow, and shift your mind-set away from the idea of regular paychecks. In addition to business and personal savings accounts, I also use credit cards with 0% interest intro rates for expenses. Then I save the equivalent cash in a special account. So I’m not actually “in debt” but I keep that cash freed up in case its needed. Great for the peace of mind, and when the intro rate is up I just pay it off.

        1. Rana*

          Yes – instead of regular paychecks, I think in terms of projects and seasons. There are times of the year when the queries come thick and fast and they alternate with periods where there’s nothing going on. You need to think about how you stay connected during the off seasons and how to handle the gluts.

          It’s almost a premodern sort of time – seasons and harvests and quiet times, and the work not being done to the clock but by the task.

          But that’s a big part of why I like it.

      2. L N*

        It doesn’t ever stop being a little bit terrifying and a lot bit exhausting, but if you read aam regularly you’ll be reminded why it’s so great to work for yourself and not somebody who wants your kidney.

      3. Chinook*

        “Because I had bolstered it with 3 months worth of money, I wasn’t sweating when clients were a little late paying, or the bookkeeper was on vacation, or the client who only pays on the 30th if it’s a full moon”

        This is important because I don’t know about bankruptcy laws in the U.S., but, in Canada, independent contractors are put in the same category as every other creditor if a company goes belly up. Employees are guaranteed payment for time worked and then everyone else could get pennies on the dollar for any monies owing. So the risk of not being an employee is the possibility of not being paid, which is one of the justifications for why you charge more than salary+benefits+expenses if you were an employee. The profit is to help balance the risk.

    2. ElCee*

      I have many family members and friends who have struck out on their own. Three in particular have been successful for 8-10 years. The common thread is time and word of mouth. These people all work in services (vs. selling products) so that may affect it, but basically, the client base was built one client at a time…slowly…then as happy clients spread the word, faster and faster. The hustle never quits, but it does even out.
      Also, what I find interesting is that these people all started out gaining clients different ways, which all were specific to their industry. One focused on SEO, one put flyers up in community buildings and advertised on Craigslist (really!), and one got all his clients via word of mouth. He literally started with one client, and that became two, and that became four, etc.

    3. Maxwell Edison*

      I’ve been a freelance editor for a year and a half now. I’m lucky in the fact that we can for the most part live off what my husband makes, and my SE income is for occasional expenses like property taxes, tuition, etc.

      I try to cast my net pretty wide for clients. I’ve gotten some clients through Upwork and Freelancer.com (though they ding fees from you), associations like Editorial Freelancers Association, and postings on boards like Kboards. I’m also getting a lot of repeat customers and referrals lately. So it does take time, but the flux is always there. I got really nervous early this year when business was scarce in January, but I realize that’s going to be par for the course, so this year I’m going to promote the heck out of my books (I’m also a writer) in December/January to make up for the lack of editing income.

      I guess my advice is to never get complacent. I haven’t had to “hustle” for any work for the last couple months, but I know all that could change at any time.

      I also recommend staying in touch with your clients. Set up an email list through MailChimp so you can let longtime clients know of any discounts they can get and let clients know of any times when you’re unavailable (i.e., taking a week off for vacation).

      1. LL*

        How did you get started as a freelance editor? Did you do editing at a full time job and then go freelance?

    4. Lindrine*

      How about contracts? I’m more comfortable with the idea of making products instead of dealing with clients, but clients would be quicker in the short term money wise maybe.

  7. Sarah*

    I am going out on my own next month with nonprofit consultanting. What time tracking app is best to track hours for individual clients?

    1. Lisa*

      I tried a few and settled on TimeCamp. It’s very affordable for one person. One thing I like about it is that if you use a project management tool such as Asana, you can synch your tasks between the two systems. Very helpful for managing exactly what (and who) you spent your time on.

      Don’t forget to also track your un-billable hours, such as time spent on sales calls, transit and contracts, so you can gauge how profitable each client really was.

    2. Dynamic Beige*

      Depends on what your requirements are.

      Do you want to pay one-time or monthly? Is logging into the internet a problem? What kind of phone do you use?

      I’ve been using TDF Tracker for a few years now. I like it because it’s a pay-one-time and doesn’t need the internet to log anything, it’s all on the phone. Also tracks mileage and expenses. Creates reports and I think invoices too (but I don’t use that)

      There are things I don’t like about it but short of developing my own app, I can’t see those features being implemented any time soon.

    3. The Wall of Creativity*

      I use HoursTracker. Also good for any permits that have to do time sheets dividing their time up into different areas.

  8. Vin Packer*

    Any freelancers who wouldn’t mind walking me through how they do their taxes? I have just sort of fallen into some freelance work and I have no idea where to even start or what the smartest way to handle it is.

    1. KT*

      Are you working full-time while you’re freelancing, or are you free-lancing 100% of the time?

      If you have a regular job too, the simplest way is to increase your withholding from your main job. So let’s say you make $300 a month freelancing. I always plan for a third to go towards taxes, so I’d adjust my withholdings to take out an extra $100 a month. Easy peasy!

      If you’re freelancing full-time, it’s a lot more difficult. You will have to do estimated taxes, self-employment tax, and other fun. I highly recommend working with a CPA or an accountant specializing in freelancers, particularly for the first time you file. If you fail to do quarterly payments, you can end up with extremely high penalties, so it’s important to do it right from the start.

      1. Vin Packer*

        Quarterly payments? Oh my….I didn’t even know that was a thing! Already you have been incredibly helpful!

        I don’t currently have a job, but my spouse does. Could we adjust his withholding, you think?

        1. KT*

          I’m not an accountant, but it depends, such as if you file jointly or separately. If you file jointly, you should be able to adjust his withholding (but definitely check with a CPA on that!); you’ll have to take more out now since you haven’t been paying taxes on your income earlier in the year.

          How much income are you making from your freelancing (no need to answer here, something to consider!) If it’s more than $3,000, then your tax liability is more than $1,000 and you need to do quarterly taxes. Under $1,000 you can do your taxes as usual.

          1. baseballfan*

            CPA here. Definitely this is the ideal solution, assuming a joint return is filed.

        2. Not So NewReader*

          I took on some extra work where I was paid as a freelance person would be paid. My bank let me set up a specific account to use for taxes. I threw money from each payment into the account and watched to see if I needed to make a quarterly payment. I never did need the money, but it still sits there so I do not get caught short. I stopped making deposits into the account a while ago.

    2. Tax Accountant*

      Of course I would say this, but you can set up an appointment with a CPA to go over how to set everything up.

      -Typically I recommend that people set up a separate bank account that they run all business expenses and income through. That makes it WAY easier to keep track of everything. The more organized you are, the cheaper your tax accountant bill will be. Box of disorganized receipts? Nooooo. Your bill will be out the wazoo.

      -If you make money, you’ll have to factor in self employment taxes. If you start to make a ton of money, you will probably need to start paying quarterly estimates. An accountant can calculate this for you.

      -You need to make money in 3 out of every 5 consecutive years so the IRS doesn’t come down on you for hobby losses. Basically, people were setting up fake “businesses” and taking a loss year after year to reduce their taxable income. The IRS noticed this, and now audits people who have losses year after year.

      -You can have your spouse up his withholdings to cover the taxes on your income. It doesn’t matter who pays the taxes, just so long as the taxes are paid. But yeah, talk to an accountant.

      1. Tax Accountant*

        Oh, and if you do become successful enough to need a bookkeeper, for the love of all that is holy, hire someone who has an accounting education and experience to do your books. It makes me so crazy to see people get their cousin Bob who is “good at math” to do their books, when cousin Bob has never even heard of double entry bookkeeping. I’ve seen companies start small with cousin Bob as bookkeeper and end up making millions but never replace Bob, who is so incompetent he would not have the first clue if someone was stealing from them. You need someone who knows what they are doing once you are making enough money to care if it goes missing. Now I will get off my soapbox.

        1. baseballfan*

          Haha – I was unemployed for several months and did a little freelancing to fill the gap, and had several jobs from people who had set up their own books in Quickbooks or the like but had no idea what they were doing, and had ended up with a big mess (which they paid me to clean up!).

        2. IRS Auditor*

          I am an IRS auditor in SB/SE (Small Business/Self-Employed). Virtually all audits result in adjustments and the vast majority of those are due to the circumstances that Tax Accountant describes above. Just because you are good at consulting/quilting/making widgets/etc. does not make you a good bookkeeper or accountant. At a minimum, perhaps a consultation with a reputable CPA at the outset of your self-employed venture could enlighten most self-employed people as to what is and isn’t deductible, what kind of records they need to keep to substantiate their expenses, etc.

    3. Ask a Manager* Post author

      I use taxact.com. It’s very simple — it just asks you a whole bunch of questions, you put in the answers, and it spits out your tax returns. I am self-employed and have pretty complicated taxes and it works well for me. This year, I used a CPA to see if he would save me any money, and I also did my taxes through taxact.com so that I could compare his results with mine (so I could spot it if I was missing something on my end). Our results were nearly identical (about $25 apart).

      He charged me $1200. Taxact.com charged me about $15.

      If you’re self-employed, you do need to make quarterly estimated payments throughout the year. The IRS has a calculator on their website that will help you figure out what they should be. (This is sort of the same as your employer withholding taxes on your checks throughout the year; the idea is that you should be paying in all year long, not just in one lump sum later.)

      1. Sybil Fawlty*

        I second this advice. It’s also good for when you are thinking about doing something new with your business, but want to check the tax ramifications first. For me, this is just one of the Costs of Doing Business.

      2. Rana*

        Yes. It’s also helpful if you are self-employed but married, because that can complicate things significantly. (Our CPA has done things like running the numbers on filing separately versus together, for example, and plans out our quarterly payments.)

    4. Vin Packer*

      Thanks, everyone–and Alison, for her reply and for setting up the thread. This is all very illuminating. I haven’t made enough money yet to worry about earlier in the year, but I’m going to get on top of this starting now.

    5. Stan*

      Keep track of everything. Track mileage. Keep a detailed calendar with date, time and purpose of trip. Save receipts. It makes your life so much easier at tax time to have it all in one place. I do gig work, so I use Outlook calendar to keep track of gigs and any planning meetings. If there are expenses associated with the gig, I scan the receipt and attach it to the calendar appointment. I also keep a spreadsheet with running totals for mileage and expenses. Come tax time, I have totals all set and all my documentation together. It’s made my life so much easier.

  9. LQ*

    I’ve started doing some small self publishing and audio stuff this year so sort of self employed-ish. And I’m already getting worried about taxes. What are good, reasonable priced options for someone to help when that time comes around? (I’d rather not spend more on doing taxes than I make all year…) And are there any other things I can do to make it easy when that time comes around?

    1. ElCee*

      An enrolled agent is what we have used. We originally went to a CPA after a really bad year with TurboTax (shakes fist) and he basically said “yeah…not high enough net worth, try an EA.” We’ve used her ever since. The cost depends on how complicated the taxes are but has never been above $500.

      1. LQ*

        That sound like it might be good. How did you find an EA? (I’m very confident my net worth won’t be enough.)

        1. Nervous Accountant*

          I’m an Enrolled agent :)

          You can find one by searching “national association of Enrolled agents” and it’ll direct you to a site to help you find one near you.

            1. nonegiven*

              An enrolled agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels—examination, collection, and appeals—of the Internal Revenue Service.

              1. pandq*

                Re: Enrolled Agent (or E.A.). It also should be said that although we pass an exam given by the IRS, we work for YOU, not the IRS, even if “agent” is in the name!
                And we need 24 hours of continuing ed in taxation per year to stay enrolled.

    2. KT*

      When you say you started this year, do you mean January/February? If so, unless you’ve been paying additional taxes through a regular job, you need to do estimated payments each quarter or get hit with hefty penalties. If you haven’t done that, I highly recommend meeting with a CPA or accountant to get you squared away. The next “due date” is June 15.

      I visit my accountant twice a year, and it’s $300 for the “let’s discuss what’s going on and how bad my taxes will be” and $600 for the actual filing of horrid quarterly taxes. I could do it myself, but it scares me so I throw money at the problem.

      1. LQ*

        Yes I mean jan/feb, but I’ve earned less than $2 ($1.73!!!) so far, so I’m REALLY not worried about my taxes being high. I expect it to get a little more but I’d be surprised if it was more than $500 this year. Which is why I don’t want to spend more money on a tax person than I earned.

        I do have a regular job which I expect to keep (because $1.73, plus I like it) but I’m not sure I need to up my withholdings yet since the amount I’ve earned and that I’ve gotten a refund and will likely again this year aside from these earnings, likely including these earnings. The whole spending $3000+ a year on a tax person is what I desperately want to avoid.

        1. KT*

          If your freelance income for the year is less than $1,000, do not worry about quarterly payments. Just add that extra income to the “other income” line and you’re fine.

          1. LQ*

            Oh! Fabulous! That is much easier. Even if I do well I expect it will be a couple years before I get there. Thank you very much.

      1. LQ*

        I’ve used this in past years with just my boring taxes and it has been easy, it is really good to know I can go forward with it in the future. Thank you!

      2. Chinook*

        AAM, please tell me that taxact.com is willing to be one of your sponsors. If I was in the US, I would use them based on your comments.

  10. LiteralGirl*

    My husband has been self employed for the entirety of our marriage, which meant we had to pay for our health insurance in full while I was home with the kids. I was home for 10 years, and finally got back to work when the cost for our family was just about equal to our $1,500/month mortgage (this was pre-ACA). I now work for a staff model HMO and our insurance package is amazing, so it felt like I was making an additional $1,300 per month on top of my pay. So, if you’re thinking about going into business for yourself and have no access to company subsidized health insurance for you and your family, do take the cost into account!

    1. Lisa*

      This is a major factor but the ACA has made this so much less scary and difficult than it used to be. I pay my family’s (silver plan) insurance bill with a few hours of freelance work a month, and there are tax benefits as well.

    2. Self employed*

      My health insurance premiums went up 40% last year (I buy on the ACA exchange). It is awful and could be a mortgage payment. Don’t assume that all is ducky and cheap bc of obamacare. :(

      1. an anon*

        Unrelatedly, most people on the ACA exchange would have saved money if they had shopped around and switched plans during open enrollment season. This year, do check around and see what plans are available–there may be one comparable to your current plan with lower premiums.

  11. Florida*

    One of my challenges is that it is so easy to get distracted by websites like this one. If I worked at an office that blocked this site, I wouldn’t have that issue. ;)

      1. Florida*

        I don’t really want to block it. But there are days where a spend alot of time on something that isn’t really something I need to be spending time on. If I were in an office working for someone else, I’m sure I would do it some, but I would feel like I generally need to work between 9-5. Now, I figure I can waste two hours in the middle of the day and make it up later.

    1. themmases*

      In addition to Leechblock, I like using a pomodoro timer. You can get plugins for your browser that will loop a custom timer, then I leave that tab open on top so if I try to click over to my browser, the timer is the first thing I see.

      Also, it helps me a lot to end each day by making a to-do list for the next day and an explanation of where I left off/what I was trying to do. I find I get started procrastinating first thing in the morning when I’m not sure where to start, and if I start out that way, I can easily go the whole day in second gear.

      1. Rana*

        Freedom is another blocker, if you’re on a Mac.

        But if you’re really struggling with this, something I find that helps is to set up places to work that you only work. If you usually surf on the couch, don’t do your work on the couch. If your work is at all portable, going someplace else like the library or a coffeeshop is also good. If I’m in a really distractible mood, I’ll sometimes even leave my laptop cord at home, to force me to get everything done before the battery poops out.

        There are all kinds of tricks and strategies; you’ll just have to play around and see what does, or doesn’t, work for your own particular personality.

  12. Ash (the other one)*

    So I do some on the side consulting but my husband has been self employed for almost a decade, long before he met me, as he had a truly abusive boss before going out on his own. Now, however, as we have a 7 month old (and he stays at home with her), we’re talking about him going back to work for someone else. When we have to pay for things like preschool and other expenses, not having a steady paycheck to count on is really really tough to budget and my paycheck isn’t quite enough to pay for everything (especially once we throw preschool tuition in there, ugh!).

    So self employment is great when you don’t count on a check every 2 weeks.

    1. Lady Kelvin*

      Yep, the lack of dependable paychecks is what makes me never want to go into business for myself (although I have for temporary contract work, but it was either that or be unemployed) because both my parents are self-employed, and watching them struggle for my entire life has made me know that I never ever want to own my own business and that having a dependable paycheck/vacation time/sick leave/health insurance/every other benefit that comes with having an employer is the most important thing to me. My husband wants to start his own consulting business because many of the people he works with left the company to strike out on their own and all he sees is how much money they make and how easy it seems to be. His dad has a very cushy government job his whole life and just doesn’t get how much work it is to be self-employed and how stressful and how significantly it will impact our marriage. But all he sees is the gross income they make (and not how much they actually have after paying taxes and health insurance, etc) and he thinks its unfair they make so much. Its a constant discussion in which I always say, no thank you, I have no interest in doing that I don’t actually think you will make more money than you are now (especially when considering the employer matched retirement income!).

      1. TL -*

        My parents are self-employed and they’ve actually always felt very steady to me, money-wise. But my mom is really good at managing money and I think they had at least one savings account set aside for rainy days, along with one for general emergencies and several for likely emergencies.

        But I do think it depends a lot on what your basic happy level of living looks like and how much work managing finances feels like to you.

  13. ARKD*

    I’ve been thinking over the idea of leaving my full time job to become a full-time writer for a solid four years now, but the leap is just terrifying–I’m constantly thinking about money and the possibility of failure (I’m unfortunately a huge over-thinker so I can petrify myself with ease). Does anyone have advice on taking that very first step into leaving a full time position for self-employment? Any tips on those first few days/months/years? Support systems?!

    1. KT*

      Save. Save. and save some more. I would not make the leap until you have a fairly stable list of clients AND had a few months saved. Writing is fickle work, and clients sometimes disappear overnight. It CAN be done, bit I always recommend having a good emergency fund and some good solid clients before making the leap.

    2. Dynamic Beige*

      Aside from the save, save, save advice… start looking at other people who have successful freelance writing businesses. Ed Gandia has a podcast/training courses where he talks about being a freelance writer. There are a few others, but I forget their names (he interviews them on his podcast).

      1. MsChanandlerBong*

        Ed Gandia is great. I’d also recommend Carol Tice at Make a Living Writing and Jen Mattern at All Indie Writers.

    3. just laura*

      I think the way to do it is to make it a side biz for a while. You’ll get your feet wet, make extra income, and wear yourself out doing it– but it’s not such a scary leap then!

      1. Sybil Fawlty*

        I agree with that. I’ve been in my small business for 5 years, and even in that time, things have changed in my industry. It is super unpredictable to work for yourself.

      2. Rana*

        Yes. And do it for at least a year, to get a rough feel for how work ebbs and flows.

  14. MindoverMoneyChick*

    Recently started my own business after many years in the corporate world. I’m and introvert and thought I’d be fine working on my own. Also I was very sick of office politics at the end of my run and was excited about never having co-workers again.

    Found out of course there such a thing as too much alone time for this introvert and I there’s a lot about working in a team that I miss. I’ve addressed this by making sure my weekends are booked (whereas before I liked weekend alone to recharge) and also scheduling some evening activities. At first I tried to schedule more lunches but found that interrupted the flow of my day too much.

    Also I’m now hooked up with a group of other self-employed folks that act as a substitute for working in a team which is really nice. One of them video chats with me every morning to discuss our goals for the day. This has helped a lot.

    1. FormerEditor*

      I love the idea of getting together with other self employed folks and doing video chats. Can I ask you how you found other self-employed people to do this with, if you didn’t know them before? I’m just wondering if people have had success making connections over social media or whatever for this purpose.

  15. KimmieSue*

    I’ve been self-employed for almost five years in a service related business.
    Yoga pants, all day, every day
    I’m an early riser so I work early and am often off by 2 or 3 pm
    As a consultant, much of my advice is listened too and adopted. The SAME advice I would have given as a corporate employee. What’s up with that?
    No guilt when the sun is out and I don’t feel like working. Don’t need to clear it with my manager.
    No senseless meetings! Every single one has a purpose and is usually quick & on-point.

    Taxes. Tried handling on my own the first two years and failed miserably. I now have a bookkeeper and a tax accountant. Having a home-based business without many deductions (office space, overhead, equipment), I’m pretty much in the highest tax bracket.
    Healthcare. It was extremely expensive for my small family to have minimum coverage with huge deductibles. Better now as we’re covered through spouses employer-provided health plan.

    1. Lisa*

      I’ve experienced this too! It’s one of the reasons I never want to go back to employment.

      “As a consultant, much of my advice is listened too and adopted. The SAME advice I would have given as a corporate employee. What’s up with that?”

      My theory is that consultants are supposed to be smarter than you, that’s why you hire them. No one feels threatened by a knowledgeable consultant. But internally you run into competition between co-workers, and sadly, some bosses get very uncomfortable when their employee knows more than they do.

      1. Kira*

        I also ran into situations where the boss assumed that the employees were just inexperienced or “didn’t understand” what she was looking for the way a consultant did. She literally hired people to train up into a new skillset, then dismissed everything they did because they had been untrained when first hired.

    2. Florida*

      The healthcare is a big deal. I used to have an individual plan that was very expensive and barely covered anything because of pre-existing conditions. Now, I have an individual plan that is expensive, but at least there aren’t any pre-existing conditions. Thank you Obama.

  16. CM*

    I’ve thought about going off on my own (I’m a lawyer) but there are a few things that give me pause:
    1. Constantly being on clients’ schedules rather than my own, and never getting to take a break, go on vacation, etc.
    2. Having to collect on unpaid bills.
    3. Constant networking/client development.
    4. Not having anybody else to learn from. I’ve always learned a lot from my colleagues.
    I feel like a lot of the solo lawyers I know eventually get sick of it and can’t wait to be somebody’s employee again. Any thoughts, from lawyers or others?

    1. Lisa*

      Not a lawyer, but my thoughts on your concerns:

      1. I’ve found this to be the opposite. I just set my boundaries and let my clients know when I’m available. Unlike a boss, I don’t have to provide any explanation. Dentist, pedicure, networking event, nap… If I want to go out of town without losing income, I work from wherever I am by phone and internet – which is how I mostly work anyway.

      2. I haven’t had this problem yet but I think this can be outsourced to people who are good at it.

      3. More work in the beginning and then word of mouth kicks in over time. There are also some fun and clever ways to get yourself out there – but then my consulting practice includes marketing so I love thinking about that side of it.

      4. I schedule collaboration sessions with my freelancing friends and colleagues with complementary skills. One friend does similar work but is very technical whereas I am very strategic/creative. So he helps me fix tricky bugs or learn new technical tricks, and I help him think through business plans. I’ve found this super effective for all involved.

    2. Anonymous Fundraiser*

      No help to offer, but my husband is in a similar boat as you. He has worked for a very small practice for the past 8 years, and will likely be “hanging a shingle” very soon. For him, I worry about a steady stream of income (he’ll be fine if his current clients come with him, which seems likely not not guaranteed), administrative tasks/billing and court filings (he’s a litigator).

      Before I would sign off on his solo-practice, I asked him to go through the exercise of creating a business plan and marketing plan. He’s shown me that it can be very lucrative, but I’m also worried about the ebb and flow of business.

    3. Manders*

      (Full disclosure: I work in legal marketing, so I’m totally biased here)

      Before you go off on your own, put some serious thought into your marketing and admin needs and how many people you’ll need to run a business. I’ve known too many lawyers who thought they could hire one person at close to minimum wage to do their admin work AND marketing AND accounting AND client relations, and their business was always a mess because very few people are competent at all of those things and the ones who are will either cost an arm or a leg or jump ship the moment they find a better opportunity.

      Also, do some research into your field’s marketing strategies, because legal marketing can get very expensive very fast, and there are a lot of people out there who will try to convince you that you need web hosting or radio ads or ppc campaigns or whatever they’re selling for twice the price at half the effectiveness. Know your stuff, or be prepared to hire someone who knows their stuff.

      1. Anonymous Fundraiser*

        This is great advice! Can you recommend some free or cheap resources to learn more about legal marketing? My husband’s plan includes targeted direct mail, which I know from my own background won’t likely lead to a high yield prospective clients. I think it can be a valuable part of a larger strategy though.

        1. Manders*

          What field and market is your husband trying to target? That will change the game considerably. Also, if it’s too close to mine, there’s a limit on what I can blab about because I have a non-compete :(

          I would be very, very cautious about direct targeted mailing, especially if his field involves clients who are hurt or grieving or contemplating divorce or otherwise likely to be creeped out that a stranger has this information about them.

  17. Vanishing Girl*

    Does anyone have experience in consulting for libraries/archives/museums? I’ve done a couple consulting jobs for organizations I know well, and really enjoyed them. My main areas of specialization are a/v preservation, digital collections and user experience. I’ve thought about going into consulting, but I’m just not sure how to go about it and if they’re really used enough in this field to even consider.

    1. Laura*

      I interned with a branch of the National Archives and because it was run by the federal government, it was HARD to get in, even as an intern. You’d probably have to liase with the right people to get an “in” so that you could consult. Maybe your network could help, but it might be easier to start off with private institutions first.

    2. Weekday Warrior*

      Yes, this type of consulting is a growing area! The in-demand consultants right now seem to be those with solid reputations from careers in libraries, etc., but I think that could change as the demand will exceed the supply. Once you’ve built a client base, it will snowball from there.

    3. Sarah*

      I am currently in a museum (spent my last 10 years in arts and culture orgs). You can certainly go into this as consulting work as often those areas (preservation, digital collections) are projected based and museums doesn’t keep those skills on staff FT. For example, as a student, I worked at the Peabody Museum on a digitalization project that was grant funded for two years. They hired a FT contract position to supervise and lead the photo negative digitalization with a couple of student workers. I will say that I think most of your jobs will be grant funded so you should learn (if you don’t already) how to write grants so you can assist the staff to submit.

    4. Occasional Consulting Archivist*

      I agree that this is a growing area with opportunities. I’ve done quite a bit of consulting work on the side, in addition to my FT job as an archivist, and I’ve considered moving into FT consulting. Some stuff I learned that might be interesting for others:
      – The clients might not be who you assume they’d be (LAMs). I’ve worked for a private collector, a design company, and a historical society. The people I know who are FT consultants in the field either work for businesses and larger non-profits doing stuff like digital asset management, or they are late-career people with stellar reputations who do LAM-specific management consulting – but the clients are businesses that serve LAMs, governments/institutions, or consortia.
      – The high-dollar consulting gigs seem to be in highly technical roles (example: helping a consortium implement new software), the management scenarios I described above, and government contracts.
      – You need to either be in a major metropolitan area, or be able to travel. I live in a medium-sized city and there is probably not enough work here locally for me. I would need to travel to other client sites.
      – Diversifying skills is good. I have a very classic archivist background, but that’s maybe half of what my actual consulting work looks like. I would diversify even further if I went FT.
      – Expect to spend a lot of time throughout the project educating the client. There’s way more of this than I expected. I had a “duh” moment when I was complaining to someone that my client doesn’t know what they want, doesn’t know anything about archives, etc., and he said, “Uh, yeah, they don’t know what they’re doing. That’s why they need a consultant.”

  18. Laura*

    I’m only 22, but I can’t ever envision being self-employed. My current employer is very secure and offers a lot of benefits. I like having an office to go to every day because I’m an introvert. Going to work every day is good practice for interacting with people! Plus, insurance is just so expensive, and I’d rather have it provided.

    1. Ask a Manager* Post author

      Sure, that’s reasonable and many people feel that way. I did, for many years! But consider this: If you’re doing something lucrative, there’s essentially no ceiling on your income, which is not something you can get from a traditional job. That’s pretty appealing.

      1. Nervous Accountant*

        Can I just add something–I remember you and I spoke about this over emails in the past.

        Starting a business is NOT an alternative if you can’t find a job. I got this advice endlessly, to start my own business, and….I didn’t want to (doing what? God knows what since I wasn’t an EA at the time). Worse, I was made to feel like a lazy or stupid person for preferring to have a job than be SE.

        I think you just have to have that drive and desire to be on your own……if you don’t have that, then chances ofr success are slim I guess. I love working and what comes with it…..self employment isn’t a never, but I’m content with what I have right now.

          1. Nervous Accountant*

            Exactly! and I don’t mean to imply that that’s what you meant but I just wanted to add that. In my experience, I felt pressure and guilt, and it was a relief to know that I shouldn’t feel that way.

        1. anon for this post*

          I’ve always worked a traditional 8-5 job, and for the first 7 years of our marriage, my husband was self-employed. He loved his work, his customers and his schedule, but the money was never great – just enough to get by. When we had kids, it quickly became clear that there was no way to quickly grow his business to make more money. He had to liquidate everything and get a regular 9-5 job. He had operated the company for 10 years at that point, and while he was knowledgeable, talented and hard-working, it was hard for him (in his late 30s) to basically start at the bottom in the new job…and of course, the economy didn’t help.

          Sad to say but he basically lost 10 years of potential career growth. He had to start all over again career-wise. Thankfully, he has a great attitude and work ethic, and doors are opening for him now….but at 40, he looks around and sees many 30-year-olds who are in roles of responsibility, and he’s not there yet (in this company, anyway).

          Other things we learned the hard way —
          Insurance can be a beast, especially on equipment and workman’s comp.
          Even with contracts, some customers can be difficult to satisfy.
          Some people have Rolls-Royce desires on a Pinto budget, and always feel you’re overcharging.
          Watch out for hidden time-suckers that you can’t bill for – like buying materials for a project, travel time, research, etc.
          Making money is great, but it is depressing to get a huge tax bill and know that after paying for expenses, you’re barely making much
          Taxes — coming and going. Take a van, for example. You’ll pay sales tax when you purchase it. You’ll need pay for vehicle registration/tag each year. You’ll have to claim it as company property on your company property taxes each year. And when you sell it, you’ll have to pay capital gains tax. It.Just.Never.Ends.

        2. Rana*

          Well, yes and no. Starting your own business is a ton of work and a lot more complicated and stressful than working for someone else often is. So it’s unkind to tell unemployed people that they can “just” start their own business if they can’t find work.

          BUT! If you’re genuinely someone who isn’t, for some reason, classically employable, self-employment can be a godsend. Like, um, me. My resume, honestly, is crap. I can understand why an employer wouldn’t want to take a gamble on me. But my clients – and the companies who feed them to me – are perfectly willing to work with me, because their stakes are much lower, and then I can prove myself on the job, instead of trying to sell myself on paper.

    2. Chinook*

      Laura, don’t feel bad about not wanting to be self-employed. Given the option, I would much prefer to work for an employer than be a contractor for the reasons you mentioned (and have told my boss as much). It truly isn’t for everyone and there are some real risks. The world needs both type of worker bees.

  19. I miss freelancing!*

    Very timely. I was a freelancer for 4 years (writing/editing) with very fluctuating income but never worked that hard to build a bigger client base because my husband’s salary covered our basics and we didn’t have kids yet. Then his job fell apart and I found full-time work, told myself it would be for a couple years. Nine years later… I want to get out but don’t know how! Would love advice from people who have built up clients while still working full time. I feel like this is a real chicken-and-egg question. I can’t leave full-time without clients, but I can’t take on lots of projects because I’m working (and have 2 kids). I also feel like people connected with my current job would offer me some referrals to freelance projects–but I can’t tell them I want to leave, because I work for them. Hmm. Sleep less, maybe?

    1. Just Write*

      Sleep less is about right :(

      I’m in the middle-ing stages of building up my freelance business – I have a fairly niche skill and am finding it’s much more in demand than I’d suspected, which is fantastic for me, and I’m looking at cutting my day job back to three or four days a week later this year. But at the moment, that effectively means: sleep less. Trying to build a business up to full-time sustainable while also working another full-time job means I barely have a social life and I’m often getting only four or five hours’ sleep for weeks at a time.

      The only way I get through it is because I have a plan, and an end date.

      But my freelance work is totally different to my day job, so I’m not in the chicken-and-egg situation that you are in, so I don’t know if that helps!

  20. rozin*

    For those that are self-employed, when did you decide to take the plunge and how did you know the time was right? I’m full-time employed by a company and have a side-gig that is starting to earn money, but I’m not sure when to make the plunge to doing the side-gig full time. Should I try doing part-time with the company first?

    1. Dynamic Beige*

      The rule of thumb that I’ve heard in the past is you should give up the day job when the night job is taking up the most of your time/earning you as much or more money. Also, preferably you have enough savings as well.

      Your company might be OK with you going part-time. Or they may not. In my industry, you’re either in or you’re out. Some companies make it a policy that they will not hire back employees who went freelance as freelancers (graphics).

    2. Maxwell Edison*

      I made the plunge to self-employment when I couldn’t stand being at ToxicJob any more (and they were in the process of ousting me anyway). I crunched the numbers and found out it was do-able with some belt tightening, as we can mostly live off my husband’s salary. I make much less money now but I do more work that I’m actually good at, don’t have to deal with BS office politics (though I do get the occasional drama llama client), and I was able to go off anxiety meds. Win-win!

      I would recommend saving up as much as you can for a financial cushion. I avoided taking any time off from ToxicJob so that I could cash out my PTO and sock that into savings while I got things ramped up.

    3. L N*

      When you’re crawling out of your skin at your day job because you know you’d be more productive working on your own thing, it might be time.

    4. Rana*

      I made the shift when Old Career was dying a slow death around me, and I realized that there were no entry level jobs in other careers that matched my skill set. I went full time when I was no longer able to find sustainable work at Old Career.

  21. Brett*

    My wife is a music teacher, both W-2 and self-employed. The first couple of years, her taxes took me days to prepare as I ran into the dozens of special rules for self-employed music teachers.

    I thought it was just me, but then reached out to some of her friends in the industry and they all said the same thing: not only were the tax rules ridiculously complicated, but you had to find a tax accountant who specialized in taxes for musicians and music teachers.

    As a “simple” example, one of my wife’s friends had a $1.5M instrument on loan from her school while she was a performer. She also owned a five-figure teaching instrument. When she switched to full-time teaching, they took back the loan instrument so she replaced her teaching instrument with a six-figure instrument she could use for teaching and occasionally performances (both paid and unpaid).

    That means considering special depreciation, bonus depreciation, section 179 deductions, taxable benefits of the instrument loan, 1031 exchange, capital gains (because her first teaching instrument went _up_ in value while she owned it). Not to mention that she had to pay for the new instrument with a loan too. (And that’s without even getting into the sales tax on a 6-figure instrument.)

    1. TL -*

      Ah, music – one of the few hobbies/professions that makes photography look cheap. :)

      I remember one of my college friends telling her parents she’d rather have a new instrument than a car for a graduation gift, since they were in the same price range. (And her parents had offered the car.)

      1. Beancounter in Texas*

        As a pianist, I have often compared cars to pianos. The cars I drive have three pedals too.

    2. Beancounter in Texas*

      Holy. Smokes.

      I’m glad I read this because 1) I could specialize in bookkeeping for musicians if I learn the rules correctly, because I’m already a musician too, so I know the jargon, and 2) I may not ever want to teach music lessons.

      As a CPA once told me, US tax laws aren’t based on logic, because accountants don’t write the laws. Legislators do.

  22. Kira*

    I’m recently out of work, and looking for something to fill in the gap while my family is considering moving out of state. I’d like to try freelancing projects; I have been looking around on freelancing websites where companies say “We need someone to do X, our budget is $Y” and then you come in and send them a message and a rate.

    So far, I’ve had not takers on my offers and I’m wondering if it’s my pitch. Any advice on what the message I send should look like?

    1. Kt*

      Stay away from those sites. They are a race to the bottom, with people happy to get $2 an hour.

      I cold pitch clients by looking up companies and emailing them, and at least 50% end up hiring me

      1. baseballfan*

        OMG yes. Most of them are virtual work and let’s just say an acceptable hourly rate in say Bangladesh is much less than here.

        I did get a few good freelance projects on eLance several months ago when I was unemployed and filling the gap with short term side gigs. Now that eLance has merged into Upwork, there is nothing.

        Kira, I don’t know your field, but I did have moderate success with tutoring via Wyzant. I’m a CPA and tutored some accounting students as well as a couple with basic needs in Quickbooks and one person who was studying for the CPA exam.

        1. Baker Street*

          Apparently Odesk and Elance are considered at the bottom with sites like Fivrr because people have complained they don’t get paid at all.

          I find that there are some communities online where you can join (usually for free) and that’s were people go to recruit based on what they need. I don’t see the point of throwing my money away when I’d rather invest in a profile, website, or just run my own online portfolio. I have had to join a portfolio site and also decided to build my own website.

      2. Rana*

        Agreed. Cold-pitching, followed by word of mouth by previous clients, has been my main source of project leads.

    2. Maxwell Edison*

      I get the occasional good-paying job from those sites, but a lot of the work you’ll see there is indeed a race to the bottom. I keep those sites in my back pocket when I’m between more reliable work.

    3. Cristina in England*

      Agree with everyone about this sites. Add in academic fraud as well. “Write a 3000 word paper for me that meets exact assignment requirements. No plagiarism!” Oh the irony.

  23. TowerofJoy*

    For those of you that made the leap, when did you decide you had enough freelance work or blogging income that you could go it alone? Was it numbers? A gut feeling? Also I was just thinking about how I wish you would do a post like this!! Thank you!!

    1. Kt*

      For me, it was when I earned more on the side, working 20 hours a week, then I did my full-time job.

      I kept at it until I had several months worth of expenses saved, then walked

    2. Rana*

      For me, as I noted above, it was basically when I realized that I didn’t have any better options. (I do not recommend this approach.)

  24. Lily*

    For professionals who started their own firm or agency — how did you figure out how much money to save up before taking the leap and quitting your salaried job?

    1. Occasional Consulting Archivist*

      Track your spending for a few months to figure out your average monthly expenses (what’s the minimum you need to be able to pay the bills?). If you’ve never done this before, it can be very eye-opening and empowering in many ways. Will your current freelancing income cover this? If not, are you willing to cut expenses?

      On top of that, most people will want some kind of cash cushion for emergencies, slow times, etc. How much that needs to be depends on if you have other safety nets (a spouse’s income, for example) and your risk tolerance. Someone upthread mentioned having 3 months of expenses saved up first. I’m pretty risk-averse, so I’d want a year of expenses before I cut the cord.

  25. Mimmy*

    I’m curious about the difference between the terms “self-employed”, “consultant” and “freelance”. Or are these terms interchangeable?

    1. Cristina in England*

      I know nothing about it firsthand, but I have associations. Self employed to me means selling things, consulting means telling people what to do, and freelance means something creative. I know this is probably complete nonsense but that’s my knee jerk response from hearing how other people use the terms.

    2. Ask a Manager* Post author

      Self-employed is basically that you’re working for yourself — you don’t have a boss. You run your own business, whether it’s selling products or a service.

      Freelance is a subset of self-employment. I don’t think it has one clear definition, but it’s usually used if you’re providing a service rather than selling items. It’s not usually used once you’re big enough to have other employees.

      Consultant — you give advice to other companies. You might do this via self-employment, or you might do it as a regular employee of a consulting firm.

  26. Nervous Accountant*


    99% of the clients I deal with at work are self employed, so I’m excited to read this!

  27. barndance*

    Anybody else have trouble with the health insurance marketplace and unpredictable income? I live in a state that didn’t expand Medicare, and I may or may not hit the income threshold that kicks you from Medicare into the marketplace. I’ve decided to go with marketplace insurance, but they need proof of income, which I don’t have as a new business. So I pretty much just reapply every few months, changing my estimated income slightly, to push back the proof of income deadline. Last year, there was no tax penalty for people who used the marketplace (and received subsidies accordingly) but should have been on Medicare based on final taxable income, but there’s no guarantee that will continue. Many calls to healthcare navigators etc have not turned up a better solution. Anybody else in this boat, and if so, what are you doing about it?

    1. Tris Prior*

      When I was self-employed, the marketplaces had just started. I was on spouse’s insurance through his job so I didn’t need to use the marketplace. But I did look into what it would cost should I need it in the future….. And had the same experience as you. NO ONE was equipped to help me figure out what I was eligible for because my income fluctuated wildly from month to month and was not predictable at all. I found this very confusing- I mean, wasn’t one of the main points of the marketplace to give coverage to self employed folks who might not have consistent income?! I was told to “just estimate,” which would have consequences if I estimated wrong. Frustrating!

    2. an anon*

      You’re thinking of Medicaid, not Medicare. Medicare is a federal program for people over 65 and certain disabled people. Medicaid is a state-level program for low-income children and adults (often, depending on the state, limited only to adults who have children).

      Unfortunately, your solution is pretty much the best for your situation. Marketplace plans are designed for people with low but somewhat steady income. If you estimate your earnings wrong, you may have to pay back some or all of your subsidy on your 2016 taxes. So the best thing to do is keep updating your info if your situation changes (estimated yearly income goes up or down, you move to a different zip code, etc).

  28. Manders*

    Bloggers or artists who make some money from ads on their site: which ad network do you use? How long did you spend building a following before you saw steady income from ads? How did you strike a balance between user experience and ad revenue? I’ve been kicking around the idea of monetizing my blog a year or two down the road, but I’m worried about cluttering up a site that’s all about the text.

      1. Manders*

        Enough to cover hosting with maybe $20 or so left over that I could put into promoting the project with social media or display ads. I could pay for it all out of pocket, but it would be neat if I could get to the point where my hobby is self-sustaining.

        Traffic is irregular: sometimes over 2000 visitors a day if I write something that spreads on social media, sometimes 10 or less from organic traffic. I definitely do not expect regular income from ad revenue before I put the legwork into building up an audience.

        Some people who do what I do use patreon or paypal to get donations from readers, some put up ads, some just seem to be using their sites as a way to build up an audience while they sell a product like books or art. I don’t think anyone in my niche expects to make anything close to a living wage from ads alone.

        1. Ask a Manager* Post author

          If you can sustain something close to that 2000/day, I bet you could make enough to cover hosting and other expenses!

          I went back and looked at my data for the first year I had ads, which was 2011. My traffic was a bit higher than yours, but maybe it will be helpful to get a general benchmark. In 2011, traffic was 2.1 million visits for the year (and 3.7 million pageviews, which is actually probably more relevant), and my ad revenue for the year was $5549. At the time, I was using ads through the BlogHer Network and Lijit. Of course, revenue will vary based on what ads you have, how many, placement, the network you use, etc.

          I’d start by putting up some relatively unobtrusive ads (like in a sidebar) and see how you feel about them.

          1. Ask a Manager* Post author

            Oh, and I’d recommend looking at The Blogger Network, which is who I use now. I know you all have witnessed the ad struggles I’ve gone through, but they’ve been really responsive (and the problems I’ve had aren’t likely to be something a smaller site will struggle with), and they’re pretty fantastic revenue-wise.

          2. Manders*

            Thank you! Wow, I get to see ad budgets from the perspective of the advertiser in my day job, but things look a lot different on the other side of the curtain. I’m definitely going to have to run some tests to figure out if giving the same space to, say, information about a patreon account would come out to about the same amount. My partner runs a podcast and makes a decent among of cash on the side from affiliate marketing and listener donations, but podcasts are a very different game.

  29. Cristina in England*

    This may sound strange, but I would love it if anyone wanted to share what they do as self employed people. I get that you can consult, do design work, write and edit, do accountancy and sell things, but I am curious about the wider range of jobs that can be done self employed. Any of you SEs feel like you’re outliers, or in a job that isn’t normally thought of as SE?

    1. L N*

      Yes, being an indie author is unusual. I have no clients (thank God) and even among authors – who are all self employed btw – I’m an outlier in that I primarily publish myself.

      It’s odd because a lot of the traditional advice and chatter doesn’t apply to me. It makes networking even more crucial. Recently I went to a conference where I was beyond thrilled to see a presentation on teapot advertising by the biggest teapot advertising expert – but even though the conference was for authors, he’d made minimal effort to tailor it to the audience. It was very focused on lead gen with potential clients/students funneling through increasingly higher levels of service – subscribe to the blog, sign up for the paid forum, sign up for the master class, sign up for individual coaching – I can see the value of this for lots of businesses, but especially because of the technical aspect, there’s very little indie authors can do with it.

      It can be pretty frustration at times, but the trade off of feeling like a trailblazer is pretty cool.

    2. Ashloo*

      I work in news monitoring as an IC. I have 1 client, work full-time (nights, tho, ugh!), and have a consistent paycheck. They may honestly be skating the line of 1099 vs W2 because it’s scheduled work. I would leave before rocking that boat, though.

    3. Z*

      My father owns a lawnmower repair shop (took the business over from his father). He still does that part-time, but he had to find actual employment because he didn’t pay attention to industry trends enough to change with them and can’t support himself and my mother on that business anymore (he should have started working on commercial mowers when people stopped mowing their own lawns and when lawnmowers became cheap enough to just replace instead of repairing – he fully acknowledges he goofed).

      I have a painter/wall paper hanging uncle (took that business over from his father).

      I have an uncle who builds custom cabinetry.

      I have a freelance lumber salesman/consultant uncle.

      I have a contract carpenter uncle.

      I have a retired uncle who now sells paintings (didn’t do too great on his own, so they hang in a gallery). Maybe that’s considered self-employed?

      My paternal great aunts and uncles created a greenhouse business that went out of business about a decade ago due to insane insurance rates (Thank, hail).

      My paternal grandfather owned and operated several gas stations before starting the lawnmower shop.

      I figure I’ll be self-employed at some point in time in my life, but have yet to figure out what I want to do.

    4. Chinook*

      I have been/am a high school tutor and office support staff.

      I also am working as a wholesaler of teddy bears for my local women’s group (meaning I sourced, designed and purchased wholesale 275 bears to sell at cost for my council and at a profit to other council with profits going back to my council). I have seriously considered going into this niche market of Catholic gifts and supplies because it is darn hard to find things like advent candles and Catholic specific items without going through the U.S.. I have connections through my mom with retail wholesalers and already have the business number set up and connections to groups to buy them in small quantities (but not enough to get them from the suppliers), so all that is stopping me is the thought of a spare room of religious articles.

      The added bonus is now I can legitimately say “I have a gal” when someone who needs to buy something like that. :)

    5. Just Write*

      I’m a calligrapher! It started as a thing I did for fun as a kid, became a hobby and a way to give nice cards to people as a teenager and young adult, became my escape from my day job’s stress (it’s very relaxing) as an adult, and then I hit thirty, started studying it for real, and five years later it’s my side job that’s very close to becoming my full-time job.

      It’s a bit magical. Being paid for something you love doing is the dream, and I’m living it.

    6. Meg*

      I have both sold items on eBay (either for family or close friends, and I get a share of the profits), and I have been “self-employed” as a project manager for a small company who only wanted to hire me as a consultant (I know, I know – that position probably qualified as an “employee” for other purposes, but I chose not to push it). The eBay work more keeps me busy than earns any significant income.

    7. Anon today*

      Transportation broker, which has morphed over the years.

      Also, we use an insurance broker for health insurance. He recently became SE. We have used him for years and have noticed no difference from pre SE to now.

    8. First Initial dot Last Name*

      I made costumes for dance companies, aerialists, burlesque, “feature performers” (strippers), drag performers, fire dancers, belly dancers, and other super athletic and or extra shiny dancers. I also made and sold some basic staple items, but found that making bulk and having an inventory was much less interesting than designing and making one-off costumes.

      As stated up stream I don’t do this anymore, but did for years and years and would go back to this work if I were situated in a community that supported my work. We moved for school… I don’t think there’s a sequin within a 100 miles of this place.

      I’m also an animator and I make commissioned short films for news outlets to illustrate feature stories, but it’s not regular enough to classify as self-employed. I’m actively looking for a traditional employment situation while we’re still in this area of the country. I honestly don’t think I have much of a shot LOL my previous career came with the benefit of looking however the heck I wanted, which is heavily tattooed.

    9. Z*

      Oh, and the commercial building my father owns is completely occupied by self-employed, small business owners, too: computer repair man/company, seamstress specializing in bridal/formal alterations, herbal remedies shop, and landscaper.

  30. Katie from Scotland*

    I handed in my notice 3 weeks ago and have another 3 weeks to go before I finish up. Then 6 weeks travelling over the summer and I will be going it on my own!
    I’m curious to hear if anyone has gone from being self employed without any staff into building up a bigger company that has technical specialists, assistants, sales, and all of the rest of it. Did you plan out your growth stages and give yourself targets? How did you know when you could afford to take people on and when you could be confident that you’d be able to make payroll every time? How did you decide which positions to hire first?
    I’m not by any means ‘there’ yet, but I like to know where I’m going to make sure I can get there!

    1. Rana*

      For me it’s a mixture of knowing my industry’s typical rates, what it takes for me to feel that doing the work is worth my trouble (so I often charge more for rush jobs), and what my expenses are. I have very low overhead, so it’s mostly what I can get away with charging while not pricing myself out of work.

    2. Chinook*

      That was easy – twice what I was making as an employee at an agency. I also made sure to run the numbers to ensure that I could make enough to earn a living after taxes and expenses.

  31. Maxwell Edison*

    I’m a freelance editor, and next month I’m going to be at San Diego Comic-Con, where I plan on attending any panels related to writing and self-publishing so I can network and hand out some business cards. My problem is that I’m not terribly good at face-to-face self-promotion; I don’t want to make any faux pas and come off as obnoxious. Anyone have some tips?

    1. Manders*

      Are you going to be a panelist, or just in the audience? You won’t have any trouble finding people to chat with if you’re a panelist. If you’re just attending as a member of the public, networking as a professional editor will be trickier, especially if you’re attending panels run by editors or writers who edit on the side.

      1. L N*

        I agree – when I’ve been approached by people at non networking focused events, it always feels forced and weird, and those cards don’t even come home with me. This could be me just not knowing how much SDCC has changed recently, but unless you are a panelist (and therefore someone with built in credibility) I’m not sure this is the place to network.

        1. Maxwell Edison*

          I won’t be a panelist, and you’re right, it may feel forced and weird. I’ll try to focus on quality vs. quantity and seeing if conversations flow organically into a “would you like one of my cards?” moment as opposed to a come-on-strong approach.

          1. Rana*

            This. You might also visit the book fair if you have one and see if any of the publishers might be interested – some keep lists of freelancers, to recommend to their authors.

    2. LL*

      Sorry for the extremely basic question, but how did you start getting into editing? I had an editing/proofreading job out of college without any specific editing training (just BA in English) – enjoyed the work a lot, but had to leave the toxic workplace. Are there classes/certificates that are useful?

      1. Rana*

        You might find the Editorial Freelancers’ Association helpful. There are a lot of entry paths into editing. And they’re a really helpful and friendly group.

      2. Maxwell Edison*

        I’d been an editor, albeit in the corporate communications/marketing/health care fields, for a long time. I started out book editing as a sideline, doing a project here and there to get my bearings and memorize Chicago Manual of Style (I’m only exaggerating slightly on that last bit). When I first was self-employed, I was lucky to get a gig with a book packaging client who saw me listed in Editorial Freelancers Association, which was a steep learning curve as I have to cite the reason for every change with Chicago and the dictionary. I don’t have any certification other than BA in English and a bachelor’s of journalism, other than just experience and learning-by-doing. It’s a business where word of mouth means a lot; almost anyone can say they are an editor, but if you do good work and have happy clients, that will help you quite a lot.

  32. NS*

    Hello Everyone,

    I work in compliance and after reading the posts, thought that it might be good to share some of my experiences. As we all know, the government is always looking for money. One of the many ways they are finding it is through worker classification. (Determining if someone is an independent contractor (sole prop./freelancer/consultant, etc.) or an employee of the recipient of services. In addition to the audits performed by the IRS, the Department of Labor sees itself as the ‘protector of the worker’. Meaning, even if you WANT to be an IC, the government has the right to determine that you are an employee of your client(s). Examples of this are the MicroSoft Case, FedEx, Uber… It’s a very long list that is getting longer.
    To protect yourself, please always ensure that you have multiple clients as this will show that you’re not economically dependent on one project/client, Obtain the necessary business licenses, d/b/a, state registrations for where you will be doing the work (esp. if you’re in CA or MA), obtain insurance (this shows an investment in your business) and make a concerted effort to differentiate yourself from other employee at your client.
    I am not a tax accountant, but I have been evaluating business relationships for industry leaders for over 13 years and thought I would share my two cents.

    1. LQ*

      Interesting, I don’t think of this as the government looking for money, but more as the government enforcing the laws and protecting workers based on the laws that already exist.

      This does remind me though that you should be very careful on your unemployment insurance as well (which as always varies from state to state) but in most states if you are self employed and are just yourself working for yourself, you may not need to pay any of the unemployment taxes. I know in some states audits routinely find that employers are OVER paying because numerically the number of businesses that are small businesses is larger than large businesses, and if they are paying and are just one person? Maybe they shouldn’t be. Talk to an accountant who is knowledgeable about unemployment, or check your state laws. You might be over paying and an audit will get you money back.

  33. Louise*

    I’m self-employed and I love it. I work in an industry where 80% of people are self-employed (translation & interpreting) and my city is an interpreting hub so I get plenty of time with “colleagues” and the extrovert in me loves that. Moreover, the freedom of not having a boss and not having to put in face time, which was a big problem for me in previous jobs, is glorious.

    It’s not all roses. I work long hours and dealing with new clients can be scary – it can feel very make-or-break. But there is no joy like the joy of a recommendation from a long-standing client and no joy like being called back after a first assignment because they like you and want to stick with you. It can feel precarious and it can be daunting, but I can see myself being happily self-employed for the foreseeable future. My dad is an entrepreneur, for the record, and he’s given me lots of advice and perhaps more importantly shown me through his own mindset and business practices how to deal with clients and do well.

    It’s not for everyone, but if you’re up for it, that’s the most important thing. And get a good accountant!

  34. eplawyer*

    Gah. Would love to participate, but it’s the day before my Lions’s Club big golf tournament and guess who is the deputy of the Golf COmmittee? Plus doing the day job. Because *downside alert* being self-employed means no one can make up for me being gone for the tournament and stuff still has to get done.

    *upside alert* on the other hand I can re-arrange my day to do what I have to for both the job and the tournament as needed without needing to check with 18 layers of bureaucracy.

  35. Wrench Turner*

    My wife and I have our art studios which she’s about to quit her day job and go full time for, but I’m not there yet so need another job to keep the lights on. I’ve a TON of facilities/maintenance and operations experience, so am in the “research & planning” phase of starting my own small property management company. I’m good with people, know what I can fix (just about everything) and know when to pass it off to a contractor (and how not to get taken to the cleaners).

    Only real question would be how folks handle ’24hr emergency service’ calls, going out of town, etc.

    1. just laura*

      I wonder if you could buddy up with a competitor to share the load when on vacation. It might be counterintuitive, seeing as you are competitors, but depending on your market it could work.

      1. Just Write*

        This is something that works for me. There are only a very few people working in my field in my city. We were all sort of aware of each other’s presence for a while without much acknowledgement – then I set up a chat group for us all and now we’re sharing tips and sending referrals every which way. It’s actually fantastic – community over competition, every time.

    2. Beancounter in Texas*

      Would you be managing your own property or for someone else? Would it be multifamily, commercial, industrial or single family homes? There are after-hours emergency hotlines that serve this particular niche, that answer your phone after hours and on weekends and handle emergency maintenance requests.

      As ‘just laura’ wrote, though working with a competitor may be better, particularly if they’re in the same business but different field. For example, you manage multifamily and they manage single-family homes and duplexes.

  36. oranges & lemons*

    I’m currently working as an editor for a small book publisher, and have been contemplating making a move into freelancing. Any freelance editors out there who can provide some advice about getting started?

    Part of my concern is that I haven’t been working in publishing for very long (about 3 years full-time, 2 years as a part-time freelancer, plus internships), and don’t have a publishing degree. I’m also wondering if it would be a good idea to try reaching out to set up the occasional freelance job while I’m still working full-time.

    1. L N*

      Not an editor, but as a potential client: If you’re a good editor, no indie author is going to care about your publishing experience or degrees. That’ll be a big client base for you as a freelance editor. We are mostly looking for those with quick turnarounds, that we jive well with, and aren’t already booked into next decade.

      1. Jo*

        Where do you go to look for good editors? Also, if you can elaborate at all on what makes an editor “good” in your opinion, I’d love to hear it!

    2. I miss freelancing!*

      Don’t get a publishing degree. Yes, do try to take on freelance work while you’re still working full-time. It doesn’t have to all be for publishers–think nonprofits, art galleries, small businesses that need their web copy reviewed, etc. Ask your friends. I worked in publishing for just a few years, during which time I started doing small editing jobs on the side (mostly for my husband’s employer). Then left to take a freelance writing gig that was sort of full-time but short-term, which turned into several more writing jobs for the same organization, which enabled me to become a subject-matter expert in that particular area. Also I started getting editing work from my old employer, and got referrals to a few more. A few years later, I had to get a regular job again, and got one at a nonprofit org focusing on the same area that my original freelance work was in. I’m still there and now looking to get back into freelancing, so it all comes full circle. I do wish I had been able to keep doing more freelance while working full time, but 2 kids and a long commute make that hard. Anyway, good luck!

    3. Rana*

      Look up the EFA (Editorial Freelancers Association). TONS of info and support there.

      Do try taking on projects while working (many of my editing jobs are tiny things – as in needing only a few hours to complete – but they all add up, experience-wise), and, based on what I’ve seen, experience counts for a lot more than formal credentials in this industry.

  37. themmases*

    This is probably so nosy, but what do people with just a side job do with the extra money? Or what do people in general do with the “extra” from busy months?

    I am a grad student and I do freelance editing and scientific reviewing, so I like to treat my fee as windfall money that I throw at my student loans. (My goal is to graduate owing only the principal I borrowed, or less.) I got married last month and this work wasn’t really factored into what I owe to our household expenses because some months I don’t do it at all. I’d like to keep just paying my loans with it but I don’t consider it mine to just keep without a discussion.

    Obviously I’ll just ask my partner what he thinks is fair, but I’m curious what others do with the extra from a fluctuating income, especially if someone else is affected.

    1. Manders*

      My partner has an irregular but slowly growing stream of income from a side gig. He treats it as grocery money, and I don’t factor it into calculations about household income. We do split most expenses 50/50 and we don’t have debts to pay down at the moment, so that does change the discussion.

      Whoever “owns” your side income, paying off student loans is a great way to spend it, and I doubt your partner’s going to disagree with that.

    2. Occasional Consulting Archivist*

      I’ve paid off some debt, and bought a car with cash instead of getting a loan. Now I just save most of it.

    3. Rana*

      I generally direct my income into work-related expenses and one-off things (like new clothes for our child or a treat for myself) and paying off my credit-card debt. My husband’s income goes for the things that come up every month, like groceries and utilities.

    4. Stan*

      I started out saving all my gig money to build up a cushion for emergencies and other big expenses. I bought a car after totaling one in an accident, put in a new fence when the wind took it away, and took advantage of a once-in-a-lifetime opportunity to perform in Europe. I maintain that cushion all the time, so when I had to buy a car, the next several months went to building that account back up. When I have the emergency account where it needs to be, I pay down my student loans. The principal payments have made such a big difference in what I owe! I’m going to pay off my loans (and my mortgage) years sooner that I would have without the gig money.

    5. Just Write*

      After covering expenses (which aren’t many any more, my studio is fairly well set up now) I throw it at debt – although I use a little of it to pay the extra rent that comes with renting a flat with room for a studio. ;) I found I absolutely could not run my business from a sharehouse, so I consider the extra rent for my own place part of the cost of doing busines.

    6. Cas*

      Since I don’t have any debt, my side money (varies from about 4000-8000/yr) goes 10% charity, 40% entertainment budget (like plays and things that are a luxury) and the rest to savings

  38. Ask a Manager* Post author

    Here’s something I struggle with, and I’d love to hear from other people who do too: How do you decide when enough is enough, work-wise?

    When you work for yourself and take on clients, you could theoretically take on enough work to fill every hour of your day, and increase your earnings accordingly. I’m happy enough with my income that I turn down a lot of work … but I’m also still working more hours than I’d ideally like to. The obvious answer is to do less work. I’d still be happy with my earnings if I did that. But that feels like a risky move, because things could change — I could lose a big client or two in, say, a year and then maybe I’d be regretting turning down work earlier. So I feel like I maintain a stable of work that’s slightly larger than what I want or need, just as a guard against losing some of it in the future.

    The next answer is probably to stash away money as a buffer for if that happens. I’ve done that, and I still worry about it.

    I guess the question is, is it possible to get to point where you don’t worry about this if you work for yourself? And if so, how do you get there? Does it take 10 years of sustained high revenue to feel okay about cutting back? Is it when you’ve fully funded your retirement account? Something else?

    1. L N*

      From watching other people: nah. I’m under no delusions that I’ll ever really slow down unless something forces my hand. (I haven’t published much of anything in a year because of illness that really neurologically tanked my ability to be creative, and that’s about the only thing that could slow me down.) I’ve known a lot of people who declare an intention to retire, or to move their focus off one lucrative aspect of the business to another slightly more lucrative one, but ultimately they can’t do it. It always seems to feel like leaving money on the table.

      I have a friend who is going into a semi retirement for maternity, and she always says she doesn’t plan on coming back full time – but she admits there is a VERY good chance she won’t be able to just dip her toe in. I’m interested to see what happens a few years down the road.

    2. LQ*

      I have a relative who is a full time freelancer and she struggles with this. The thing she focuses on is, if everything went to hell how long would it take her to find a job. I am sure she’d find new clients before that point, but it is the marker that makes her go, oh yeah, I like the flexibility. She’s cut way back on the number of hours for her primary client and travels a lot (for fun – not work).

      She’s probably 100% disconnected 2 months a year.

    3. Occasional Consulting Archivist*

      My friend who is a pretty successful freelancer/consultant seems to struggle with this. She feels like she can’t ever turn down work because who knows when the next job will come along? One thing she has done is raise her rates a lot (like 50% or more) in the last couple years to maximize her $/hour (and deter clients who aren’t as serious).

      It seems like there comes a point where you have so much work that you have to decide if you want to keep working crazy hours, or if you want to hire some of it out, possibly to other freelancers. But I understand that for a lot of self-employed people, getting back into delegation and teams and management is not the direction they want to go.

      1. Dynamic Beige*

        And the other way to handle it is to only accept projects that interest you or for people you like to work with.

        You’re in the power seat if you don’t need the work. When I say need, I mean that you have your bills paid, savings etc. You can pick and choose clients and be more exclusive. This seems counter-intuitive but supposedly from people who have managed to do it, the more exclusive you are, the higher fees you can charge. Google The Positioning Manual for more.

    4. KT*

      When I feel maxed out and like I’m working too many hours, I just raise my rates. Some clients drop out, but most will stick with me. Then I have less work, but I keep the same income!

  39. nodumbunny*

    Any freelancers that have taken the step of incorporating and drawing a salary, rather than operating as a sole proprietor? Beyond having someone else handle the legal work, what do I need to know? Pitfalls?

    Background – this go around I’ve been a freelancer for about four years. I’ve had multi-year stints a couple times before in my career (I’m more than 25 yrs into my career). I’ve always been a sole proprietor, filing a joint return with my spouse (and have always had an accountant do our taxes). Now our financial advisor is saying I should incorporate and draw a salary to reduce the tax burden. Any advice from those who have BTDT? Thanks

    1. nodumbunny*

      P.S. Alison, I can’t read the site on my phone today without getting a pop-up that hijacks me to another site. I reported it, I hope, through your “report a problem” page.

      1. Ask a Manager* Post author

        If you left an email address, I’ll respond to you that way. (Trying to funnel it all through the form, rather than doing it in the comments.)

    2. Noah*

      S-corp can save you money on self-employment taxes. You pay yourself a reasonable salary and then take the remainder out as a dividend. By doing this you can avoid paying self-employment taxes on some of your earnings.

      Let’s say you earn $100k per year in profit. Under the sole proprietorship model, that entire amount is subject to the 15% self-employment tax. Under the S-Corp model you could pay yourself a $60k per year salary and then distribute the rest as dividends. Only the $60k would be subject to the employment taxes. You would save about $6k per year in this example.

      There are only two real downsides I know of. First, you are reducing the amount you pay into Social Security and therefore may reduce the amount you can receive in the future. Second, more paperwork involved in keeping up with a corporation and it varies considerably by state.

      I have an LLC that is treated like an S-Corp for tax purposes. The IRS doesn’t have a ton of guidance on what is a reasonable salary. Every year I print off ranges from a few websites and make sure I fall somewhere in that range, than I keep that documentation with my tax documents. I want to be able to prove to the IRS that my salary is reasonable if I am ever audited.

  40. Yachie*

    Besides writing, are there any other jobs that lend themselves to freelancing? I would love to pursue this but I’m a data analyst and I’m not sure there are many opportunities to do this as a freelancer as most companies have in-house data analysts.

    1. Jo*

      My brother-in-law works in this field and has told me (when I was considering a career change) that there absolutely is room for freelancers and consultants. I’m afraid I don’t know a lot of specifics, since I didn’t go that route, but I’ve heard a lot of the same conditions apply as for any freelancer: you can potentially make a lot of money but it may not always be reliable, you have to hustle for clients, etc. And that it helps to have a portfolio of work to show around. Since you probably can’t share information you’ve worked with at your employer, you would need to use fake/play data, or something that’s available to the public.

    2. Research Assistant*

      I have done a (very small) amount of freelance data analysis, mostly for family or friends of friends, but that’s mostly because I’m severely underemployed at my “main” job. All of my freelance work has come through word of mouth. I’d be interested in doing more freelancing in the future, but at this point I’m more focused on finding a better day job.

    3. Cristina in England*

      I have gotten a couple of freelance data jobs through Upwork (formerly O-Desk and E-Lance, merged). If you’re a statistical/quantitative person then you might find something there.

    4. Rana*

      Writing and editing are part of the suite of services I offer, but the one that brings in the most money and reliable work flow is indexing. I specialize in scholarly back-of-book indexes, but there is a wide range of possibilities (some indexers work with journal indexes, for example, while others do e-books, and some specialize in things like medicine and law). I also offer formatting services and research services. Basically what I do I call “scholarly support services” – my main clients are academics and grad students – because I can leverage my years of academia to distinguish me from my competitors who lack that experience.

      So data analysis may well be able to pivot into related fields.

    5. Slippy*

      Cybersecurity also has a fair amount of 1099 workers. This is especially true if you are doing penetration testing (trying to break in) or secure code review. Penetration testing tends to lend itself to discreet assignments so you do one then move on to another company. If you are good at secure code review you can charge through the nose for it so most places can’t afford to have you on staff for long.

  41. Z*

    My father was a self-employed small-business owner for most of my life. (He didn’t get a “real” job until his 50th birthday.) I have four uncles who are self-employed. Both of my grandfathers were self-employed. A whole cadre of great-aunts and –uncles were self-employed. Something I’ve noticed and heard them talk about?

    You’re. Always. On.

    While there might be days you aren’t at the office or shop or whatever, there is never a time when you can say, Nope, sorry, won’t talk about work right now, because that’s alienating potential customers.

    You get asked a question about work at the grocery store, you answer it. You get asked a work question after church, you answer it. You get asked a work question at your weekly softball game, you answer it.

    Now, I’ve never heard any of them complain about it, but there is something to be said about putting your 40 and going home.

    1. Sybil Fawlty*

      So so true! And additionally, you have to join all these other clubs, etc to network and keep working. So then there is an entirely new group (or groups!) of people who also expect you to be always on!

      So you run the Youth Group or the Golf Tournament or the Pancake Breakfast and you are into another set of responsibilities. Your social time is now also work time.

      1. Z*

        I’m thinking this is industry specific. My father owns a lawnmower shop. He went to Toro and Snapper conventions back in the day, but he never had to join any club.

        I don’t think my carpenter uncle of wallpaper hanger uncle joined clubs either.

        Maybe that’s more “white collar” than “blue collar”.

    2. twenty points for the copier*

      Oh, man, this is so true. It might be exacerbated by the fact that I LOVE talking about the subject area I work in, but my spouse gets pretty exhausted with it sometimes.

    3. KSF*

      You really have to have the temperament for it, since you have to wear a lot of different hats when you run your own business – sales, production, accounting, etc. And work/life balance can definitely be a struggle. My husband is self-employed in a creative capacity and he never knows when a job will come up. He’s had to travel over the holidays, work nights and weekends, work really long hours for days on end with no break, and has had to cancel plans and vacations because a job has come up (which frequently occurs with little or no notice). He hates to turn down work because you never know when you might hit a dry spell, plus you don’t want a client to go to the competition and perhaps not come back to you. He loves what he does, and I’ve adjusted to his schedule over the years, but it definitely caused some strain in our relationship early on, when he was getting established. And most self-employed people don’t go into business because they love the business/paperwork side of things, so that can be a challenge.

    4. Anon today*

      Ugh, hit the nail on the head. Our biggest customers went to 6 and 7 day (from the traditional 5day) schedules about 4 years ago. Since that time we can only count on having off the big holidays. All other times we have to be ready to work every day of the week. It’s exhausting. Our only vacations are long weekends, Christmas, Memorial and Thanksgiving. But we eat well…

    5. Beancounter in Texas*

      My father is a cotton ginner (owner/operator) and he says he’s never worked a day in his life. When asked when he’s going to retire, he jokes he can’t retire since he’s never actually worked. And the answer is no, he does not foresee stopping what he’s doing.

      Admittedly, when I helped him a couple of seasons, it didn’t feel like work. Yes, I worked from 8:30am to about midnight seven days a week. Shortly after midnight one night, my brother solicited my help to find a cotton module that he couldn’t find, so I pulled on some rubber boots and tromped around in the mud with a flashlight until we found the 2 ton pressed loaf of cotton. I got to bed about 2am that morning. But it was fun.

  42. Teapot Project Coordinator*

    Does anyone own an online retail business?
    I’ve been looking into starting one(with hopes of one day being able to make enough profits to justify creating and selling my personal designs – think like those cutesy/funny sayings on coffee mugs, that sort of thing)
    But of course, I’m worried of starting from scratch and the risks involved, although online doesn’t have anywhere near the overhead costs of brick & mortar, which helps ease my mind a bit.
    I have experience running small business and I’ve been in project management for years, so I know I can run the business – I just worry that no one will buy from me, so I’d love to hear from anyone who has gone before me!

    1. Cristina in England*

      Have you thought about just starting with your own designs through Etsy? They have rules about making sure that there is an element of the self made in what is sold, but if it is your design you might be ok.

      1. Rana*

        Using a platform like Etsy or Redbubble isn’t a bad way to get your toe in the water. I’d caution against Etsy specifically, however. They tend to encourage you to promote Etsy rather than your own business, and my experience is that they view buyers as their clients, not sellers, so the service you get as a seller is not great. Other, more seller-oriented sites may be better if you’re planning to do this more intensively later.

  43. Doctor Russe*

    Anyone here run your own medical practice? A friend of mine is still, for now, but is hanging on for dear life as huge networks buy up hospitals and practices all around.

    Are any of you in the same boat, or in some other industry thar is rapidly consolidating and pushing out small players? What were some of your strategies to stay afloat?

    1. Phil*

      When you’re a small firm in an industry that’s consolidating it’s hard to survive unless you can differentiate yourself from the big players. Most pharmacies now are chains but the few independent ones try to offer something extra (some do deliveries and most emphasize individualized advice from the pharmacist).

      This can be tough to do with a medical practice because of the way health insurance works. One thing that seems to be becoming more common is for small practices to go to a concierge model where patients must pay an annual fee (normally covers a physical, etc.). You cut your patients this way but spend more one on one time with them. I don’t know how successful people typically are with this, but it might be worth researching.

  44. Sybil Fawlty*

    Hooray! I am so thrilled to see this!!! I run one business with my husband (hence my user name) and another business on my own. Can’t wait to read all the comments!

  45. Occasional Consulting Archivist*

    This is off the wall, but is anyone else kind of freaked out by the much-touted “working in your pajamas” thing? Most people must love that idea, as much as it comes up. For me that would be part of a recipe for depression and serious social withdrawal. I don’t even like wearing my pajamas when I’m out sick!

    1. Noah*

      I feel like I wouldn’t be ready for the day at all. I have to wake up, take a shower, get dressed, eat breakfast, and prepare myself for the day. Even on my WFH days I have no desire to lounge around in my pjs.

      I generally will wear sweatpants and a tshirt or something similar when I’m sick, but that’s still after a shower in the morning.

    2. Sybil Fawlty*

      I never do that! I have a schedule I follow daily, I use a checklist on a clipboard. I make sure the daily tasks get done, and usually in order, even though they may be interrupted or done at a different time each day.

      I only stay in my pjs if I’m sick, I couldn’t work that way either.

    3. Stan*

      I worked 100% remotely for a few years and did the work in your pajamas thing for about a week. I found it really hard to get myself focused and moving at the start of the work day in my pjs. I also had a hard time turning off at the end of the day. I found I was a more effective remote worker when I followed a work day routine minus a commute. My clothes were definitely more casual than I would have worn in the same job in person, but getting up and putting on work clothes every day was necessary for me to get my job done.

    4. Just Write*

      Hah! Same!

      I love the idea, but when it comes to reality … just can’t do it. If I’m not dressed properly, I don’t feel ready to work, and I’ll spend all my time noodling around and playing with art supplies instead of focusing on the work that needs to get done.

      That said, ‘properly’ for work isn’t necessarily going-out-of-the-house ready – it just means I need to be wearing shoes and a bra. Yoga pants are OK. Pyjama pants are not.

      I have a genuine business need to be pretty comfortable (my side job involves long hours sitting still and writing – literally – I’m a calligrapher. It doesn’t sound physically intensive until you try to remember the last time you wrote an essay longhand, and then factor in that I mostly use muscle movement, not hand movement, and have the paper at a precise angle and slant, and often am staring into a lightbox!). But there’s a fine line between “comfortable enough to work for eight hours, even including stretching-and-movement breaks” and “comfortable enough to sleep at the desk” …

      1. Rana*

        Yeah, work ergonomics are something they don’t really warn you about when you’re thinking of self-employment. But your body is your living, even in fields that aren’t thought of being very physical, so it’s good to take care of it.

        (And can I say that your work sounds really cool? – I have friends who dabble, so I can only guess just how much care and precision must be needed to succeed at it professionally.)

        1. Just Write*

          Thank you! Yeah, it is definitely the kind of job that the description “attention to detail” was made for. Luckily I’m very nerdy about punctuation and detail, and have steady hands. ;) I love it though – I still don’t quite believe that it seems to be a feasible full-time job, but all indications are pointing that way!

        2. Beancounter in Texas*

          I’m learning this as I take a break from being a full time employee to looking for remote work and school options. Holy smokes I need a good desk chair. I’m finding myself working at the dining table more with my laptop or cafes with free WiFi, but I think my next pay is going to be an investment towards work comfort.

      2. Beancounter in Texas*

        Ditto. I find that if I don’t dress to the shoes (and in my case, be ready to put on shoes to go), I find I don’t want to make the effort to do much else. If I dress ready to walk out the door and be presentable to a client, then my mind orients towards working too.

    5. Nodumbunny*

      I don’t work for long in my pajamas (sometimes I might put in a couple of hours before I get dressed), but mostly I like the idea that I *could* if I wanted to.

  46. Client hasn't paid*

    I have my own question here, happily employed but was approached by someone to do work for them personally.

    We had a good working relationship, until I failed to answer a call, and he suddenly went cold. He said he’d be taking care of everything himself. Fair enough. I tried to reach out to make amends but he ignored all my attempts.

    Problem now is….$$. He was my only “client” so to speak, so I really didn’t put any engagement letter or contract together. I even said “pay me what you think is fair” which I guess was a dumbass move.

    I don’t think I have any recourse here. I haven’t even approached him about payment but I’m more bummed that a good working relationship went sour. I don’t plan on going into business or anything but, it’s been over a month now and I really would like payment. I don’t know if I deserve it though.

    1. Noah*

      I’m assuming you sent an invoice, right? If not I would start there, and maybe it will at least prompt a phone call and a negotiation on what is fair for the work you completed.

      1. Client hasn't paid*

        sadly, no no invoice. Is it too late to send it now? It’s been about 6 weeks since contact. I did try to reach out a few times but no luck.

    2. Liz L*

      “Pay me what you think is fair” might be what’s screwing you over. What if client thinks fair means nothing?

      How much work did you actually complete and how much do you think you should be paid? You can propose a fee and see if he’s open to negotiating at least and giving you some form of payment. I would research what a person in your position usually charges, so that you feel more confident about the numbers before approaching client with it. At worst you won’t get paid and relationship ends — same as now if you never ask. And possibly, client was waiting for an invoice or number so that they could pay you! (Make sure to instruct how to pay as well: e-transfers, PayPal, check, etc.)

    3. Dynamic Beige*

      I really would like payment. I don’t know if I deserve it though.

      Is he using your work? Your ideas? Anything that you did via his direction? Then you deserve payment.

      If missing one phone call is going to make this guy flip tables and vanish, he’s done you a favour. Some clients are unreasonable and expect you to be there 24/7/365. I was just having a conversation with someone the other day about how he fired a client because he doesn’t work after Xpm (doesn’t read or answer e-mail, or pick up the phone) and he was waking up to 34 e-mails every morning as this client was getting an idea at 2am and sending it. Insanity.

      Invoice him what you think is appropriate, hourly rate x hours worked. If he doesn’t pay you have the option of letting it go, taking him to small claims court or writing it off as bad debt (which an accountant would be better at helping you decide). If it makes you feel better, this kind of thing happens to a lot of people who freelance, you never know if a new client is going to be a decent one who will play by the rules of the game or just be looking to rip people off. You really have to get good at enforcing boundaries and dealing with situations where there is conflict in a reasonable, adult manner.

    4. Sybil Fawlty*

      Don’t feel bad, I learned this lesson the hard way too. The story is too embarrassing for me to tell. If you can manage to get by without the money, I’d take it as a lesson learned and move on. I’m sorry though, I know it sucks.

    5. CM*

      Yes, you deserve it, because you did work for him! Even though you didn’t have a contract, there’s a legal concept called “quantum meruit” which means you need to be paid for the fair market value of your work. I agree with the other advice here, send an itemized invoice, and if he continues to ignore it after you follow up, consider small claims court (or regular court if it’s a large amount).

    6. Rana*

      Ugh, I’m sorry. Everyone here has offered good advice.

      I’d also like to add that you should work on getting yourself out of the mindset that you’re doing your clients favors by working for them, and they’re doing you favors by paying you. You absolutely deserve to be paid for your work, and you deserve to be paid a fair and appropriate wage for that work. Please stop underselling yourself in your own mind; it bleeds over into client relationships and you really don’t want to get in that habit if you’re going to do this as anything other than a hobby.

  47. Chaordic One*

    In working for myself, I found the actual work to be great, and I guess I was lucky that I didn’t have problems collecting payment from my clients.

    The downer was all the time I spend looking for work, marketing myself, advertising myself, getting myself out there. I probably spent more time doing that than actually providing the service I did. As in introvert it doesn’t come easy to me.

  48. Regina 2*

    Any marketing consultants/freelancers out there? It seems everyone wants a graphic designer for freelance, but what if you’re in something as specific email marketing and have zero design experience? Fairly decent HTML/CSS, but really only to troubleshoot; I’m not a coder. It seems like my skills are only ever needed for big companies that have sophisticated automation programs (which I do have experience in). I know this work is in and of itself a niche, and that’s helpful in starting out on your own, but to do anything in that realm, I would need multiple partners to get going (i.e. graphics, marketing strategy). Additionally, I’ve only ever been client-side — is there any hope to break out without an agency background?

    Would love to hear from marketing consultants what their background is, and what type of experience you think is necessary to have before breaking out on your own.

  49. RDC*

    I’m curious about how folks bill. My husband is a consultant and only takes clients on retainer since he didn’t want to track hours – so he has a contract for monthly retainer and promises them appx X hours a month (but in practice he usually ends up working much more). Is it common for consultants to work on retainer rather than hourly?

    On the other hand, I were ever to go SE, I imagine it would be more “freelance” type work, like writing or editing. Do you bill hourly? By the job/task? Something else?

    1. Rana*

      I do it by project, by page, and by hour, depending on the nature of the project and the needs of the client.

  50. KatieLA*

    Just wanted to bring this slightly-OT issue up for people who are thinking about working 1099 or becoming self-employed.

    I worked W2 the first half of last year and then 1099 the second half, continuing through to the present day. I went to apply for a mortgage, and since I filed a Schedule C and am self-employed now, they basically didn’t know what to do with me. They treated last year’s W2 income like it didn’t exist since I wasn’t working there anymore. I work in entertainment so it’s not uncommon to work a mixture of both W2 and 1099 throughout any given year, and you’d think a mortgage lender could look at the global picture of how much I average per year and figure something out. Especially since I’m not a starving artist, but someone who currently has a contract to continue working through at least next summer at almost six figures. But nope! Now that I’m self-employed, they wanted two years of tax returns with a Schedule C before they would consider lending to me. It was a huge bummer! And every deduction that helps you on your taxes counts against you when considering income for a mortgage. Like, your home purchasing power will be reduced by every business lunch you took and work tool you bought that you legitimately wrote off.

    So tl;dr — if you want to buy a house in six months, don’t become a contractor or become your own boss, because lenders can be pretty short-sighted and will make you jump through hoops.

  51. Product Person*

    Regarding taxes:

    I’m speaking as a U.S. citizen who had to report income from a full time job + LLC business. I found it extremely simple to file taxes on my own.

    Like AAM, after a few years doing it myself, I tried one year having an accountant do my taxes, and it didn’t save me anything — not even time, since I had to provide the documentation I’d use to file myself and that is what takes most of the time. I also use TaxAct, and frankly, I don’t see any reason for even someone with a job + LLC to need an accountant. Initially you don’t even need to worry about estimated payments; just keep track of your expenses, and answer the questions at tax time, and you’re done.

    Oh, by the way, when I finally hired the accountant, he gave me slips to do the quarterly estimated payments; I forgot, and at the end of the year, had to pay $25 more in taxes as a fine, which was totally worth it considering the time it saved me. What helped is that I adjusted the withholding from both mine and my husband’s regular paycheck (we file jointly), which means I was paying most of the estimated payments through our regular paychecks.

    But really, even considering the estimated payments, IT’S RIDICULOUSLY EASY to file taxes and make the payments online. And a simple spreadsheet can take care of monitoring expenses with very little extra work. Choose a software like TaxAct (which for people living in a state with no state income tax is free), and just follow the prompts to get everything done without complication. The only thing that took me some time to figure out was which expenses I could report and which not, but there are plenty of good blogs where you can read the rules pretty quickly.

    1. Product Person*

      Hmm. I’m sorry, KatieLA, this is not supposed to be a reply to your post, but rather its own comment.

      1. Product Person*

        Well, weird. Initially my post appeared as a reply to KatieLA’s comment, which I hadn’t even read when I posted. But now it’s back to being a standalone. Heh.

    2. Ask a Manager* Post author

      I’m so glad to hear someone else say this. Everyone else tends to say the opposite and leaves me wondering if I’m missing some massive thing that I should be accounting for. But this is exactly my experience too.

      1. Product Person*

        Right, and let me tell you, there were years when I received freelancer income from one state and was employed in another, both with state tax, and even with all the complications of filing federal + 2 states, filling via TaxAct was quite easy.

        I’m wondering if the people who need bookkeeper / accountant have trouble keeping their expenses organized, and just throw receipts in a box to give to the accountant. I’d never do that because 1) I like to see where the money is going and 2) I don’t want to be charged extra for the accountant to sort things out. Anyone who can be disciplined enough to add expenses to a spreadsheet should not have a problem filing their taxes on their own.

  52. Product Person*

    Best podcast ever for people considering freelancing (the host interview experts in everything from how to set prices to how to charge for corporate training, writing, design work, etc., and how much time to set aside for managing your business as opposed to just doing freelance work):


  53. Carolina*

    I’m late to the party, but hoping for advice. Basically, I’ve found out that the main company I freelance for has done some sneaky business. I offer two rates, one for digital copy (per hour basis, as often there’s a lot of other work happening that can’t be covered on a per word basis) and one for print, which is per word. Per word does end up costing more, usually. I was commissioned to write a digital piece, and the manager who commissioned me then moved on. So, I contacted her manager to follow up (the one who approved all my rates, and approves all the pieces). She confirmed that yes, they still wanted the particular piece, and they still wanted it for digital. I wrote the piece, charged accordingly, and considered it paid and done when it was.
    Anyway, we’re now about two months later, and I’ve been going through the mag copies I get sent to request portfolio PDFs. Imagine my surprise when I see that the digital article is now a fully-blown magazine piece, running as a large feature, without credit attached. I’m friends with the former manager, so I contacted her to double check I had all my facts right from her end, double checked emails and invoices, and can see that they did indeed use the digital piece in the magazine, against our agreements, which resulted in a $300 loss for me for the one piece. It’s the only time it’s happened, but not the only time they’ve miscredited (and the former manager had a look on the website and has seen pieces written in the past, by me and by others, being re-uploaded with new names attached as they aren’t creating new content; she’d know, as she used to be in charge of uploading them herself).
    I don’t really know what to do – I worry I’m not in the position to drop this client, as they’re a place I formerly worked for before switching to freelance; I had enough work that I hadn’t started looking for more clients. What do you guys suggest?
    Company itself: it’s small, family-run and the current manager is the boss’s daughter – and protected by the boss regardless of everything. (Case in point, the manager one time locked a staff member in a room and spent hours screaming at her, trying to get her to admit to looking for another job. The girl was fired by the boss.) Up until this point, I’ve largely had good experiences with these guys, so I’m a bit shocked. Others… no, not so much.

    1. Ask a Manager* Post author

      Contact them and approach it as if it’s an accidental oversight that of course they’ll want to correct, and send a corrected invoice! Also, remind them of your agreement and ask if there’s anything you need to do differently on your end to ensure it’s adhered to in the future.

    2. Rana*

      I would definitely firm up your contract language and licensing requirements after this, even if you keep working with this client (you can frame it as “to avoid similar confusion in the future”). (You might see how photographers handle it, for example – there’s a lot of similar issues in that field.) I would also start aggressively looking for additional clients to add to your roster; you don’t want to be dependent on one that’s not reliable, even if they’re a big one (or especially if they’re a big one). Unfortunately, the legal language surrounding work-for-hire has not yet caught up with the distinction between digital and print licenses; as far as the IRS is concerned, if you get paid for a specific project, copyright transfers automatically once you’ve been paid. So you have to set up your own protections if you don’t want that happening. I’m sorry that you’re dealing with this.

    3. Jack the treacle eater*

      Small family run companies are notorious for playing fast and loose with peoples’ rights, though often it’s not cynically but because they don’t think, don’t have time, don’t understand or don’t have people that cover that sort of thing. I have to say, I’d take incidents like locking a staff member in the toilet as an indication of their generally unprofessional attitude and treat them accordingly.

      There seem to be several lessons here. It seems to me – and bear in mind this is only the thoughts of some joe off the internet, though one who’s looked extensively into copyright issues – that there are rights issues here. One thing to consider is when you do this work, are you including the rights with the copy, or do you retain rights? Is this all made clear when you take the order / sign the contract?

      Using in print what they paid for in digital might just be a one off mistake, and if you’re reliant on the work it’s probably not the right thing to get too excited about it. Repeatedly re-using your and others’ previous work with incorrect attribution is more of an issue and shows a cavalier attitude, if not a breach of copyright law.

      If you can’t afford or don’t want to to lose them I’d go with Alison’s advice, but if you are already asserting your rights you should consider pointing this out to them; if you’re not asserting your rights you should do so from now on and make sure, quietly and in a conciliatory manner, that they understand what that means. If they want rights you should perhaps consider a different scale of charges that reflects the fact they will be able to re-use your work without paying again, or that allows you to charge repeat fees, or whatever.

      The other issue is “…I had enough work that I hadn’t started looking for more clients…” You can’t afford, as a self employed person, to put all your eggs in one basket. If you are dependent on one customer for more than 50% of your business you must diversify, otherwise you’re in a position of weakness when something like this happens or when they feel like doing the dirty on you. Make it a priority to find other customers.

      1. Jack the treacle eater*

        As I’ve cross-posted with Rana I’m going to add a comment about copyright. My jurisdiction is not the US so I may be wrong about US copyright law. From what I’ve read I’m not sure that what you do counts as work for hire as you are not an employee and aren’t agreeing that the work should be a work for hire – if so, you retain copyright. You should check these points with someone who knows as it will be relevant to all your work, not just this one case.

    4. Carolina*

      Y’all are fab, thank you!

      Everything else you’ve all said makes 100% sense, but I’m appearing back to comment regarding the eggs in one basket. I wasn’t intending to actually work anywhere for a while – I was unwell, my family was unwell, so we all bundled together for the better part of a year. Just so happened that these guys needed stuff done and that the amount they were offering was enough work to keep me from going financially insane without overwhelming my health. At the time, I wasn’t really intending to work as a freelancer, so diversifying wasn’t really on my list of things to do. It kind of just worked out as, “Yep, this will keep me slightly busy, keep me doing what I love, and keep a gap off my resume… oh, and the added bonus of a bit of cash.”

      Downside: now that I’m actually functioning like I used to, this isn’t great – I do miss the financial security of full-time work. Upside: I’m actually looking at relocating to get full-time work again, and can say toodle pip to them when I do find new work. I’ve also currently got part-time work elsewhere, in an entirely different field (worked out well, actually, and I really enjoy it). In addition, since writing the initial comment I’ve been able to find a few more small clients. This should tide me over until I get a new gig.

      Rights-wise, according to the contract that we signed upon starting this, I am the one who retains all copyright. (I went back to confirm this on my end because I’m in the process of updating my digital portfolio and don’t want to deal with the fallout if they get outraged; fortunately, they can’t.) I’m in Australia if that changes anything you all know about the copy laws? However, they did agree to the initial contract and the terms of use, and the rates. (They had asked if I could drop my rates at one point, which are industry average, and I declined; again, wasn’t fussed either way with having work, as such, as I was recovering. I approached it with a ‘they can take it or leave it’ attitude.) I work as my own sole-trader business (operating as a sole trader with my ABN, and all the jazz that comes with that). So, not employed by them – they’re basically buying a print story from me, or a digital story. The contract reflects that. Hope that makes sense!

    5. MonsterMaker*

      You, the person who created the content, actually owns the rights as there was no payment or contract in place stating that you handed over your intellectual property to the customer. You are actually right to dispute and should be demanding you get credit for work you have done. If you aren’t credited then why are you working for these monsters? Who is benefiting from your work when a different name is on it? The person whose name is one YOUR work and the company that screwed you over.

      I would also recommend leaving that company and expanding your client base. They appear to have a history of abusing your work ethic and denying you credit where it is due and you need to absolve yourself of any legal issues they will no doubt have with other people in the future. I would also make sure that you keep heavy documentation of all emails, calls, text messages, digital/copy work, and physical letters for proof that you have not only worked on projects, but that they have a history of underpaying you.

      I went to a lawyer and basically had a client come in by appointment to confront them as a last straw because they threatened me and claimed they owed me nothing – despite even signing a contract. They promptly paid then and there when they saw a huge mountain of correspondence physically printed out and realized, due to copyright laws that they were breaking the laws without a doubt and would lose in court. I would like to point out that if you do this then you have burned a bridge permanently, but in my case it was warranted. I would also recommend being diplomatic and not recommend that company to anyone as well, since it would be a disservice to put another person in your position with such unprofessional people.

      I wish you the best of luck, but make sure you have a contract in place and a minimum deposit. I have a link below to the USPTO and found it very helpful to consult before contacting a lawyer.


  54. MonsterMaker*

    I’m trying to find yet another full time job and am writing my own business plan as well. On top of this I’ll probably have to go back to college since the work I want to expand into requires a degree along with certifications and experience.

    I have experience doing a wide array of design (from tattoos, shooting digital video, visual and practical effects, to 3D designs for production) but have learned to have a contract ready to go and don’t do any work until the client understands what you can or can’t do, deadlines, and a minimum deposit. Depending upon your area of specialty I have to deal with copyright law, trademarks, legal liabilities, and wage/flat rate disputes so researching common issues in your market will be the most beneficial.

    The number of people seeking free “spec” work has plummeted and I don’t work with non-profits, not-for-profits, or any non-tax paying entities. They consistently expected quality free work and I have to explain that I’m not a charity and do not work like one since I actually pay taxes. The frustration of working with people who have no concept of what you do can drive you nuts and will make your work life miserable, so do your best to educate people on what it is that you do. If they think they can do a better job then ask to see their portfolio site or demo reel. I’ve gotten several blank looks because they do know anything at all.

    You’d be surprised how many people get upset that I want to be paid and yet when I ask them if they want to be treated the way they treat me they behave as though I shot them. The irony of demand for free work – but no supply – was strong where I lived so I moved my work market to a large metropolitan area where people understand that content creation is NOT free, cheap, or easy to do. Move to where your work will be appreciated and build a good solid reputation for getting your work done.

    When I had a few people complain about not offering to “volunteer” in that crappy town I used to live in – I just told them the move made business sense to me and that’s it. If you’re working on your own the only people you owe anything to are the ones you have a contract with. There is no point working in an area where there is no market and if you find you’re having a lot of problems moving your business (especially online) can help you quite a bit more than just redoubling your efforts in an area where there is no market for your work.

    If you work in a creative field (even just art) don’t let people tell you that you should work for free or that you “need a real job”. There are a lot of different ways to set your rates, educate the public, and make a living (eventually) doing what you love. I hope this helps anyone interested in a creative field.

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